Retroactive

Romney Campaign Crisis Management

There is an old truism in politics that holds “when you’re explaining, you’re losing.”

By that standard, given the Romney camp’s stumbling efforts over the last week to get together a plausible story on when the candidate really left his private equity firm, it’s been a loser of a few days for the GOP nominee.

But, as potentially important as that not very effective crisis management has been, the candidate’s greatest vulnerability is still contained in the documents we’re never likely to see – Mitt Romney’s tax returns. Two things are at play in the tax return decision and each provides real insight into both the candidate’s character and decision making and how he might perform should he get to the Oval Office.

Romney’s fundamental qualification for the presidency, by his own reckoning, is his extensive business experience at the private equity firm Bain Capital. He made a lot of money for himself and his investors at Bain and, according to his supporters, practiced modern capitalism just the way Adam Smith intended. He also, it seems clear, did many things to limit his tax liability. There is no harm in that, unless you decide to run for the job of leader of the free world and it becomes common knowledge that off-shore accounts in the Cayman Islands and banking relationships in Switzerland were part of your personal investment strategy.

According to accounts from those who know him well, Romney operates like the CEO he once was. He undertakes analysis, looks at the numbers and then he decides. Here’s a bet that candidate Romney, back when he was planning to seek the GOP nomination, came to the irrevocable decision that his tax returns would not – never, no way, nada – be released. Romney’s decision on his tax returns turned on the fact, I’m betting again, that he simply couldn’t explain, or more likely didn’t want to explain, what the returns contain. After all, it’s the rare CEO who considers his income or tax liability to be anyone’s business but his own.

Normally, early in a presidential campaign, the political guys on the campaign team survey all the candidate’s weak spots and develop a strategy to deal with each. The conventional political wisdom, under the first rule of crisis management, would have had Romney quietly dump all his returns back to his Massachusetts governorship days well in advance of the hand-to-hand combat stage of the campaign. Bill Clinton perfected the “document dump,” a massive release of information, often on a Friday before a holiday weekend, that got the whole mess out at once with surrogates teed up to explain what all the information meant.

Again, I’m guessing, but I’d bet that Romney’s campaign never had a serious discussion about releasing his tax returns. Rather CEO-like Romney just told his advisers what he had decided. End of discussion. Now, months later, the no-release-of-tax-returns issue is coming back to haunt the campaign big time.

Here’s Romney “explaining” that decision to Fox News over the weekend: “The Obama people keep on wanting more and more and more – more things to pick through, more things for their opposition research to try to make a mountain out of, and to distort, and to be dishonest about. … [I]f we want to talk about transparency, the real issue is: Why has this president used his presidential power, and executive privilege, to keep the information about the Fast and Furious program from being explained to the American people?”

Trouble is Romney’s explanation and his efforts to change the subject aren’t even washing with his supporters.

“He should release the tax returns tomorrow. It’s crazy,” GOP analyst William Kristol said on Sunday. “You gotta release six, eight, 10 years of back tax returns. Take the hit for a day or two.”

But, of course, Romney won’t – or can’t – take the hit for a day or two, because the returns will be both complicated and voluminous. Releasing them will provide a vast amount of detailed information about Romney’s business and investment decisions. Simply put, he decided months ago he couldn’t – and wouldn’t – go there.

Now, consider the two things the candidate’s decision tells us about Romney the candidate and the prospective Commander-in-Chief. The first is about managing risk and the second about understanding expectations.

It was completely predictable that a candidate reportedly worth $250 million would have to deal with serious questions about his finances and investments on the road to the White House. Romney’s strategy, to the extent there is one, has been to deny that his tax returns, investments and Bain Capital decisions are anyone’s business. But that stance ignores the reality of modern politics. There is no cone of silence around such things, particularly when you are likely the most well-to-do guy seeking the Oval Office in modern times and doing so by making the argument that your business career better prepares you for the job that the other guy.

But Romney failed to fully appreciate that proper handling of his tax returns is simply a matter of managing political risk and, as a result, the candidate hasn’t managed his own risk very adroitly.

The second issue is about expectations. After profound and lingering questions about Bill Clinton’s finances – remember Whitewater the failed Arkansas land deal - there is an expectation among the political class in America, as well as the political media, that a candidate for president is an open book on issues relating to personal finance.

Fifty years ago Lyndon Johnson might have been able to get away with dodging questions about the vast wealth he accumulated from radio stations and other investments, but those days are long over. The modern expectation is, as it should be, that a candidate for high public office is transparent about personal finances.

How a person handles their investments and tax liability is, after all, a window into bigger questions about character and judgement and Mitt Romney has the blinds drawn tight.

The fact that he and his advisers have so mishandled the “risk” associated with the tax return issue and so misread the expectations about transparency must be shaking many of his friends and supporters.

Romney adviser Ed Gillespie, a GOP smart guy of the first order, over the weekend was trying to manage the fallout from Romney’s retirement date at Bain Capital when he suggested that Romney had “retired retroactively” from his CEO job back in 1999. That terminology, once the snickers die down, may ensure Gillespie a permanent place in the Political Spin Hall of Fame.

But here’s another bet: What Ed Gillespie and the rest of Romney’s political team would really like to retroactively revisit is the tax return question, but the boss won’t – or can’t – go there. So, the explaining goes on another day.

Tomorrow, what Barack Obama’s admissions about the failures of his first term say about his character and judgment.

 

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