The Washington Post had an article about the political attack against Mitt Romney because of his involvement and connection to a company that paid a multimillion-dollar fine for Medicare fraud. The clip is labeled “Mitt’s Blood Money.” It looks at the acquisition by Romney’s private equity firm, Bain Capital, of the medical testing company Damon Corp. which was fined more than $35 million and eventually went bankrupt.
Another article from The Washington Post discusses the facts concerning Damon Clinical Laboratories. The article states that attack "is relevant because 1) Romney was a director of the firm while the fraud took place; 2) the fraud appears to have ended only after Bain sold the firm; 3) Romney earned nearly $500,000 from the sale of Damon; and 4) Romney’s statements about what he knew and when he knew it have been inconsistent".
In 1996, Damon had agreed to pay a $35.3 million criminal fine — one of the largest corporate fines in U.S. history — and an additional $83.7 million to settle whistle-blower lawsuits. The company admitted that from 1988 to 1993 it had bolstered its earnings by submitting false claims to Medicare and other federal programs. Essentially, the firm billed for blood tests that doctors had not ordered.
Romney was on the board of directors, which had a fiduciary duty to oversee company executives. The film correctly notes how Romney’s story changed about his knowledge of the investigation. It also airs of clip of him denying at a GOP debate this month — to Gingrich — that Bain Capital did any Medicare business. It ends with a plea to report Medicare fraud to the government.
"The Damon case is certainly a valid subject for scrutiny of Romney’s business record. He was on the company’s board at the time criminal fraud was taking place, and his statements about his knowledge of the federal investigation have been inconsistent."
I wonder how this will play in Florida?