The Truth-O-Meter Says:
Priorities USA Action

"Thousands (in China) owe their jobs to Mitt Romney's companies."

Priorities USA Action on Wednesday, July 25th, 2012 in an advertisement

Pro-Obama super PAC ad says thousands of Chinese workers owe their jobs to Mitt Romney's companies

This week, Priorities USA Action, a super PAC aligned with President Barack Obama, released an ad that uses the trappings of the Olympics to make snarky attacks on Mitt Romney.

Against a backdrop of Olympic opening-ceremony footage -- including shots of Romney when he headed the 2002 Winter Olympics in Salt Lake City -- the ad knocks Romney for allegedly outsourcing jobs and using offshore accounts.

"Welcome to the Olympics," the voiceover says. "There’s Mitt Romney, who ran the Salt Lake City games, waving to China, home to a billion people. Thousands owe their jobs to Mitt Romney’s companies." The announcer continues with claims about countries where Romney has had bank accounts or corporations.

In this item, we’ll look at the claim that "thousands (in China) owe their jobs to Mitt Romney's companies."

We -- and other fact-checkers -- have looked at some aspects of this issue before. But this claim merely states that thousands of Chinese citizens were employed by companies affiliated with Romney -- a much easier threshold of accuracy to meet, though also an activity that’s not as politically controversial as outsourcing.

When we contacted Priorities USA Action, a spokesman provided documentation that cited five companies -- picture-frame maker Holson Burnes; computer chip manufacturer ChipPAC; information technology companies Modus Media and E5; and GT Bicycle.

For each company, we’ll ask two questions: Is it accurate to call them "Mitt Romney’s companies"? And did the company have operations in China?

Holson Burnes

Was it a Mitt Romney company? Yes, as our friends at FactCheck.org have noted, "Except for a brief leave of absence to run for U.S. Senate in 1994, Romney worked at Bain during the entire time that it owned the Holson Burnes Group, from 1987 to 1995."

Did the company have operations in China? Yes. In a 1993 Securities and Exchange Commission filing, the company said it "maintains foreign production arrangements with over 35 suppliers located in Far Eastern countries including China."

ChipPAC

Was it a Mitt Romney company? Maybe. Romney left in February 1999 to run the Olympics. Bain agreed to purchase the ChipPAC one month later in March 1999; the sale was completed in August.

It’s important to note that Romney’s departure from Bain has been a bone of contention between the two campaigns. Romney started Bain Capital in 1984, but did he depart in February 1999, when he joined the Olympics? Or was it in 2002, when he negotiated a retirement agreement that was retroactive to February 1999, according to the Associated Press?

In a previous fact check, we took a middle ground. We concluded that Romney was not actively involved in the day-to-day management of Bain after 1999, but his influence at the company didn’t drop to zero. We think that applies to ChipPAC because it was purchased soon after he left for the Olympics.

Did the company have operations in China? Yes. According to a March 16, 1999, article in the Korea Herald, "ChipPAC has factories in Korea and China."

Modus Media

• Was it a Mitt Romney company? Yes. As FactCheck.org noted, Modus Media "was created in December 1997 as a subsidiary of another Bain-controlled company, Stream International Holdings Inc. Modus became an independent company in January 1998." That was during Romney’s undisputed tenure with the firm.

Did the company have operations in China? Yes. An SEC filing from 1999 notes that the company had a facility in China. The Romney campaign has noted that "many" of the company’s products "were manufactured in the United States and exported as retail packaged products.  Others were produced at international locations closer to the end users."

GT Bicycles

Was it a Mitt Romney company? Yes. The Romney camp acknowledges that Bain invested In GT Bicycles In November 1993.

Did the company have operations in China? It depends on your definition of "operations." The Romney camp acknowledges that Bain "acquired a company that already had been sourcing certain component parts abroad for years." An SEC filing said that "large orders are shipped in containers directly to these distributors from the company's Taiwan and People's Republic of China suppliers," and that "the company's business is highly dependent on products manufactured by foreign suppliers located primarily in Taiwan and Japan and to a lesser extent the People's Republic of China."

But to us, that sounds more like a client relationship than one in which Chinese workers were actually GT employees. This strikes us as a weaker connection.

E5

Was it a Mitt Romney company? No. The connection between E5 and Romney is easily the weakest of any on this list. An article in the trade publication Private Equity Week said the company was founded in October 2001. Bain got involved in mid-2002 when an affiliate, Bain Capital Ventures, invested $4 million, the publication reported. That was toward the end of the 1992-2002 period when Romney may have had a limited role with the company.

A Romney adviser told POLITICO that the E5 investment took place "well after the time (Romney) had any input into investments" at Bain: "He didn’t have any involvement in this particular deal."

Did the company have operations in China? Yes, but only after Romney was well out of the picture. Bain’s investment was designed to "develop our China capabilities," E5 CEO Gordon Brooks told Private Equity Week, and could have only happened after Romney was gone from the company.

Two more questions

Did these companies collectively employ "thousands" of people in China? It’s plausible. Just counting the three companies where the case is strongest -- Holson Burnes, ChipPAC and Modus Media -- it’s certainly possible that they had employees in the thousands. But nothing we’ve seen reported confirms that, including Priorities Action USA’s backup material.

Do they employ thousands in China today? This is only relevant because the ad says, "Thousands (in China) owe their jobs to Mitt Romney's companies" -- note how "owe" is in the present tense. But this is an even more speculative claim than whether these companies ever employed thousands of workers. Here, too, Priorities Action has not provided sufficient evidence.

Our ruling

Two of the companies cited by Priorities Action USA employed workers in China during Romney’s active years as CEO. Another employed workers in China after Romney left to work for the Olympics, but before he severed ties with the company entirely. Two other companies are of questionable relevance for proving the ad’s point.

It’s plausible that the first three companies we looked at employed "thousands" of workers in China, but we haven’t seen definitive evidence of that -- much less whether they do today. And Priorities USA Action has not provided sufficient evidence to prove the claim is accurate. On balance, we rate it Half True.

UPDATE: Shortly after we posted our item, readers informed us that the ad has been taken down from YouTube and from the Priorities USA Action website. It later became clear that it was taken down after pressure was applied by the U.S. Olympic Committee and the International Olympic Committee. Last we checked, it's still available here, but by the time you read this, it may be gone.

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About this statement:

Published: Wednesday, July 25th, 2012 at 5:38 p.m.

Subjects: Candidate Biography, Economy, Foreign Policy, Jobs, Message Machine 2012

Sources:

Priorities USA Action, "Romney’s Gold" (ad), July 25, 2012

Mitt Romney presidential campaign, response to Washington Post Fact Checker, June 27, 2012

Mitt Romney presidential campaign, response to questions about Bain Capital and outsourcing, undated

Priorities USA Action, "Memo: Romney Campaign Can’t Spin The Jobs Shipped Overseas," June 27, 2012

Securities and Exchange Commission, prospectus for Modus Media International Holdings, 2000

Securities and Exchange Commission, Form 10-K for Holson Burnes Group Inc., 1993

Securities and Exchange Commission, Form 10-K for GT Bicycles Inc., December 1996

Business Wire, "Holson Burnes Group Announces Preliminary Results of Its New Mass Merchant Frame Strategy," Feb. 6, 1995 (accessed via Nexis)

Korea Herald, "Hyundai sells ChipPAC to U.S. firm," March 16, 1999 (accessed via Nexis)

Private Equity Week, "E5 Repairs IT Troubles with $10M Series A," September 30, 2002 (accessed via Nexis)

Boston Globe, "Mitt Romney stayed at Bain 3 years longer than he stated," July 12, 2012

POLITICO, "In '02, Bain invested in software development in China (Updated)," July 16, 2012

Associated Press, "When did Romney leave Bain? Documents conflict with his statements," July 12, 2012

PolitiFact, "Were Romney's companies 'pioneers in outsourcing'?" July 13, 2012

Washington Post Fact Checker, "Romney’s Bain Capital invested in companies that moved jobs overseas," June 21, 2012

FactCheck.org, "Obama’s ‘Outsourcer’ Overreach," Updated July 2, 2012

E-mail interview with Brennan Bilberry, spokesman for Priorities USA Action, July 15, 2012

Written by: Louis Jacobson
Researched by: Louis Jacobson
Edited by: Bill Adair

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