Anti-Romney PAC Ad: A 20 Million Dollar Lie

It only took a matter of hours to determine that a $20 million ad campaign from the pro-Obama Priorities USA PAC, which shows Joe Soptic, a former GST Steel (GS) worker and Obama supporter blaming Mitt Romney and Bain Capital for his wife's death from cancer, is complete and total fraud. It wasn't difficult and timelines certainly don't lie. Here's the real story.

In the 60-second campaign ad, Soptic makes the following accusation: "When Mitt Romney and Bain closed the plant, I lost my health care and my family lost their health care. And a short time after that my wife became ill.”

Soptic goes on to say: "And then one day she became ill and I took her up to the Jackson County Hospital and admitted her for pneumonia and that’s when they found the cancer and by then it was stage four. It was — there was nothing they could do for her. And she passed away in 22 days. ... I do not think Mitt Romney realizes what he’s done to anyone. And furthermore, I do not think Mitt Romney is concerned.” There's one huge problem with Soptic's story though. His wife, Ilyona Soptic, was diagnosed with cancer and died in 2006, a full five years after GS went out of business in February of 2001. But the lies don't end there. Actually, there are multiple layers of dishonesty in Soptic's story. According to liberal CNN, Mrs. Soptic "received her primary insurance through her employer – a local thrift store called Savers – and retained it even after his layoff. Soptic’s policy through GST Steel was her secondary coverage." And CNN goes on to report that Soptic's wife, by Soptic's own admission, retained her insurance coverage until 2002-3:  "Sometime in 2002 or 2003, Mr. Soptic says his wife injured her rotator cuff and was forced to leave her job. As a result she lost her health insurance coverage." Moreover, according to a report published by Reuters in January of 2012, after GS shut its doors in 2001, Soptic was able to secure "a school janitor job, with a starting salary of $24,000." While the money is certainly nothing to write home about, Soptic also retained his 401K plan (which he claims he eventually liquidated after his wife's death to pay her medical bills) and his pension, less $283/month, a loss that Reuters said was only equal to 22% of his pension.  The bottom line is that between Soptic's work as a janitor, Mrs. Soptics job at the thrift store and the amount of money left in Mr. Soptic's pension, the Soptics were not destitute; and while financial hardship is not something to be casually dismissed, after a certain point, it becomes both laughable and dishonest to blame other people for one's misfortunes. As for the role of Mitt Romney and Bain in this saga, an honest examination of the timeline of events is in order for an honest assessment. Back in 1993, GS's predecessor Armco had fallen on hard times and sold its Kansas City, Missouri plant to Bain Capitol and a group of investors courted by Bain. Even Reuters conceded that it "was a gamble. The old mill, renamed GS Technologies, needed expensive updating, and demand for its products was susceptible to cycles in the mining industry and commodities markets." Reuters gives even more particulars: "The risks were obvious. The mill's equipment was out of date and it faced stiff competition from Nucor Corp, which also made grinding balls. Nevertheless, Bain and its partners decided to buy the mill for $75 million. Bain put up about $8 million to gain majority control of the company... as part of the deal, Armco agreed to cover employee pension obligations if the plant closed within five years - a $120 million liability, according to the Kansas City Business Journal." In 1994, GS then issued $125 million in bonds to pay for the necessary renovations and paid a $36.1 million dividend to Bain. A year later, Bain merged GS with another wire rod maker in Georgetown, South Carolina, to form one of the largest mini-mill steel producers in the U.S. The new company issued another $125 million in bonds to pay for the merger and Bain, reinvesting $16.5 million of its earlier dividend. While detractors claim that Bain engaged in what is commonly called a "bust-out" by loading the company down with debt to reap financial rewards, the previous paragraphs paint a somewhat different picture, at least for the years of 1994-95. While Bain reaped $36.1 million in dividends, Bain also put $24.5 million into GS during the same period. $11.6 million isn't "chump change," but, in all fairness, Bain's actions don't line-up with the "bust-out" theory. In actuality, with the facilities upgraded and an influx of debt, Bain was looking at taking GS public with an IPO that would have reaped them much more substantial rewards down the road. Then, in 1997 (four years later, it should be noted), the union called a strike. Reuters again: "[W]ith Armco's [five year] pension guarantees set to expire in one year, the United Steelworkers local at the Kansas City plant was worried that GS was not setting aside enough money to cover pension obligations and other benefits in the event of a shutdown." The union strike, in combination with cheap imports coming out of an emerging Asia, did its damage. The IPO was not to materialize and even as GS stayed in business, scores of steel companies were going belly up. Then, in 1999, Romney left the day-to-day management duties at Bain to help "salvage" the 2000 Olympics. He remained on the books as CEO until 2002. Bain did release a statement that was published by various other media outlets which read: "Mitt Romney left Bain Capital in February 1999 to run the Olympics and has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure. Due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999." GS, in the meantime, limped along for another 4 years after the settlement of the 1997 strike by the union and eventually filed for bankruptcy on February 7, 2001. It's time for people to be fair when it comes to Romney and Bain's role in this saga. Bain and its investors maintained a failing company for eight years. By all rights, it is entirely possible that Soptic should have lost his job in 1993, instead of 2001. Additionally, one could just as readily blame the union or competition from Asian markets for the company's downfall. Blame aside however, is Romney to be blamed for a job that was lost 2 years after he left Bain and a tragic death that occurred 7 years after he left Bain and 5 years after GS went belly up? It's a stretch; even for a man still grieving over the loss of a loved-one that occurred 6 years ago. CommentaryMagazine.com perhaps provides the fairest epithet: "Soptic isn’t a figure the GOP will have an easy time responding to, because his story is deeply personal and sad. But Priorities USA deserves all the criticism it’s getting for exploiting this story to launch a misleading attack on Romney. To insinuate that Romney was responsible for the death of Soptic’s wife seven years after he left Bain and five years after GST Steel shut its doors is a terrible slander, even by Priority USA’s usual standards."