The Boston Globe has revealed information about lengthy testimony offered by Mitt Romney during a lawsuit by the ex-wife of Tom Stemberg, a principle in Staples. Staples has been described by Romney as one of the “Great American Success Stories”, and Stemberg was one of the people who appeared and praised Romney at the RNC for his terrific business acumen. The question everyone in America should be asking is, “Why is this relevant to the 2012 election?”
Here are the facts as reported by the Globe:
1. Tom Stemberg and his wife, Maureen Sullivan Stemberg divorced in 1988.
2. As part of the divorce settlement in the divorce, stock in Staples was transferred to Ms. Stemberg. As part of the divorce settlement it was important to set a value on the stock to determine if Ms. Stemberg was given her share of the joint property.
3. The stock in Staples she was given was a special type of stock created just for this purpose and identified as “Class D” stock. It is not clear what the unique provisions of that stock were, but it is likely that there were various restrictions placed on that stock making it less valuable than the ordinary stock.
4. The stock given to Ms. Stemberg at the time of the divorce was valued at $2.48 per share, and that valuation was supported by Romney’s testimony.
5. Ms. Stemberg sold 175,000 shares of the stock immediately after the divorce became final in order to pay the mortgage on the home. It is not clear who the buyer was of that stock, since the company was not a publically traded company.
6. In April of 1989 Staples went public with an initial offering price of $19.00 per share, and on the first day of trading the stock closed at $22.50 per share.
7. In 1990 Ms. Stemberg sued her ex-husband, claiming that he had not disclosed the true value of the Staples stock, and that she would not have sold her stock for 1/10 th of the price that she could have received if she had held the stock and sold it after the public offering.
8. According to the Globe Romney testified that there was “little indication that the stock would skyrocket.”
The relevant issue in the case brought by Ms. Stemberg was whether she had been misled in the property settlement regarding the value of the class D stock. However the issue for our consideration is whether Romney testified under oath truthfully in that trial. Of course he was called by the attorney for Mr. Stemberg, so he purpose in being called as a witness to testify was to bolster the position of Mr. Stemberg that the stock was of a speculative value at the time of the divorce settlement. The real relevance of Romney’s testimony is unclear without more information. It seems unlikely that Romney truly valued to stock at such a low price as he invested in Staples through Bain. Because the IPO was completed with a short time after the divorce it is likely that Romney and Stemberg were touting the stock to the public within a short time after the transfer to Ms. Stemberg. Certainly if the stock was offered to the public at $19.00 per share in April of 1989, Romney through Bain would have necessarily indicated in the IPO that the stock was worth the stated price of $19.00 per share. Moreover, in order for the company to go public in April, Romney and Stemberg would have met with investment bankers months before to prepare for the IPO, and they obviously planned to go public months or years before that. It seems unlikely that the company would magically go from having a value of roughly $2.00 per share to $20.00 per share in less than a year, and Romney and Stemberg would not have anticipated it. If the value had been estimated to be 10-15 Dollars per share, and there was an increase in value at the time of the IPO, that would have been more believable.
We have seen Romne “flip-flop” on political issues when it was convenient. We have seen him “Lying for the Lord.” Now it appears we have seen him show “bias for a buddy” when testifying under oath, even if it means causing millions of dollars in harm to a woman.