Mitt Romney's Own 2002 Testimony Undermines Bain Departure Claim

Posted: 07/12/2012 6:54 pm Updated: 07/13/2012 8:51 am

WASHINGTON -- Mitt Romney's repeated claim that he played no part in executive decision-making related to Bain Capital after 1999 is false, according to Romney's own testimony in June 2002, in which he admitted to sitting on the board of the LifeLike Co., a dollmaker that was a Bain investment during the period.

Romney has consistently insisted that he was too busy organizing the 2002 Winter Olympics to take part in Bain business between 1999 and that event. But in the testimony, which was provided to The Huffington Post, Romney noted that he regularly traveled back to Massachusetts. "[T]here were a number of social trips and business trips that brought me back to Massachusetts, board meetings, Thanksgiving and so forth," he said.

Romney's sworn testimony was given as part of a hearing to determine whether he had sufficient residency status in Massachusetts to run for governor.

Romney testified that he "remained on the board of the Staples Corporation and Marriott International, the LifeLike Corporation" at the time.

Yet in the Aug. 12, 2011, federal disclosure form filed as part of his presidential bid, he said, "Mr. Romney retired from Bain Capital on February 11, 1999 to head the Salt Lake Organizing Committee. Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way."

Bain, a private equity firm, held a stake in the LifeLike Co. until the end of 2001, including during the period in which Romney claimed to have no business involvement with Bain entities. Bain had heavily invested in LifeLike, a company that Romney identified personally as an opportunity, in 1996 and sold its shares in late 2001. His involvement with LifeLike contradicts his assertion that he had no involvement with Bain business. His testimony is supported by his 2001 Massachusetts State Ethics Commission filing, in which he lists himself as a member of LifeLike's board.

Romney has long said that he took a leave of absence from Bain because the work of organizing the 2002 Winter Olympics was so grueling, which has allowed him to deny responsibility for Bain activities during 1999 and 2002.

His activities during that period also included Staples board meetings: "I returned for most of those meetings. Others I attended by telephone if I could not return."

Bain was involved with Staples early in its life, taking the company public in 1989. Romney used his Bain position to obtain a seat on the board, which he held into 2002. He regularly cites the jobs that Staples created as reflecting positively on Bain's record.

The Boston Globe on Thursday blew a giant hole in Romney's claim that he left the private equity firm in 1999. The Globe reported that Bain's own filings with the Securities and Exchange Commission suggest that Romney remained deeply tied to the company until sometime in 2002.

Bain described Romney in 2001 SEC filings as the "sole stockholder, chairman of the board, chief executive officer, and president." Another form stated that he owned 100 percent of the company in 2002 and received a six-figure salary from Bain in 2001 and 2002. His listed title: "Executive."

Earlier reporting on the topic by Talking Points Memo and Mother Jones had already begun to chip away at the Romney narrative.

The Romney campaign is still sticking with its candidate's story.

"The article is not accurate," spokeswoman Andrea Saul said in a statement released to reporters following the Globe story. "As Bain Capital has said, as Governor Romney has said, and as has been confirmed by independent fact checker multiple times, Governor Romney left Bain Capital in February of 1999 to run the Olympics and had no input on investments or management of companies after that point."

Yet Romney's sworn testimony appears to back up the SEC filings and contradict his personal disclosure forms submitted to Massachusetts officials in 2002, in which he said that he retired from Bain on Feb. 11, 1999.

Romney's lawyer at the Massachusetts hearing said that Romney's work in the private sector continued "unabated" while he ran the Olympics: "He succeeded in that three-year period in restoring confidence in the Olympic Games, closing that disastrous deficit and staging one of the most successful Olympic Games ever to occur on U.S. soil. Now while all that was going on, very much in the public eye, what happened to his private and public ties to the Commonwealth of Massachusetts? And the answer is they continued unabated just as they had."

Instead of leaving in 1999, Romney suggested in his testimony that he only left Bainafter the Olympics in 2002: “I left on the basis of a leave of absence indicating that I, by virtue of that title, would return at the end of the Olympics to my employment at Bain Capital, but subsequently decided not to do so and entered into a departure agreement with my former partners. I use that in the colloquial sense, not legal sense, but my former partners."

The opening statement delivered by Romney's lawyer in the 2002 hearing said Romney "continued to serve on the board of directors of a significant Massachusetts company and to return here for most of its board meetings."

In a statement released Thursday, Bain defended Romney. "Mitt Romney left Bain Capital in February 1999 to run the Olympics and has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure," the statement reads. "Due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999. Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period."

UPDATE: 9:15 p.m. -- The Romney campaign responded by focusing on Romney's involvement with Bain itself, and argued that the state Ballot Law Commission validated the argument that Romney was not involved in day-to-day Bain matters.

"After extensive hearings the Ballot Law Commission came to the same conclusion as numerous independent fact checkers in finding that Mitt Romney ended his active employment with Bain Capital in 1999," said Romney spokeswoman Amanda Henneberg. "Every public judgment, including a unanimous one from the Ballot Law Commission, has confirmed this fact."

Henneberg called the controversy over Romney's employment at Bain "just another distraction from a desperate campaign that is willing to say anything to divert attention from President Obama’s failed record in office.”

However, the purpose of the Ballot Law Commission inquiry was to determine Romney's residency, not whether he had done any part-time work on behalf of Bain. Indeed, in two days of testimony, the Democratic lawyer didn't question Romney about his role at Bain, as the issue wasn't a live one. That question only arose in recent years when Romney categorically denied any active involvement with Bain.

In addition, the Romney campaign's response does not address whether by sitting on LifeLike's board until 2001, Romney's 2011 disclosure form statement that he had "not been involved in the operations of any Bain Capital entity in any way" was false.

Is GM Becoming ‘China Motors’?

Posted on June 8, 2012

Q: Is General Motors becoming ‘China Motors’ using taxpayer dollars?
A: No. The restructured GM is still based in Detroit and is still one-third owned by the U.S. government. But it sells nearly as many cars in China as in the U.S. and has continued expanding operations there.
FULL QUESTION
How much of this is true?

Subject: Video – No more GM cars for me!
WHAT AN EYE-OPENER!
No more GM cars for me.
Even if this were only half true it would light a fire under you. Trouble is, it’s ALL true !!!

YES, YOUR TAX MONEY AT WORK, THANKS TO THE OBAMA ADMINISTRATION !!!!!

Published on May 22, 2012 by MarinePatriot0311

http://www.Liberty.com Cadillac, a symbol of "American Freedom & Prosperity" division of General Motors, is quickly turning Communist Chinese. With the agreement by Cadillac to pay for the production expenses of a Chinese Communist Party propaganda film, the Cadillac brand now stands for something quite different: the appeasement of a power hostile to the United States in the name of financial gain.

GM CEO Daniel Akerson describes China as the "key to [GM"s] success. Our commitment to work in China, with China, and for China remains strong and focused on the future." President Obama has been using GM in his election ads as one of the "successful" bailouts. GM was one of the auto companies receiving 2009 federal bailout money.

The film GM is funding, with an English title of " Birth of a Party or The Great Achievement of the Founding of the Party ", is due to be released in China on June 15. Cadillac hopes to market its luxury cars to Chinese Communist Party leaders. Chinese Communist leaders can drive the luxury car that Communist President Obama drives.

Cadillac lost its luster as the top vehicule symbol of status to other makes of cars long ago, after decades of legendary poor workmanship and terrible gas mileage. Cadillac can now add to its list of misjudgments paying for a film commemorating the founding of the Chinese Communist Party, a political organization which has been responsible for the deaths of many millions of human beings whose only crime was that they may have disagreed with the Party.

The action of Cadillac is not merely an act of kowtow in the hope of profit. It is the reflection of a much wider strategy by China to establish dominance - economically, socially, politically, and militarily. In turn, this dominance is in the name not of Chinese civilization, but of an ideology introduced into general Chinese society by the Communist Party of China.

Cadillac's payment for this communist propaganda film occurs within the context of a single-party State in which all activities are monitored by a large and efficient secret police. The Chinese Communist Party is able to lay out courses of action that are to occur over many years.

FULL ANSWER

Several readers have asked us about the claims stated in a viral video that criticizes General Motors’ expanding operations in China. The video has received more than half a million views on YouTube since it was posted May 4. The narrator, a man who gives his name as Vince Wade, asks: “Did we bail out GM so that it could become a Chinese company?”
It’s a fair question. The short answer is, “No.”

Still American

GM is still a U.S.-based multinational auto company, incorporated in Delaware and headquartered in Detroit. In fact, according to the Congressional Budget Office, about 33 percent of the stock in GM is still owned by the U.S. Treasury as a result of a taxpayer-assisted bankruptcy and downsizing in 2009.
But the company sells cars in more than 120 countries and accounted for nearly 12 percent of all car and truck sales worldwide last year (11.9 percent, according to GM’s annual report). It’s also true that China is now the largest market for car sales on earth. Total car sales in China surpassed those in the U.S. in 2009. China retained the lead in 2011, and that lead is expected to grow in the future.
So like it or not, the world’s automakers have been drawn to this huge and growing market, and GM has been particularly successful there. The video’s narrator clearly doesn’t like it.
His video asks, “Was the bailout a mistake?” And he goes on to quote an account criticizing GM’s Cadillac brand for supposedly currying favor with “the underworld mob that runs China.”
We won’t offer opinions on whether or not GM or any other company should be doing business in China, or on other controversial issues on which the narrator takes a stand. Our job is to look at the facts.
Overall, the video gives a one-sided picture. And on a couple of points it misleads. Here we offer a more complete and accurate picture, so readers may decide for themselves how they feel about GM’s dealings in China.

GM Expanding

Narrator Wade states that “GM has been shrinking its U.S. operations, while it’s aggressively expanding and investing in the People’s Republic of China.” But the fact is GM is currently expanding in both places.
It’s true that GM shrank much of its U.S. operations — shedding old brands and dealerships and many workers — when it went through bankruptcy in 2009. The alternative was to go out of business entirely.
But since then, the “new” GM has enjoyed expanding sales and operations. For example, it  announced in January that it is building a new, $200 million stamping plant in Arlington, Texas. And it states: “Since June 2009, the company has announced more than $6.9 billion of investment to upgrade or expand operations in 12 states, creating or retaining more than 17,600 jobs.”
It’s true that GM also has been expanding in China — but that was true long before the bailout. The “old” GM (the one that went bankrupt) was the largest foreign car maker in China in 2008, battling for supremacy there with Volkswagen.
The “new” GM has continued that overseas success. It sold a record 231,183 vehicles in China in May, up 21 percent from a year earlier, for example. That compares with 245,256 vehicles sold in the United States, up 11 percent from a year earlier and the highest in 33 months.

Cost to Taxpayers

The video is also misleading as to the cost of taxpayer support. It cites a figure of $80 billion, which actually covers the government’s peak disbursements for both GM and Chrysler, as the narrator mentions in passing. But the net cost of the entire bailout is currently estimated to end up being $19 billion (by the Congressional Budget Office) to $22 billion (by the U.S. Treasury).
Most of that $80 billion has been recovered through interest payments, loan repayments and sale of government-owned stock. And of course, some portion of that is attributable to bailing out Chrysler.
Taxpayers still own about 33 percent of GM stock, according to CBO (other calculations put the total closer to 32 percent). Either way, the final cost of the bailout depends largely on whether the price of GM stock rises or falls between now and when the government decides to sell its shares.
So the better GM does, the less U.S. taxpayers will be hurt. And a key part of GM’s global business strategy is selling and manufacturing cars in China. As then-GM CEO Rick Wagoner said in 2008: “The automaker that gets China right will be the future leader of the industry.”

Global Auto Realities

Much of the video is devoted to showing GM Chairman and Chief Executive Officer Daniel F. Akerson explaining GM’s overseas operations to reporters in Shanghai in February 2011. Akerson noted that almost “seven out of 10 of our vehicles were made outside the United States” and that “we have 11 joint ventures” with government-owned Chinese companies (which the narrator later describes as partnerships with the “autocratic, anti-Democracy, Communist government of China”).
Akerson goes on to say, “We’re involved in vehicle manufacturing, sales, distribution, engineering design” and other auto-related businesses. He also said GM operates 11 assembly plants and four power train plants in eight cities in China.
That may sound surprising to some viewers, but the fact is that building and selling cars outside the home country is standard for multinational auto firms today. Japanese and German firms have many manufacturing facilities in the U.S., for example.
In fact, the top 10 “American-made” cars as ranked by Cars.com include three made by Toyota and two made by Honda (plus three made by GM, one by Ford and one by Jeep, a division of Chrysler, which is still U.S.-based but mostly owned by the Italian auto firm Fiat.) The single most “American” car made and sold in the U.S. today is the 2012 Toyota Avalon, with 85 percent domestic content (meaning parts made in either the U.S. or Canada), according to ratings published by the National Highway Traffic Safety Administration. Two GM passenger vans are tied for second, with 82 percent domestic content. (Toyota’s Matrix has 95 percent domestic content, more than any other vehicle sold in the U.S., but is assembled in Canada.)
GM’s facilities sprawl across the globe. Besides its plants in the U.S. and China, it is the third-largest car maker in Korea. It makes cars in Brazil, has owned Britain’s Vauxhall brand since 1925, and still owns the troubled Opel brand, manufactured in Germany, Poland and Britain, to cite a partial list.

Other Issues

Some of the more than nine-minute video is devoted to flaying Cadillac for its sponsorship of what the narrator describes as “a propaganda film, celebrating the anniversary of the founding of the Communist Party of China.” That much is true enough, and the video includes shots of the premiere with the Cadillac logo sharing the stage with the party’s hammer-and-sickle symbol.
But then the video quotes extensively from a story in the Epoch Times newspaper, in which the reporter cites a “suspicion” that GM was marketing Cadillacs to top party officials to curry their favor. But the full text of the story shows the reporter prefaced that by saying, “I have no proof.” So that speculation may or may not be accurate.
A statement that China’s leaders constitute an “underworld mob” — also quoted — is the opinion of the Epoch Times writer, Matthew Robertson. As the video narrator mentions, the Epoch Times leadership has numerous ties to the dissident Falun Gong movement. Followers were widely persecuted by the Chinese government, and that may color the newspaper’s reporting.
Another issue raised by the video is the sale of the Saginaw, Mich.-based GM supplier Nexteer to a Chinese firm. But the Wall Street Journal reported in February that the deal has turned out pretty well for U.S. workers: “Today, few people in town are wringing their hands about the Chinese. Inside a 59-year-old factory at Nexteer’s sprawling complex, contractors are ripping out antiquated machine lines and installing new equipment to produce an electronic steering system for the next generation of GM’s large pickup trucks and SUVs. The company, for years known as Saginaw Steering Gear, has hired more than 100 engineers in Saginaw last year and is looking for 80 more this year.”
The narrator is critical of both President Barack Obama and the probable Republican nominee Mitt Romney. He states that two big Romney supporters profited from the bailout. That’s based on a report by freelance investigative reporter and author Greg Palast. We can’t vouch for its accuracy. Palast is a veteran fraud investigator with an MBA from the University of Chicago. But as a journalist, he also has his critics.
We of course take no position on whether GM’s operations in China are a good thing or a bad thing, or whether the GM bailout should have been handled differently, or at all. We also take no position on whether car buyers should boycott GM, as the writer of one version of an email suggests in the headline. We only note that there are far fewer “tax dollars at work” than this video suggests, and that — like it or not — the auto business is global, China is the biggest market for cars on the planet, and if GM doesn’t build and sell cars there then others will. So the things this video finds distressing are happening with or without the bailout.
– Brooks Jackson

Sources

Wade, Vince. “General Motors is becoming China Motors.” YouTube video. 4 May 2012.
“Report on the Troubled Asset Relief Program—March 2012.” Congressional Budget Office. 28 Mar 2012.
“About GM: Our Company.” General Motors Corp. Web page. Undated, accessed 7 Jun 2012.
General Motors Corp 2011 Annual Report; Form 10-K. Filed with the U.S. Securities and Exchange Commission. 27 Feb 2012.
Guillaume, Gilles. “China car sales top U.S.” Reuters. 11 Jan 2010.
Yan, Fang & Ken Wills. “UPDATE 1-China 2011 car sales gains at slowest annual pace.” Reuters. 12 Jan 2012.
Chrysler, Mack. “No Stopping China as Top Global Auto Market, Study Says.” WardsAuto. 4 Jan 2012.
Puzzanghera, Jim & Ken Bensinger. “GM proposes painful downsizing in bid for survival.” Los Angeles Times. 28 Apr 2009.
“GM Will Build $200 Million Stamping Facility in Texas.” General Motors Corp. news release. 31 Jan 2012.
Tang, Eugene & Stephen Engle. “GM Introduces Hybrid in China to Help Keep Sales Lead (Update1).” Bloomberg News. 21 Apr 2008.
“GM Sales in China Up 21.3 percent to set May Record: Sales for first five months of 1.2 million vehicles up 11.5 percent over 2011.″ General Motors Corp. news release. 5 Jun 2012.
“GM Reports Highest Monthly Sales in 33 Months.” General Motors Corp. news release. 1 Jun 2012.
U.S. Treasury Department. “Troubled Asset Relief Program (TARP)Monthly Report to Congress – April 2012.” 10 May 2012.
Mays, Kelsey. “The Cars.com American-Made Index.” Cars.com. 27 Jun 2011.
Part 583 American Automobile Labeling Act (AALA) Reports. “AALA 2012 LISTED BY PERCENTAGE”. National Highway Traffic Safety Administration. 11 Mar 2012.
“GM in Korea.” General Motors Corp Web page. Undated, accessed 7 Jun 2012.
“General Motors to Invest $1 Billion in Brazil Operations.” Latin American Herald Tribune. 7 Jun 2012.
“Vauxhall in the UK.” General Motors Corp Web page. Undated, accessed 7 Jun 2012.
Cremer, Andreas. “Future of German Opel plant uncertain after 2014.” Reuters. 21 May 2012.
“Cadillac Sponsors Communist Propaganda Film.” ChinaAutoWeb. 2 Sep 2010.
Robertson, Matthew. “Cadillac Sponsors Chinese Communist Propaganda Bonanza, Foot in the Door.” Epoch Times. 17 May 2011.
Hua, Vanessa. “Dissident media linked to Falun Gong; Chinese-language print, broadcast outlets in U.S. are making waves.” San Francisco Chronicle. 18 Dec 2005.
Beaumont, Peter. “China’s Falun Gong crackdown: ‘The persecution is almost underground.’ ” The Guardian. 18 Jul 2009.
White, Joseph B. & Norihiko Shirozu. “In the Heart of the Rust Belt, Chinese Funds Provide the Grease.” The Wall Street Journal. 11 Feb 2012.
Palast, Greg. “Revealed: Romney’s Top Funders Made Billions on Auto Bail-Out.” Nation of Change: Progressive Journalism for Positive Action. 23 Feb 2012.
Galloway, George. “Et Tu, Greg Palast?; The Slime Artist.” Counterpunch. 20 Sep 2005.

GM to Add 600 China Dealerships

 Updated April 23, 2012, 2:15 p.m. ET

By SHARON TERLEP

BEIJING—General Motors Co. GM +1.14% plans to add 600 dealerships in China this year, about a 20% increase, as the auto maker looks to bolster its presence here amid growing competition and an economic-growth slowdown.
Chief Executive Dan Akerson on Monday outlined steps GM is taking to boost sales and market share in China, where it is the largest foreign auto maker.
The addition of 600 dealerships would bring the company's dealer network in China to 3,500 stores, up from 2,900 at the end of 2011. At that size, China's dealers would begin to rival the company's U.S. network of 4,400.
GM is adding new models and factory capacity and expanding a technology center near its China headquarters in Shanghai, which will soon be its second-largest global development center. The largest is in Warren, Mich., near its Detroit headquarters.
Like GM, many of the world's major auto makers are expanding in China, concentrating on a market expected to grow to more than 30 million vehicle sales by the end of the decade from 18.5 million last year.
But China auto sales fell 2% last year after a stretch of explosive growth, raising questions about demand.
Mr. Akerson said he is confident the market will grow over the long term.
"If you didn't believe in this country and its growth potential, you'd have feet of clay—we don't," he said, speaking to reporters at the Beijing auto show.

Here Comes the Made-in-China Cadillac

By Howard Richman & Raymond Richman
May 9, 2012

It's déjà vu all over again!  GM again caves to Chinese pressure.  In September it was the electric car.  In April it was the Cadillac.
The Chinese government made its latest move in December.  That's when The Guardian reported that the Chinese government raised its already high 25% tariff upon American-made vehicles, concerned that increasing numbers of big-engine cars were being purchased by Chinese consumers:

General Motors faces the greatest impact, almost 22% extra on some sports utility vehicles (SUVs) and other cars with engine capacities above 2.5 litres. Chrysler faces a 15% penalty, while a 2% levy will be imposed on BMW, whose US plants make many of the cars it exports to China.
Existing taxes and duties already push up the cost of US imports by 25%, and the new levies make it even more expensive for Chinese consumers to buy American.

Now we learn what they were after.  In a May 2 Huffington Post commentary ("Commies in Cadillacs: GM Turns Chinese"), economists Peter Navarro and Greg Autrey reported that GM will build its luxury cars in China instead of exporting them to China.  They began:

General Motors announced this week that it will start building the Cadillac XTS, CTS and ATX in China in an attempt to keep up with the insatiable demand for luxury consumption by that nation's nominally Marxist elite. It seems that Communist Party princelings and their crony capitalist clients just can't get enough Caddies, not to mention the BMWs, Ferraris and Lamborghinis.

This will be a joint venture with SAIC, the company that owns 51% of GM's China business.  The announcement of the new factories was made by the vice president of GM China at a Beijing auto show on April 23.  Valuewalk.com reports:

In 2012, GM will build the new 2013 Cadillac XTS sedan in China, followed by the ELR luxury electric coupe.
Currently, China is only selling one model, the large-length luxury sedan, the Cadillac SLS; it is built in the country while it imports the CTS, SRX crossover and Escalade from U.S. and Mexico plants, reported The Detroit News.

Nine months ago, the same scenario played out even more quickly.  On September 16, the Wall Street Journal reported ("Road Gets Bumpy for GM in China") that the Chinese government was pressuring GM to give away its proprietary electric car technology.  At that point, GM was refusing.  Here's a selection:

GM would like to bring its Volt electric car into China. But Chief Executive Dan Akerson said he refuses to share electric-car technology in exchange for hefty consumer rebates from the Chinese government that would juice sales of the vehicle.

Just one week later, on September 22, the NY Times reported ("GM to develop electric cars with Chinese automaker") that GM had caved to the Chinese government demand:

HONG KONG: General Motors said Tuesday that it would develop electric cars in China through a joint venture with a Chinese automaker [SAIC], and would transfer battery and other electric car technology to the venture.

As a condition for doing business in China, the Chinese government requires that GM share its made-in-America technologies with SAIC, which is both its Chinese partner and its competitor.  Back in 2009, Bloomberg reported ("GM Set for 'Harder Life' in China as Partner SAIC Adds Models") that SAIC is already using GM's technology to produce cars for the Chinese market, outside its partnership with GM.  In February, SAIC got GM's electric car technology.  In April, SAIC got GM's Cadillac technology.
The left pretends that evil corporations owned by wealthy Americans build factories in China in order to avoid paying higher U.S. wages.  But this is Obama's car company we are talking about.  GM (Government Motors), the company that Obama saved from having to pay its pension benefits, the company that Obama saved from being owned by its bondholders, the company that Obama saved from break-up into its constituent parts, the company that Obama claims as his biggest accomplishment.  Here it is building  Cadillac factories in China instead of exporting Cadillacs from the United States to China.  Why?
The reason is simple.  Manufacturers know that, under the current system, they can produce in China and sell to the United States, but they will not be allowed to produce in the United States and sell to China -- all because the Obama administration does not have the intelligence or will to invoke the WTO rule for trade-deficit countries invoked by President Nixon on August 15, 1971, when he imposed an across-the-board 10% tariff which balanced U.S. trade by 1973.
If President Obama invoked Nixon's WTO rule, he could demand trade reciprocity (we buy your products; you buy ours).  He could impose a trade-balancing scaled tariff upon imports from all the countries with which the U.S. has a trade deficit.  Such a tariff would go up when the U.S. trade deficit with a country goes up, go down when it goes down, and disappear when trade with that country approaches balance.
Then GM would be able to produce its Cadillacs and Volts in America and export them to China.  It could preserve its inventions for its own use, instead of having to give them to its Chinese competitor.  Not only that, but with increased manufacturing investment, the U.S. economy could start growing rapidly again.
On May 3 and 4, Obama's Secretary of State Clinton and Treasury Secretary Geithner traveled to Beijing to beg for a more level playing field for American trade and investment.  (Even sacrificing a Chinese dissident, who sought refuge in our embassy, in order to show our goodwill to China!)
In his closing remarks, Geithner pretended that our economic trade relationship with China is improving.  He said:

We have made significant progress on the economic front since early 2009. U.S. exports have almost doubled. The Chinese currency has appreciated significantly. China's trade surplus has fallen substantially.

It is true, as Geithner claims, that U.S. exports to China have risen, but U.S. imports from China have risen much more rapidly.  For the past 25 consecutive months, U.S. net exports (exports minus imports) of goods with China have fallen steadily, subtracting more and more from U.S. GDP and income.  Even in February, when China ran a temporary trade deficit with the rest of the world, United States net exports to China declined, as shown in the graph below:

Although China is reducing its overall trade surpluses, it is increasing its trade surpluses with the United States.  Is this coincidence or deliberate Chinese policy?  If the latter, it raises the possibility -- nay, the probability -- that China is using trade to acquire economic and military power for itself and to bring down the economic power of the United States.
But Geithner seems oblivious to this possibility.  In his closing remarks, he praises China for reducing its trade surpluses with the rest of the world, never once mentioning that China is increasing its trade surpluses with the United States.  He actually appears to be pleased with how well things are going.
Republican presidential candidate Mitt Romney plans to change our trade relationship with China.  As we reported after reading his 2010 book ("Romney's Theory about Why Companies and Countries Decline"), he is intent upon meeting the economic and political challenges that the United States faces from its competitors.  The following statement on his website summarizes Romney's current trade position regarding China:

China presents a broad set of problems that cry out urgently for solutions. It is time to end the Obama administration's acquiescence to the one-way arrangements the Chinese have come to enjoy. We need a fresh and fearless approach to that trade relationship. Our first priority must be to put on the table all unilateral actions within our power to ensure that the Chinese adhere to existing agreements. Anyone with business experience knows that you can succeed in a negotiation only if you are willing to walk away. If we want the Chinese to play by the rules, we must be willing to say "no more" to a relationship that too often benefits them and harms us.

Under President Obama, our trade relationship with China has deteriorated steadily.  American manufacturers know that, with Obama as president, they can produce in China and sell to the United States, but they will not be allowed to produce in the United States and sell to China.  Romney will demand at least some reciprocity from China.  He could not do worse than Obama.
The authors maintain a blog at www.idealtaxes.com and co-authored the 2008 book Trading Away Our Future: How to Fix Our Government-Driven Trade Deficits and Faulty Tax System Before it's Too Late, published by Ideal Taxes Association.

Lawmakers respond to Supreme Court Healthcare Ruling

From silly thesis to silly film

By Steve Benen

  -  

Fri Jul 13, 2012 1:18 PM EDT

Remember Dinesh D'Souza? He's the right-wing writer who wrote a strange book attacking President Obama for trying to carry out an "anti-colonial" agenda he inherited from his Kenyan father. It's a thesis as silly as it is ugly, based on bizarre assertions about the president having the mindset of an African "Luo tribesman."

The Weekly Standard criticized it for "misstatements of fact, leaps in logic, and pointlessly elaborate argumentation." When D'Souza's thesis first appeared as a piece in Forbes, one of the magazine's own columnists blasted D'Souza's "intellectual goofiness," "factual problems," and "unsubstantiated ideological accusations." The Columbia Journalism Review called D'Souza's piece "a fact-twisting, error-laden piece of paranoia" and a "singularly disgusting work."

And of today, the thesis is a movie. No, seriously. Here's the "trailer," which I assure you is not a parody.

The estimable Mariah Blake, my former colleague at the Washington Monthly, reported forSalon this week on how D'Souza's harangue found its way to filmmakers, boosted in part by millions of dollars he received from conservative benefactors, including TD Ameritrade founder Joe Ricketts.

As for the smear itself, the thesis is so deeply ridiculous, I'm not sure whether to be offended by the disgusting attack or to feel sorry for those foolish enough to be associated with such transparent nonsense.

Regardless, I can only assume the "movie" will do quite well -- it was produced by the maker of a 2008 anti-evolution documentary that ranks among the highest-grossing documentaries of all time.

Report slams Penn State's 'total disregard' in Sandusky case

By Kevin Johnson and Erin Egan, USA TODAY

Updated 4d 6h ago

Senior Penn State administrators exhibited a "total disregard for the safety and welfare'' of the children who were sexually abused by former Penn State University assistant football coach Jerry Sandusky, according to an internal investigation of the university.

• 
  Eileen Blass, USA TODAY
  Louis Freeh holds a press conference in Philadelphia regarding the investigation of Penn State over how it handled the Jerry Sandusky sex abuse case.

Enlarge

Eileen Blass, USA TODAY

Louis Freeh holds a press conference in Philadelphia regarding the investigation of Penn State over how it handled the Jerry Sandusky sex abuse case.

"The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized,'' the investigation concluded.

It cited former Penn State University president Graham Spanier, former vice president Gary Schultz, former head football coach Joe Paterno and Athletic Director Tim Curley, now on leave, as never demonstrating "through actions or words, any concern for the safety and well-being of Sandusky's victims until after Sandusky's arrest."

The 267-page report by former FBI director Louis Freehcomes less than three weeks after Sandusky was convicted of 45 counts of child sexual abuse involving 10 victims during a span of 15 years. Sandusky remains in a central Pennsylvania county jail awaiting formal sentencing.

At a press conference in Philadelphia after the report was released Freeh said Paterno, who died in January of cancer, could have stopped the abuse "if he so wished."

• MORE: Read through the entire Freeh Report

• MORE: Sandusky convicted on 45 charges, faces life in prison

• INTERACTIVE: Key players in Sandusky case

"We have a great deal of respect for Mr. Paterno and condolences for his family on the loss, it's a person with a terrific legacy, a great legacy, who brought huge value not just to the university but the program," Freeh said. "He, as someone once said, made perhaps the worst mistake of his life. But we're not singling him out. We're putting him in a category of four other people who we would say are the major leaders of Penn State."

"None of them ever spoke to Sandusky about his conduct," Freeh said. "Nothing was done and Sandusky was allowed to continue with impunity. … None of these four men took responsible action."

He also said the university trustees needed to take responsibility.

The Freeh file

By Greg Toppo, USA TODAY

Louis J. Freeh, 62, was born in Jersey City. He graduated from Rutgers College in 1971, earning a law degree from Rutgers Law School and a Master’s of Law degree from New York University.

A onetime first lieutenant in the U.S. Army Reserve, Freeh first worked for the FBI as a special agent in 1975, first in New York, then at the bureau’s Washington headquarters. He left the FBI in 1981 to work as a federal prosecutor in New York.

In 1985, Freeh was lead prosecutor, under U.S. Attorney Rudy Giuliani, in the “Pizza Connection” case, which broke up a $1.6 billion international heroin, money-laundering and organized crime ring that operated out of pizzerias in the Northeast and Midwest. Prosecutors said the ring was controlled by the Sicilian Mafia and a faction of its American counterpart, La Cosa Nostra. A 17-month trial ended in 1987 with 16 convictions.

Four years later, President George Bush appointed Freeh as a U.S. District Court judge for the Southern District of New York. In 1993, President Bill Clinton nominated him to be FBI director.

During his tenure, Freeh clashed with Attorney General Janet Reno over the bureau’s investigations of the deadly standoff at Waco, Texas, in 1993 and the FBI’s investigation of Los Alamos scientist Wen Ho Lee in 1999.

In 1996, FBI agents arrested “Unabomber” Theodore Kaczynski after The New York Times and Washington Post agreed to publish a 35,000-word diatribe by Kaczynski at Freeh and Reno’s recommendation. Kaczynski’s brother David recognized the writing style and led police to Kaczynski’s Montana cabin.

Freeh led the bureau until 2001 and was among the longest-serving directors in its 104-year history.

Now a private attorney, he runs Freeh Group International Solutions, a risk management firm. His law firm, Freeh Sporkin & Sullivan, investigated the Sandusky case.

According to the Embassy of Italy, Freeh acquired Italian citizenship in 2009.

Contributing: Associated Press

"The board failed in its oversight," he said. "They did not create an atmosphere where the personnel and the senior officials were accountable to the board."

Freeh said a 2000 incident, in which Sandusky's abuse of a young child in a football locker room was witnessed by a university janitor, represented a culture of silence that prevailed at Penn State to avoid bad publicity.

• COLUMN: Report is damaging to Paterno's legacy

• INTERACTIVE: Should Penn State take down Paterno statue?

• COLUMN: Penn State football should shut down

"What I found to be extremely telling and critical in deciding not just what I thought recommendations should be, is the janitors," Freeh said. "These are the employees of Penn State who clean and maintain the locker rooms in the Lasch building where young boys are being raped. They witness, what I think in the report is probably the most horrific rape that's described. And what do they do? They panic. The janitor who observes it says it's the worst thing he ever saw. He's a Korean war veteran. He said he's never seen anything like that. 'It makes me sick.' He spoke to the other janitors. They were awed and shocked by it. But, what did they do? They said they can't report this cause they'd be fired. They knew who Sandusky was."

The report said "they were afraid to take on the football program. They said the university would circle around it. It was like going against the president of the United States. If that's the culture on the bottom, God help the culture at the top."

Paterno's family issued a written statement Thursday, saying the report was being reviewed. But the statement cautioned against "replaying of events from the last 15 years or so in a way that makes it look obvious what everyone must have known and should have done.''

"The idea that any sane, responsible adult would knowingly cover up for a child predator is impossible to accept,'' the family said. "The far more realistic conclusion is that many people didn't fully understand what was happening and underestimated or misinterpreted events.

"It can be argued that Joe Paterno should have gone further," the statement said. "He should have pushed his superiors to see that they were doing their jobs. We accept this criticism."

The Freeh Report said a "critical written correspondence'' uncovered earlier this year contained evidence of a proposed plan to report a 2001 incident to law enforcement officials involving Sandusky and a young boy in a university shower room that was witnessed by football assistant coach Michael McQueary.

"After Mr. Curley consulted with Mr. Paterno, however, they changed the plan and decided not to make a report to the authorities,'' the report said.

The report said Curley recommended a different course of action to Spanier and Schultz: they would offer Sandusky "professional help;" assist him in informing "his organization" (the Second Mile) about the allegation; and, if Sandusky was "cooperative," not inform the Department of Public Welfare of the allegation.

"Their failure to protect the … child victim, or make attempts to identify him, created a dangerous situation for other unknown, unsuspecting young boys who were lured to the Penn State campus and football games by Sandusky and victimized repeatedly by him," the report said.

"Further,'' the report said, "they exposed this child to additional harm by alerting Sandusky, who was the only one who knew the child's identity, about what McQueary saw in the shower on the night of February 9, 2001."

Citing witness statements and other evidence, the university officials acted "in order to avoid the consequences of bad publicity.''

"The most powerful leaders at Penn State University - Spanier, Schultz, Paterno and Curley - repeatedly concealed critical facts relating to Sandusky's child abuse from the authorities, the Board of Trustees, Penn State community, and the public at large," the report said.

"Although concern to treat the child abuser humanely was expressly stated, no such sentiments were ever expressed by them for Sandusky's victims,'' the investigation concluded.

The report described Spanier, Paterno, Curley and Schultz as wielding such power at the university that they went "unchecked'' by Penn State's board of trustees and "empowered Sandusky to attract potential victims to the campus.''

"Indeed that continued access provided Sandusky with the very currency that enabled him to attract his victims,'' the report said. "Some coaches, administrators and football program staff members ignored red flag of Sandusky's behaviors and no one warned the public about him.''

Penn State immediately released a statement that said officials are "currently reviewing (Freeh's) findings and recommendations. We expect a comprehensive analysis of our policies, procedures and controls related to identifying and reporting crimes and misconduct, including failures or gaps that may have allowed alleged misconduct to go undetected or unreported."

At a press conference Thursday afternoon Penn State's board of trustees and the university's president addressed the investigation and talked about how the school would implement recommendations in the report.

Chairman Karen Peetz said the board "accepts full responsibility for the failures that occurred. The board, in cooperation with the administration, will take every action to ensure an event like this never happens again."

Penn State President Rodney Erickson said he was "horrified" when he learned of the Sandusky allegations last year.

"With today's report we can continue the process of addressing the most painful chapter in the university's history," he said. "We must work together as we begin picking up the pieces and rebuilding our community."

The review, which focused on how top Penn State administration officials dealt with Sandusky during the time of the abuse and following a 2001 report of the former coach's abuse of a young boy in a university football locker room, is likely to have immediate implications on a continuing state grand jury investigation and the pending perjury trial of Curley and Schultz.

The two administrators, who have denied any wrongdoing, are charged with lying to the grand jury about a report of the 2001 incident that was related to them by McQueary.

Freeh's report said that "evidence shows'' that all four men — Spanier, Paterno, Curley and Schultz — also knew about a 1998 criminal investigation of Sandusky relating to suspected sexual misconduct with a young boy in a Penn State football locker room shower. The boy's mother had notified police.

"Again, they showed no concern about that victim,'' the report said. "The evidence shows that Mr. Paterno was made aware of the 1998 investigation of Sandusky, followed it closely, but failed to take any action, even though Sandusky had been a key member of his coaching staff for almost 30 years, and had an office just steps away from Mr. Paterno's."

"At the very least," the report said. "Mr. Paterno could have alerted the entire football staff, in order to prevent Sandusky from bringing another child" into the building where Sandusky abused several children.

Spanier, Schultz, Paterno and Curley also "failed to alert the Board of Trustees about the 1998 investigation or take any further action against Mr. Sandusky,'' the report said.

None of the officials, the report found, even confronted Sandusky about his conduct.

"In short, nothing was done and Sandusky was allowed to continue with impunity,'' the report said.

McQueary, a key prosecution witness in the Sandusky criminal trial, said he told the administrators and head football coach Paterno that Sandusky was engaged in "extremely sexual" conduct with a boy, who looked to be as young as 10. The boy has never been found.

Curley and Schultz told the grand jury that McQueary's report did not include an account of sexual activity.

The incident was at the heart of the university's decision, following Sandusky's November arrest, to remove Spanier from his post and fire Paterno, a college football legend who had directed the program for nearly a half century.

The report also revealed:

• After a story in the Patriot News newspaper reporting that Shultz, Paterno and Curley were among those appearing before the grand jury, a Penn State trustee e-mailed Spanier and asked if this is something the board should be briefed about. Spanier told the trustee that "we are only on the periphery of this."

•One trustee said that Spanier may have been "left to float too freely by himself" because he felt he could fix anything. Other trustees expressed that Spanier "filtered" issues in the best light of the desired outcome; showed trustees "rainbows" but not "rusty nails" and "scripted" or "baked" issues leaving no room to debate.

•Spanier on July 6 told investigators he made no effort to limit Sandusky's access to Penn State, and that he was unaware that Sandusky continued to be on campus and have access to children sleeping in campus dorms. Yet Spanier was "very aggressive" in an unrelated case in which he banned from campus a sports agent who had purchased $400 worth of clothing for a Penn State football player before the 1997 Citrus Bowl.

•While Penn State's Board of Trustees requested the special investigation, Freeh said he "took the unusual step of not providing any draft of the report" to the trustees. Members received it at "the same time and in the same manner as everyone else," he said.

•Investigators wanted to interview Sandusky but he didn't want to talk. The assistant district attorney who declined the prosecution in 1998 also refused to speak with investigators.

Freeh's report could have profound consequences for Spanier and the legacy of Paterno, who died in January shortly after being diagnosed with lung cancer.

Neither man was charged when the initial criminal case was filed last fall, but Spanier's attorneys and Paterno's family — in advance of Freeh's report — had issued strong statements claiming they did not attempt to cover for Sandusky. The statements referred to a recent CNN report, citing e-mails obtained by Freeh's investigation, which suggest that Spanier was made aware of the 2001 incident involving Sandusky and that a decision was made not to notify authorities after a reported consultation with Paterno.

"At no time in the more than 16 years of his presidency at Penn State was Dr. Spanier told of an incident involving Jerry Sandusky that described child abuse, sexual misconduct or criminality of any kind," Spanier attorneys Peter Vaira and Elizabeth Ainslie said earlier this week. "Selected leaks, without the full context, are distorting the public record and creating a false picture.''

In a separate statement earlier this week, Paterno's family said that the coach "did not cover up for Jerry Sandusky."

"Joe Paterno did not know that Jerry Sandusky was a pedophile," the family said. "Joe Paterno did not act in any way to prevent a proper investigation of Jerry Sandusky. To claim otherwise is a distortion of the truth."

On Thursday Bob Williams, vice president of communications for the NCAA, issued a statement that said: "Like everyone else, we are reviewing the final report for the first time today. As President Emmert wrote in his Nov. 17th letter to Penn State President Rodney Erickson and reiterated this week, the university has four key questions, concerning compliance with institutional control and ethics policies, to which it now needs to respond. Penn State's response to the letter will inform our next steps, including whether or not to take further action. We expect Penn State's continued cooperation in our examination of these issues."

Freeh said Penn State "failed to implement" the provision of a 1990 federal law that requires the collecting and reporting of the crimes such as Sandusky committed on campus in 2001.

The U.S. Department of Education launched a review late November to examine whether Penn State violated federal reporting and response requirements related to crimes committed on campus. Since then, Pent State has hired an official to coordinate and oversee programs that ensure overall compliance.

On Wednesday, Education Department Press Secretary Justin Hamilton declined to address the report but he said the department will "work with all relevant campus officials and law enforcement personnel to determine whether or not there was a violation of theClery Act. Beyond that, our investigation is ongoing and we have no more information to add at this time."

Beyond the potential legal and personal ramifications, the Freeh Report also could represent more financial liability for the university which is bracing for a wave of civil lawsuits from attorneys representing Sandusky's eight known victims who testified at the former coach's trial.

Immediately following the Sandusky guilty verdicts, Penn State issued a statement indicating its willingness to provide compensation for the victims. But attorneys representing at least two of the victims said they were planning legal action, regardless, but only after reviewing the Freeh Report.

"The moment the verdict was announced against Sandusky, the landscape of this scandal shifted toward a new focus on Penn State," said attorney Tom Kline, who represents one of Sandusky's victims.

"There is no doubt that we are going to file a claim against Penn State," Kline said. "Jerry Sandusky may have been the perpetrator, but Penn State was his enabler."

Wes Oliver, a Widener University law professor who has been closely monitoring the case, said it is in Penn State's "best interest to attempt to resolve the lingering matters quickly."

"The verdicts were so overwhelming against Sandusky," Oliver said, "that it suggests there shouldn't have been any doubt early on" that Sandusky represented a threat to children.

"It could take years to resolve these claims, but it is in everyone's best interest to settle these differences quickly," he said.

On Thursday Penn State freshman Mary Krupa downloaded the Freeh Report while sitting on campus at the HUB-Robeson Center, bracing herself for the worst but hoping that the information will help the Penn State community move forward.

"I wish I could get into their heads," Krupa said of university officials who ignored the abuse. "I just don't know what they were thinking to not report this. I just really hope the world does not think their actions represent us, the students."

Contributing: Carolyn Pesce, Mary Beth Marklein, Eric Prisbell, Jessica Tully and Kelly Whiteside.