Furthermore, in 2007, the Boston Globe (via the Deseret News) reported on Governor Romney's private equity career, including his involvement with a company that had its ethical challenge, Bain Capital's 1989 purchase of Damon Corp., a Needham medical testing firm that later pleaded guilty to defrauding the federal government of $25 million and paid a record $119 million fine.
Romney sat on Damon's board. During Romney's tenure, Damon executives submitted bills to the government for millions of unnecessary blood tests. Romney and other board members were never implicated.
More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O'Brien accused him of lax oversight at Damon and failing to report the fraud.
Romney replied that he had helped uncover the illegal activity at Damon, asking the board's lawyers to investigate. As a result, he said, the board took 'corrective action' before selling the company in 1993 to Corning Inc.
But court records suggest that the Damon executives' scheme continued throughout Bain's ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation. Bain, meanwhile, tripled its investment. (Emphasis mine.)
Romney personally reaped $473,000.
Thus, Governor Romney was on the board of a device company, albeit many years prior to when he became a presidential candidate. While he was on the board, the company allegedly committed unethical actions.
Yes, it stopped during Corning's ownership.
To be fair, the whole picture isn't that clear.
First, you should know that Corning doesn't have a perfectly clean record. Corning's lab subsidiaries MetPath and Metwest paid a $39.8 million dollar fine in 1993 for unnecessary blood tests. Corning paid $8.6 million in 1995 for its own lab and tests that doctors never ordered. Corning owned Quest Diagnostics, which paid $6.8 million the same year for tests doctors never ordered (yeah, *that* Quest, which Corning spun off into a private company). So Corning had some experience with fraud itself.
Damon lost money for three years after being purchased by Bain, due to payments on the debt Bain used for the LBO. But it made $18 million the next year, then Corning bought them.
And I'm almost certain Corning didn't self-report this (I need to go to my office and pull some binders from Fraud and Abuse seminars during this period - this case was covered at several seminars I attended) and clean it up. Damon was caught. That's when Corning cleaned it up.
So let's not paint Corning as completely the good guy in this.
Yes, it stopped during Corning's ownership.
To be fair, the whole picture isn't that clear.
First, you should know that Corning doesn't have a perfectly clean record. Corning's lab subsidiaries MetPath and Metwest paid a $39.8 million dollar fine in 1993 for unnecessary blood tests. Corning paid $8.6 million in 1995 for its own lab and tests that doctors never ordered. Corning owned Quest Diagnostics, which paid $6.8 million the same year for tests doctors never ordered (yeah, *that* Quest, which Corning spun off into a private company). So Corning had some experience with fraud itself.
Damon lost money for three years after being purchased by Bain, due to payments on the debt Bain used for the LBO. But it made $18 million the next year, then Corning bought them.
And I'm almost certain Corning didn't self-report this (I need to go to my office and pull some binders from Fraud and Abuse seminars during this period - this case was covered at several seminars I attended) and clean it up. Damon was caught. That's when Corning cleaned it up.
So let's not paint Corning as completely the good guy in this.