TMZ is reporting that Mitt Romney, at the trial in the divorce case of Staples founder Tom Stemberg in the 1990s, testified under oath that Stemberg was a “dreamer” and the Staples stock “was worth virtually nothing.” Bain was an early investor in Staples. As a result of this and other testimony, Stemberg’s wife Maureen received comparatively little in the divorce proceedings. Just weeks after the ink was dry on the divorce decree, Stemberg…and Romney…went to Goldman Sachs and cashed in their Staples stocks for millions.
The piece says Maureen Stemberg Sullivan had multiple bouts of cancer and MS, but Tom Stemberg (who was at the time a health policy adviser to Romney) cancelled her health insurance. She lost her house and lived in relative poverty. Tom Stemberg, accusing Maureen of abuse, won custody of their son. Then, according to the TMZ report, “sent the boy a letter saying, although he loved him, because of issues related to the divorce ‘it will not be possible for you to be a part of our family for the foreseeable future.'”
The report says the Globe and Gloria Allred went to court this morning to unseal the divorce trial transcripts, and the case has been continued until Thursday. Boston.com is carrying a story on this right now, and it has been picked up by some other media outlets like AP.
If this is true, it’s really despicable. Stay tuned.
UPDATE: David S. Bernstein tweets from court in Canton that the transcript will be released to the Globe. Gloria Allred was arguing for a lifting of the gag order in the case and seems not to have prevailed on that (Tom Stemberg and Globe attorneys opposed). Allred has a copy of the transcript already, as lawyer for the wife, and is asking the court if she can release it publicly. The judge says yes, Allred can give it to other media, but Maureen (Stemberg) Sullivan can’t speak about the case publicly.
I imagine of more pressing concern to Romney this morning is the Richard Mourdock fallout and the news that Colin Powell has endorsed Obama, both on foreign policy and economic policy. He says he has the utmost respect for Romney but hits him on the tax plan not adding up, his foreign policy shifts, etc. He also makes a strong case that things are improving though Obama inherited a disaster from Powell’s last boss. He says neither campaign asked for his endorsement directly, but I don’t think the Obama campaign could have asked for a better video from Colin Powell.
Powell also praises the auto bailout and Obamacare and said Obama will be better on employment and immigration, and blames Congress for the failure to make progress. He rejects the idea of needing a “grand bargain” or Simpson-Bowles, imploring Congress to do their job. It’s so good I’m even willing to give Powell a pass when he mentions that Obama got “us out of one war, is getting us out of another war, and hasn’t gotten us into any new wars.” Et tu, Colin?
UPDATE 2 (10/26):
The Globe has its story out on this. It seems Romney testified in 1991 that, looking retroactively, the Staples stock held by Maureen Stemberg was worth about $1.75 a share. He said his opinion in the early days (Staples first opened in Brighton in 1986) was that the employees were “surly” and checkout times slow. Bain invested early at 80 cents a share, for $650,000. They invested again in the second and third waves in 1987, at stock prices over $2 a share, for a total of $2.5 million. Romney testified in 1991, after the shares had risen dramatically, that Bain thought $2.10 and $2.90 was too high at the time: “We were obviously proved wrong, ultimately, but the price we thought was high at that stage, given the company’s performance.” The story says Bain delayed before nonetheless deciding to invest on a smaller scale. (If the next two purchases quadrupled the initial investment, I don’t see how that’s on a smaller scale, but whatever.)
In February 1988 Maureen Stemberg sold a large number of shares for $2.25 each, then in April 1988 sold more for $2.48. In April 1989, Staples had an IPO at $19 per share and the shares went to over $22 on the first day of trading. Romney and Tom Stemberg did very well. Maureen Stemberg had sold slightly more than half of her shares at the much lower rate and lost out on about $5 million in profit she’d have made by holding those shares another year. For the most part, it seems she just made the wrong decision in selling the shares in 1988. Tom Stemberg apparently stated publicly, in 1997, the she’d be one of “richest women in Boston” if she’d held on to the shares until 1989. Maureen Stemberg seems to be saying she relied on the premise the shares were only worth $2 or so, but she wasn’t relying on Romney’s testimony, which came 3 years later.
What is fishy to me is that Romney himself created these lower-value “Class D” shares specifically as “a favor” to Tom Stemberg to pay Maureen off in the divorce: Romney acknowledged at the time that there were no other cases in which a separate class of securities was created for the benefit of one individual. He also said that as an investor through Bain, he had never seen that kind of a device used before.
Also fishy is Romney testifying, in 1991, after the shares sold for over $22, that looking at things retroactively Maureen Stemberg’s shares had been worth only about $1.75 each in 1988, so she got a good deal selling them for $2.25 and $2.49. Part of his reasoning was that her shares offered less protection than other classes of shares in case the company went belly-up. Obviously, in 1988 that could well be a consideration for a potential buyer. But in 1991, when Romney testified to this, it was clear that the company had not gone belly-up but rather had done spectacularly well in 1989.
All in all, it seems like this is hardly a bombshell. There seems to be no proof he knew, in 1988, the stock would soar soon after. If he did know, he had no obligation to tell Maureen Stemberg about it so she wouldn’t see her shares too early. But it is mighty convenient that the guy gets to testify in 1991 that in 1987 he thought $2.10 and $2.90 was too much, but he bought it anyway. He can say in 1991, money in pocket, that he thought Staples was worth virtually nothing in 1987-88 and likely to fail. He can say that of course he had no idea he and Tom Stemberg would make a huge profit (Bain made $13 on a $2.5 million investment in less than 3 years) just a year after the period in which $2.48 was “a good price” for Maureen Stemberg. It’s possible but for me, at least, just a little too convenient after the fact.
This will play too well into the anti-woman meme. Give it a few days, and the debate won’t matter. This story is going to kill him.
I think the proverbial nail in the coffin is a rare bird nowadays, at least on the national level.
I honestly think that if Romney dropped the N-bomb on our President during a live debate, it wouldn’t cost him more than a couple of percentage points in polls, that’s how dissonant I believe the anti-Obama faction of this country to be.
There’s a 50-50 chance we won’t even be talking about this next week. I hope I am wrong and this does cost Rmoney a great deal politically, though.
is all we need to beat him at this juncture.
The polls pare so volatile it seems to me that a couple of percentage points could be made up via the next scandal/gaffe du jour.
I really think revelations from this case need to be a.) explosive and b.) crystal clear and easy-to-understand evidence of wrong doing to move the needle against Romney. The spin machine will explain this away in one or two news cycles, I would be willing to bet.
It seems pretty clear to me.
He lies under oath about the value of a company owned by his rich friend. As a result the rich friend’s wife gets little in the divorce. Right after that the rich friend and Mitt Romney cash in that company’s stock for a lot more than he told the court it was worth.
It ties into all the key anti-Romney memes:
–Serial liar to the point of felony
–Screws over women
–Sketchy business practices with sketchy businessmen via Bain Capital
–Callous about human beings in general
Right now there are some small number of swing state women who don’t know whom they’re voting for. They’re worried about the economy and disappointed in the recovery, but wary of Romney. This — and Mr. Mourdock’s position against abortion even in case of rape — could tip enough of them away from the GOP.
Do you think that anti-Obama/tea party/GOP 47% of this country – who have already have compartmentalized or are in denial about sooooo much of what is incontrovertible fact about Romney, Obama, and the actions of the GOP during the last 12 years – are going to accept anything that comes out of this case as evidence that Romeny lied under oath? You really think the Hanity/Limbaugh/Rove set won’t find some way to totally dismiss the “lie under oath” charge and have that part of the country lap it up?
Based only on my own cynacism towards the critical thinking skills of the voting public at large and my observations of so many failed “nails in the coffin”, I don’t see how anything less than a perjury conviction (which we will not get in the next two weeks) would change many Romney voters mind. Even then I have my doubts.
I don’t.
But the hardcore anti-Obama people are not a majority. I’m talking about the still-undecided people or the recent Romney leaners who were just as open to Obama until a couple of weeks ago. If just some of them decide Romney’s not for them, that should be enough to win this time around.
get lost in the “information” stew. But this particular scandal is a lot like Newt’s moral travails and, though it wasn’t obvious in polls that it hurt the Newtster, may well show up at the ballot box.
I would rather have a busload of faith to get by.
If it really happened that way, why wasn’t someone screaming blue murder to re-open the divorce judgment? Even if you might be unsuccessful, you try. If someone had made any kind of a stink at all, then this would have been caught by now by the media or by another campaign.
So this seems like something that wasn’t so big a deal at the time, so I would not be surprised if this turns out to be the opening of Al Capone’s safe.
But if it turns out that Mitt may have actually committed perjury, it will be hilarious to listen to all those folks who claimed that such acts are the worst crime of all and an attack on the legal system itself during the Clinton years now decide that it’s no big deal.
Republican goes to war without national security interest or Congressional consent its ‘leadership’, when a Democrat does it ‘treason’
Republican has a sex scandal ‘privacy for his family’, Democrat ‘impeachment to defend our values’
Republican tells his mistress to have an abortion it was to ‘protect his wife’ a Democrat ‘kill his baby’
Republicans in the majority recognize the filibuster is abused, in the minority defend it as sacred *to be fair reverse this for Democrats*
etc. etc.
all we heard was “filibuster abuse.” The voters will punish this perversion of majority rule.
And the Dems fell for it, and signed on to a “compromise” where the Republicans agreed not to abolish the filibuster, and the Democrats agreed not to use it. And that’s why we have John Roberts and Sam Alito.
Fast-forward and the Republicans will filibuster anything and everything in sight and their “punishment” in 2010 was taking over the House and gaining 7 Senate seats. The American public, perhaps, should be paying attention to filibuster abuse. But it’s not.
may not be nothing. But, I wouldn’t rule out there still being things out there about Romney that haven’t come out. The media is lazy and Romney’s repub opponents had unusually weak campaigns…only Perry and Pawlenty ever had what would be considered even average campaign structures for presidential level- and neither for very long. Mitts USA Today op-ed urging Obama to use the individual mandate, didn’t even come out until the primary was basically over. And that was in a major paper just three years ago…not in the divorce files of one of Mitt’s hundreds of business partners 20 years ago.
it makes Obama’s side look desperate. Not something to be cheerleading.
If his testimony helped cheat a divorcing women it will anger all women who have been divorced — if it’s framed that way.
Obama and the Dems have nothing to do with it and I doubt many people will put it on them.
the Dan Rather memogate fiasco of 2004, regardless of who’s behind it. This is dangerous territory for Democrats to be in.
The problem there was CBS’s failure to authenticate the documents. Whether or not they were actually forgeries is not what made the story a problem. Simply put, if CBS had actually done the proper steps to authenticate them, they would have quickly discovered them to be a forgery, if they were in fact a forgery.
It was a not a “there’s no there, there” problem as seems most likely here. Democrats won’t take a hit because somebody tries to “Trump” Romney. I don’t think there is going to be any question of the transcripts authenticity.
and the transcripts are sealed, how did TMZ report what Romney testified? The likely explanation is that some source “remembered” how things were, but is exaggerating wildly.
This is going to fizzle, and the more media attention it garners, the more spectatcular the fizzle will be.
Maureen Sullivan, as a party to the divorce, has the transcripts. Her team didn’t have to go on faulty memory from 15-20 years ago. Anyway, at this point this story isn’t big nationwide at all. Hardly a mention on even major liberal blogs. Only Globe and D.S. Bernstein seem to be on it. It may not amount to much, but I don’t think it will fizzle spectacularly.
Allred told media she’s had no contact with Dem party.
Why does the Globe need a court order for relase? They can just report what a “source” (wink-wink) told them.
I can’t remember a recent major news story that didn’t require wholesale revision and rewriting of the first 48 to 72 hours of coverage. The truth of the Benghazi attacks, for example, turned out to have almost NO relation to the initial reporting. Without exception, from the Benghazi attack to the compounding pharmacy story, the earthquake/nuclear meltdown in Japan, the Sal DiMasi turnover that wasn’t, any random shooting… Oh, look, EBIII claims more indictments coming down on top of those that didn’t come down already… Whatever… No fact presented in the first 47 and a half hours of coverage stands up after 72 hours. Scott Brown is staking his career on this accelerated info mangling : he has great hopes that the initial flurry and fury of allegations tying EW to ‘corporations’ and ‘insurance companies’ will carry him past scrutiny. And it’s not recent either… Whitewater stands out as paradigmatic…
Personally, I think many so called ‘journalists’ would have difficulty successfully picking their own nose if given an hour of training, written instructions and a detailed map to do so and therefore, under the pressured and sweeping overwhelm of ‘breaking news’ it cannot become other than a tsunami of fail. Of course, by the time the revisions kick in they are on to the next adrenal twister and so who cares? And who knows, under those circumstances, if they even get the revisions correct?
All this is to say, as much as I might be all to willing too believe this story about Mitt Romney, it has that ring of truthiness, the tellers of the tale have a dismal record to date. More’s the pity, if the allegations are true, the dismal state of journalism leaves many people, right, left and center, all to justified in a casual dismissal.
Looks like another triumph of journalism for the Boston Globe.
The court allowed the transcripts to be made public, but declined to lift the gag order on Maureen Sullivan — the boston.com report says that Ms. Sullivan must bring a separate motion to amend the gag order. I wonder if any of our attorneys can speculate about the likelihood of that happening before the election.
It certainly appears that the Globe is working very hard to stay on the good side of Mitt Romney and Scott Brown — journalism be damned.
how the Globe had standing to modify the agreement anyway. It wasn’t their agreement. I think they withdrew that because they realized it had zero chance of success.
If there is anything to this at all, it is in a transcript anyway. What is she going to say about it now? That Romney is a big meanie?
in the public interest as a matter of First Amendment concern. They withdrew it, from what I can tell, because the Stemberg lawyers said they wouldn’t contest release of the transcript if the Globe dropped it. That indicates Stemberg didn’t think it had “zero chance of success.”
Anyway, Maureen can move to amend herself, and/or some other media outlet can file a motion. Allred says she can provide “context.” What that is, who knows?
Two pribate parties agreed to a confidentiality agreement. If she had 1st Amendment rights, she may have thus waived them. But whatever her rights are, they are not the Globe’s to enforce.
If the Globe is that interested in such matters, perhaps it can also seek a court order reducing the interest rate on my mortgage loan.
I think the release of the transcript has a different standard, that was much easier to reach. So, it sure looks like the Stamburg lawyers agreed to waive their losing objections in return for the Globe waiving its losing motion. Not exactly an unreasonable result.
As centralmassdad predicted, it appears to me that there’s virtually no substance to this whole kerfuffle. I’m basing these comments on today’s Boston Globe piece about the matter.
There was a bitter and contentious divorce. Maureen Sullivan Stemberg got 500,000 shares of Staples stock and the family home. She sold some of that stock (a total of 255,000 shares) before the company went public, in order to pay off the mortgage on the family home. She gained a total of $592,150 on the sale of the stock, and presumably walked away owning real estate worth more than that. The company went public a year later, and Ms. Sullivan Stemberg’s remaining Staples portfolio was still worth $5.5M. I would not characterize 255,000 of 500,000 as a “vast majority” — it looks to me more like a business decision that she, in hindsight, regrets.
In one of the few occasions that Mr. Romney spoke the unvarnished truth, he described the early days of Staples as “a place with “surly” employees and slow checkout times”. I don’t know how many of us remember that time, but I do and I’d say that was an accurate description.
I get that Ms. Sullivan Stemberg is unhappy about selling her stock when she did. Too bad — that’s how the startup game is played. She chose to shift her portfolio away from Staples and into real estate. That was her decision, and I suspect it looked pretty good at the time.
I see no indication from this testimony that Mr. Romney said or did anything improper, and the only thing I see is an envious ex-spouse who wishes she had $10M instead of “only” $5.5M.
number of shares. Thought she had 250K shares, not 500K.
Anyway, agree there’s no there there. But they always say there’s no way they could have known in 1988 it would be ten times more valuable in early 1989. I’m not sure I buy it entirely but so be it.