Tuesday, May 08, 2012

Another Mitt Romney Lie : "I started Staples, for gosh sakes."

Romney Lies: He Did Not Start Staples

by Dave9000         Sun May 06, 2012

When running for governor, senator, and president, Romney has endlessly repeated the same claim with differing nuances. Sometimes it's "I helped start Staples" while other times it is "I started Staples" or even "I started Staples, for gosh sakes." On occasion it's the more modest "When I was at Bain, we helped start Staples."

The reality is that Romney didn't start Staples at all. He thought Staples was a bad idea. He even tried to prevent Bain from investing in the company.

Here's the truth:

Two men named Leo Kahn and Thomas Stemberg started Staples.

As they grew their business, Stemberg approached Bessemer Venture Partners, a competitor of Romney's Bain. Stemberg wanted to borrow money from Bessemer to open more Staples stores. Bessemer then approached Bain about joining in the venture to spread the risk.

But Romney didn't like the idea at all. He thought Staples was a bad investment and turned Bessemer down. Not once, not twice, but three times.

Only after other people at Bain pushed did Romney reluctantly reconsider. He still expressed strong opposition to the deal, but would not stand in the way of providing some backing. The proposed investment in Staples was tiny compared to other Bain deals.

Bain then made a modest $650,000 investment in Staples. Because he headed Bain, Romney was offered a seat on the Staples board. While on the board, Romney had no direct involvement in the company nor any management control. He simply showed up at a board meeting every few months. He was absent from meetings more times than he was present.

Bain made additional modest investments in Staples, for a total of $2.5 million. As soon as the company went public, Romney dumped Bain's share and was out of the investment.

When Bain got rid of its stake, Staples was still a small chain, with only 24 stores in New England and barely a thousand part-time jobs. It was nowhere near the mega-giant it would become. With time, Staples grew to more than 2,200 stores with 89,000 employees.

All of that growth occured long after Romney had left Bain and long after he had any connection whatsoever with the company.

A company Romney thought was a bad investment. Which he demonstrated by pulling out as quickly as he could.

What's troubling most about this is how the lie "Romney started Staples" is endlessly repeated by his supporters and even some of his opponents.

Romney no more started Staples than he started Apple or Microsoft. He made a small investment in the company, pulled out early and that's it. His investment was barely anything more than buying stock in the company.

Romney's claim that he started Staples is no more valid than an investor who bought Apple stock in 1990 claiming, "I started Apple."

To learn more about Romney's real record, read The Real Romney, by Michael Kranish and Scott Helman, the primary source for the information in this piece.


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