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Untimely disclosure

Money | Will Bain Capital's links to Stericycle hurt Mitt Romney with pro-life voters?

Issue: "Dead heat," Sept. 22, 2012

Some facts are not in dispute. Among them: Stericycle is a $1.2 billion company that performs a vital service. It is the largest medical waste disposal company in the country. Among its customers are some of the nation's top healthcare providers. But it has other, less reputable clients, including Planned Parenthood, the largest abortion provider in the country.

Also not in dispute: Bain Capital, a company founded by GOP presidential nominee Mitt Romney, was a significant investor in the company. According to a Securities and Exchange Commission (SEC) filing in November 1999, a group that included Bain invested $75 million in Stericycle. This investment gave Bain 23 percent ownership of the company's stock, making it the largest shareholder. In 2001, the investment group sold 40 percent of its stake in Stericycle for about $88 million. Bain and its partners sold the rest of its holdings in 2004, with total profits exceeding $45 million.

But questions remain. Was Governor Romney involved in Bain at the time of the transactions? If he was, did he know about Stericycle's involvement in the abortion industry?

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The Romney campaign says the answer to the first question is no. Romney says he left the day-to-day management of Boston-based Bain in February 1999 - about nine months before Bain filed SEC documents in the Stericycle transaction - to take the helm of the 2002 Salt Lake City Olympic effort.

However, that SEC filing lists Romney as "sole shareholder, Chairman, Chief Executive Officer and President" of Bain Capital and at least three Bain-related entities investing in Stericycle. The document also says Romney has "voting and dispositive power" of the more than 2 million Stericycle shares "in his capacity as sole shareholder" of Bain and its affiliates.

A news report and a state document also indicate that Romney remained involved at Bain. The Boston Herald reported in 1999, "Romney said he will stay on as a part-timer with Bain, providing input on investment and key personnel decisions." Massachusetts state disclosure forms in 2001 and 2002 list Romney as Bain's 100 percent owner. A 2007 Washington Post article quoted Bain lawyer R. Bradford Malt saying Romney took a "leave of absence" from Bain but retained ownership for two more years.

But what about the second question: Did Romney know about Stericycle's involvement in the abortion industry? Liberal Mother Jones reported that in 1991 the Occupational Safety and Health Administration cited Stericycle's Arkansas operation for safety violations. Among the violations: keeping "body parts, fetuses, and dead experimental animals in unmarked storage containers."

Bain's interest in Stericycle came eight years later, and it should have discovered the abortion involvement during due-diligence research. If it did, and if Romney did participate in the decision to invest in Stericycle, he might still have favored the investment: Steven Ertelt, editor of the leading pro-life news website LifeNews.com, acknowledges that Romney was then "pro-choice," but notes that Romney has since "converted to the pro-life position on abortion."

Most pro-life organizations have remained silent on the past Bain-Stericycle tie. Some, such as the pro-life Susan B. Anthony List, actively support Romney. (Repeated calls to a number of pro-life organizations, Stericycle, and the Romney campaign all went unreturned.) Michael Marcavage, spokesman for an ad hoc group, the Campaign to Stop Stericycle, says pro-life groups are silent because "they're afraid of another four years of Obama's radically pro-abortion ideology." But Ertelt of LifeNews.com sees efforts of the Campaign and other groups as attempts to "sow seeds of doubt and distrust."

Warren Cole Smith
Warren Cole Smith

Warren, who lives in Charlotte, N.C., is vice president of WORLD News Group and the host of the radio program Listening In. Follow Warren on Twitter @WarrenColeSmith.

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