In 1989, Bain Capital purchased controlling interest in Damon Corp., a medical testing company located in Needham, Massachusetts. When Bain sold the company, they made a $12 million profit with approximately $400,000 of that money going personally to Mitt Romney.
During the time Bain held ownership of the company, Mitt Romney was not only the most senior executive at Bain Capitol, he sat on the Board of Directors at Damon.
Damon Corporation later pled guilty to Federal conspiracy charges as a result of tens of millions of dollars in systemic Medicare fraud committed while under Romney’s and Bain’s control. According to federal government prosecutors, Damon was misleading physicians and submitting fraudulent reimbursement claims to Medicare for unnecessary blood tests. Damon was fined over $119 million which was, at the time, the largest criminal healthcare fine in Massachusetts history.
When Romney was seeking the Massachusetts governorship, his Democratic opponent, Shannon O’Brien, accused him of lax oversight while running Damon and failing to report the fraud. Romney responded by saying that he took “corrective action” before selling the company in 1993 to Corning Inc.
Yet Mitt Romney’s statement conflicts with the facts. According to court records, “…the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation.”
Damon Corporation eventually went bankrupt and thousands of workers lost their jobs.
Mitt Romney’s participation in Damon was characterized in 1996 by Corporate Crime Reporter which stated, “As manager and board member of Damon Corp, Mitt Romney sits at the center of one of the top 15 corporate crimes of the 1990′s.”
During the Jan. 23 Republican presidential debate, there was an exchange between Next Gingrich and Romney in which Romney says he never did business with the government. View Romney’s statement below.
