October 25, 2012
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Editor's Update: The Boston Globe reports: "Mitt Romney testified under oath in 1991 that the ex-wife of Staples founder Tom Stemberg got a fair deal in the couple’s 1988 divorce, even though the company shares Maureen Sullivan Stemberg received were valued at a tenth of Staples’ stock price on the day of its initial public offering only a year later. At the time the Stembergs split, Romney suggested, there was little indication that Staples’ value would soon skyrocket. Romney’s testimony in a post-divorce lawsuit brought in 1990 by Sullivan Stemberg was unsealed on Thursday in Norfolk Probate and Family Court at the Globe’s request. Sullivan Stemberg sued unsuccessfully to amend the couple’s financial agreement after Staples went public in 1989 and closed its first day of trading at $22.50 per share, 10 times the value she had received."
According to the Globe, Sullivan Stemberg sold 175,000 shares of Staples stock at $2.25 per share, and sold 80,000 shares at $2.48 a few months later. “In my opinion, that’s a good price to sell the securities at,” Romney testified. "But on April 28, 1989, barely a year after Sullivan Stemberg sold more than half of her shares on the premise that they were worth less than $2.50 apiece, the company made its initial public offering at $19 per share and ended its first day at $22.50," the Globe reports.
The famed feminist lawyer Gloria Allred has said that Mitt Romney lied in the divorce proceedings between her client, Maureen Sullivan Stemberg, and her husband, Tom, in order to protect the financial wealth of the former CEO of Staples. If the allegations are true, the revelation could be yet another blow to the GOP during an election cycle in which many of the candidates have played old-boy’s-club politics and demonstrated disregard and sometimes outright scorn for women.
The case in question began more than 20 years ago, when Mitt Romney--then hedge funder at Bain Capital--testified in the divorce proceedings on behalf of Staples-CEO Tom Stemberg, at the time Romney’s close friend and business partner. The divorce hearings occurred shortly before Staples--which has become the GOP’s misleading poster child for Bain Capital’s financial track record--went public, earning Stemberg and Bain Capital millions.
In the testimony, however, Romney allegedly lied about the future of the company, saying it was “overvalued” and that Stemberg was a “dreamer” for thinking the company could grow large. As a result, Maureen received very little in the divorce settlement--only to learn that her husband and his cohort Mitt Romney quickly turned around and cashed in their own stocks in Staples for a small fortune right after the divorce was finalized.
So far, these allegations have little factual backing, giving the controversy a speculatory nature that feels a little like a media stunt, but is also befitting (in the sweet ironic sense) of the vulture capitalist candidate, whose million-dollar fortune was built on risky, speculation-based leveraged buy-outs.
Maureen Sullivan Stemberg’s laywer, Gloria Allred, has a history of representing female defendants against high-powered male politician in cases that have often become death blows to the man’s campaign. She has been a legal advocate for women’s rights and a fierce opponent of gender discrimination for decades, fighting against men-only social clubs, anti-gay marriage legislation, abusive employers, and a slew of philandering and sexually abusive male celebrities. Recently, Allred was involved in a suit against Republican presidential candidate Herman Cain for sexual harassment and another against California gubernatorial hopeful Meg Whitman for workplace discrimination--both media-frenzied cases that sank the candidates’ campaigns.
Both Maureen and Romney’s lawyer have said that neither objects to making the sealed testimony public.
‘‘This is a decades-old divorce case in which Mitt Romney provided testimony as to the value of a company,’’ Jones said. ‘‘He has no objection to letting the public see that testimony.’’
Yet, the revelation could come at an inconvenient moment for the Romney campaign, which is gaining momentum in the final stretch of the election season even as his popularity among female voters continues to falter. Although this testimony has little to do with Romney’s shifting platforms on issues like workplace equality and abortion access, a false testimony intended to protect a male business buddy at the expense of financial transparency and the wife’s future could be a devastating insight into the candidate’s character that could particularly deter undecided female voters.
Stay tuned as AlterNet analyzes the now-unsealed testimony.
In the meantime, in the development of another October surprise, Stephen Colbert has issued a counter-offer to Donald Trump’s extortionist offer to Obama, saying that he’ll donate $1 million to a charity of Trump’s choosing if the media-mongering businessman will allow Colbert to dip his testicles into Trump’s mouth.