The newest attack on Mitt Romney by a Newt Gingrich-supporting Super PAC is a nearly 8-minute documentary entitled “Blood Money” which purports to describe Mitt Romney’s profiting from Medicare fraud perpetrated by Damon Corporation during the time that Romney was on its board of directors, representing Bain Capital’s majority stake in the company.
In fact, the PAC has made a website just to discuss the issue: mittsbloodmoney.com
One of the nation’s largest public sector unions, AFSCME, has spent about a million dollars in Florida running an ad with a similar message.
Separate from the issue of what the revival of the Damon Corp. story might mean for Romney’s fortunes, the fact that AFSCME is spending their money during the primary election instead of during the general election implies that they (as major supporters of Barack Obama) would much rather run against Gingrich than against Romney. DNC Chairwoman Debbie Wasserman “Who is more annoying than I am?” Schultz is sending out a memo with the same message, and other liberal and groups are running anti-Romney radio ads in Florida.
The Damon Corp. story certainly reads like — and probably is — an episode of corporate greed and fraud. It’s an old story, which Massachusetts voters have heard before, but most Americans haven’t. The reason that it could be a problem for Romney is that despite the fact that neither he nor Bain was ever charged with wrongdoing in the case, the coming narrative is that Romney has given two different answers regarding his involvement — which Obama supporters will try to use to mask the basic facts of the case. In one answer, he discovered that the company was overbilling Medicare for blood tests and called for an investigation. Some reports say that prosecutors gave credit for ending the fraud to Corning Inc. which purchased Damon in 1993. But ABC News notes, in the most balanced report I’ve found on the topic, that “Romney and the Damon board did, however, contact Damon’s lawyers, seek their counsel, and change Damon’s policies.” In another answer, Romney said he was unaware of any criminal investigation into the matter. To be sure, those two claims are not mutually exclusive; Romney could easily have both asked for an internal investigation and been unaware of a federal investigation.
The real question here is whether anybody cares about a “scandal” which occurred two decades ago. It’s potentially damaging to Romney by going after his aura of being honest and upstanding. And that’s just what the Democrats will try to do, especially trying to tie Romney to a Medicare scandal which might impact Romney’s appeal to older voters. Romney will likely say “If I had done anything wrong, don’t you think I or my firm would have been charged with something? Furthermore, here are copies of the documents I had sent to the company’s lawyers to ask them to investigate this issue, and we implemented all the changes the lawyers instructed.”
ABC News believes that “We can expect Romney’s opponents to keep surfacing one key number, however: the $473,000 Romney reportedly gained from the sale of Damon Corp.” I’m skeptical of that, or at least of the effectiveness of that tactic. After people have heard repeatedly that Romney is worth a quarter billion dollars, and that he’s made $40 million just in the last two years, they may be numb to a number which ends with the word “thousand” when it comes to thinking about Romney.
It will be interesting to see if this newest attack on Romney gains any traction. His ability to defuse the Damon bomb will say a lot about his ability to take on Barack Obama and the David Axelrod-led attack machine in a general election. One point Romney should make (with a smile) is that “Obama and his friends must really be afraid of me to work to help Newt Gingrich with this particular smear campaign.”