PoliGraph: Obama ad claim leaves out some details

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With Mitt Romney now certain to be the Republican presidential nominee, President Barack Obama’s reelection campaign has started filling battleground state airwaves with negative ads about the former Massachusetts governor.

Here’s one claim from Obama for America’s latest called “Swiss Bank Account” that criticizes Romney’s corporate background:

“As a corporate CEO, he shipped American jobs to places like Mexico and China. As Governor, he outsourced state jobs to a call center in India.”

There’s some truth to these claims, but the Obama campaign also leaves out some details.

The Evidence

The first part of this ad’s claim refers to Romney’s role co-founding Bain Capital, a private equity firm.

During Romney’s time at Bain, some of Bain’s ventures were successful; Romney frequently points to jobs created at Staples and Sports Authority as examples.

Other ventures folded, went bankrupt or experienced significant layoffs to become more profitable.

Holson Burnes Group is an example of a company that ended up shedding workers, according to the Associated Press, which wrote about the firm late last year. After Bain merged two recently purchased companies to form Holson Burnes, a photo album and picture frame company, it opened a factory in South Carolina.

The factory was operating at a loss, so it was shuttered after only a few years, and the operation was moved to New Hampshire. Just a few months later, workers there were laid-off, too. In 1992, Holson Burnes was making 75 percent of its photo frames overseas, the Associated Press reported. According to Securities and Exchange Commission forms, those jobs went to China, among other Asian countries.

The Obama campaign also points to Modus Media, a company Bain had a 39 percent stake in. In June 2000, the company said it would cut 200 jobs in the U.S., and open a plant in Mexico.

But that was after Romney left Bain in Feburary 1999 to run the Winter Olympics in Salt Lake City (though Romney has continued to reap some of Bain’s profits).

The ad also states that while Romney was governor of Massachusetts, he outsourced state jobs to India.

It’s true that under Romney’s tenure, the state had a contract with Citigroup to administer its food stamp program, according to reporting by the Boston Globe. Citigroup’s operation included a call center in India. At the time, many states were outsourcing jobs to save taxpayer dollars.

Despite an earlier effort to make sure jobs stayed in Massachusetts, Romney vetoed in 2004 an amendment to the state budget that would have prevented firms doing business from outsourcing jobs, though the Democratic controlled legislature didn’t try to override the veto, either.

When the food stamp contract came up for renewal, the state signed with a different contractor that housed its call center in Utah, according to the Boston Herald.

The Verdict

Issuing a verdict on this claim was tough.

With Bain involved, some companies laid off workers, as Holson Burnes did. But that’s the nature of the business Bain is in, and the ad fails to mention that, in some cases, the firm helped to create jobs.

It’s also true that some jobs ended up in other countries – again, Holson Burnes is an example. In Modus Media’s case, however, Romney had already left Bain.

Finally, it’s true that during his time as governor, Romney’s administration hired a firm that outsourced jobs to India. The ad leaves out that his administration eventually brought them back to the country, but not the state.

So there is truth in some of the claims, but the ad leaves out significant details. Because the Obama ad doesn’t tell the whole truth, this claim leans toward misleading.


Obama for America, “Swiss Bank Account,” May 1, 2012

The Washington Post, The Two Faces of Mitt Romney and Bain Capital, by Suzy Khimm, Jan. 10, 2012

The Charlotte Observer, As Romney’s firm profited in South Carolina, jobs disappeared, December 19, 2011

Reuters, Special report: Romney’s steel skeleton in the Bain closet, By Andy Sullivan and Greg Roumeliotis, Jan 6, 2012

The Wall Street Journal, Romney at Bain: Big Gains, Some Busts, by Mark Maremont, January 9, 2012

The Miami Herald, In Miami, story of profits and layoffs highlights debate over Mitt Romney’s tenure at Bain, by Marc Caputo and Alex Leary, January 18, 2012

The Washington Post Fact Checker, Mitt Romney and 100,000 jobs: an untenable figure, by Glenn Kessler, Jan. 10, 2012

FactCheck.org, Facts Strained in ‘King of Bain’, January 15, 2012

The Los Angeles Time, Modus Media to Close Plant, Cut 200 Jobs, June 2, 2000

The Daily Deal, Modus Media Withdraws IPO, by Kelly Holman, August 15, 2000

The New York Times, Buyout Profits Keep Flowing to Romney, By Nicholas Confessore, Christopher Drew, and Julie Creswell, December 18, 2011

The Boston Herald, Ted K Slams Mitt for outsourcing jobs; Mass work farmed out to India, Utah, by Kevin Rothstein, Feb. 23, 2006

The Boston Globe, Measure Seeks to Ban State Outsourcing, by Christopher Rowland, June 18, 2004

The Boston Globe, New Obama campaign ad attacks Mitt Romney for outsourcing American jobs, by Callum Borchers, May 1, 2012

GovTech.com, Massachusetts Governor Works to Prevent Outsourcing of Jobs, March 5, 2004

USA Today, States try to keep jobs in the USA, By Julie Schmit, August 31, 2004

The Washington Post, Factchecker, Romney and ‘outsourcing’: Biden’s out-of-context fact, by Glenn Kessler, March 29, 2012

The Boston Globe, Romney vetoes $108.5 million in budget, By Scott S. Greenberger and Raphael Lewis, June 26, 2004

E-mail exchange, Andrea Saul, spokeswoman, Mitt Romney for President

E-mail exchange, Kristin Sosanie, spokeswoman, Obama for America – Minnesota