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Mitt Romney, Corporate Raider

December 13, 2011
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“…Romney has tempered his claims about the jobs he created at Bain over the years. In his unsuccessful 1994 Senate campaign, Romney said he helped create 10,000 jobs, which was challenged by his opponents. In his campaign for his party’s 2012 nomination, Romney has avoided such specific claims. “Sometimes I was successful and helped create jobs, other times I was not,” Romney said in announcing his candidacy on June 2 in Stratham, New Hampshire….”

When I first started this piece, it was to prove that Newt was right and the far right was wrong.  Well, I delved deeper and deeper into the subject, and do not like what I have found.  Newt is very very very very very right.  First, we do not know how many jobs Mitt created.  The stats are not there.  The jobs that were there were often created overseas as lower paying jobs.  The URLs are scrubbed.  Sources are wiped, and something is really dirty here.

  1. Why did Bain get away with buying Clear Channel in 2007 or so if Mitt was running for POTUS.  Just his previous connection to the company should have prevented the acquisition of the company that syndicates Rush Limbaugh.
  2. Is there a connection between Bain Capital and China as in jobs, etc?  I bring up Bain capital because, contrary to the discussion that Romney left years ago, he still has ties to the company, including a major million buck donation to a PAC that was there one day and gone the next.
  3. Why is Romney not being questioned as one of the inventors of the very practices that helped crash our economy?  Not only was he a top corporate raider, but he invented the process.
  4. Is the Bain – China connection relevant?
  5. Is Bain – Iran relevant?
  6. There is no actual number accounting for the jobs created or slashed while Romney was at Bain.  It appears only the AFL-CIO seems to be trying to find the numbers, and that was 4 years ago.
  7. What is Romney’s real record at Bain Capital?  We only know what we are told.

Every once in awhile you run into a fascinating little story, online, where sources have been scrubbed, fake sites propped up, and aggregators. All I did was Google “Bain Capital job creation”. What I found was misleading, scrubbed sites, URL no longer there, and numerous attempts to prop an article up, and Google bomb something unfavorable, pushing the piece far lower in a Google search.

Bloomberg

The WPost article is critical to this discussion. I suspect this is what Newt was using, not the LA Times puff–peace. This is now making me quite suspicious. I’ve heard, over the years, that Romney helped only himself and his partners. That jobs were lost, businesses ruined and lives destroyed. Problem is, I can only find what is basically a fairly favorable article. If you listen to FOX, Romney is a saint and Gingrich is a socialist.

“…Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. “They were just trying to milk as much out of us as they could,” he said.

Mr. Mowrey, now 54, quit. Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. “It created a lot of stress,” said Mr. Shoemaker, 59, who had earned more than $80,000 a year.

For some, the emotional effects of the layoffs outweighed the financial repercussions. Soon after Dade bought the DuPont unit, it closed a plant in Puerto Rico; all but a few of its nearly 300 workers were laid off…”

Once upon a time, Mitt Romney was considered a corporate raider. He had a very bad reputation as a job slasher. Today, our libertarian fawning pundits consider that an asset. So, when Newt Gingrich made a remark about Romney’s slash-burn tactics, Newt is now being accused of going to the left. From what I can tell, it was about making money, which is fine. It was NOT about creating jobs.

Evidently the dirty little secret we need to investigate is the number of AMERICAN jobs lost and created.

NY Times

“…”When I listen to Mitt Romney these days, he talks about creating jobs. My experience at Dade during those Bain Capital years was that it was strictly an investment, not to create jobs,” said Michael Rumbin, a vice president of technology management at Dade during the Bain years whose position was eliminated in 2000.

“No one came from Bain and said, ‘How can we hire more people?’ ” Rumbin said. “It was, ‘How do we turn our investment around and make a lot of money?’ Which they did.”…

Behind the Buyouts

They are praising the way Bain would go in, buy a company, save jobs, and (cue the angelic music) everyone would live happily after after. They made a lot of money, and a lot of people lost their jobs. The worst of it, was the way Bain created a way of leveraging a company’s debt.

LA Times

Romney talks a good game about Bain being about job creation. It was not.

“...Bain managers said their mission was clear. “I never thought of what I do for a living as job creation,” said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. “The primary goal of private equity is to create wealth for your investors.”…”

Weekly Standard

“…That was true in the case of GS Industries, the 10th-biggest Bain investment in the Romney years. Bain formed GSI in the early 1990s by spending $24 million to acquire and merge steel companies with plants in Missouri, South Carolina and other states.

Company managers cut jobs and benefits almost immediately. Meanwhile, Bain and other investors received management fees from GSI and a $65-million dividend in the first years after the acquisition, according to interviews with company employees.

In 1999, as economic challenges mounted, GSI sought a federal loan guarantee intended to help steel companies compete internationally. The loan deal was approved, but in 2001, before it could be used, the company went bankrupt, two years after Romney left Bain.

More than 700 workers were fired, losing not only their jobs but health insurance, severance and a chunk of their pension benefits. GSI retirees also lost their health insurance and other benefits. Bain partners received about $50 million on their initial investment, a 100% gain….”

The Pink Flamingo has been saying, for months, that Mitt is the very person the Obama people want to run against. There are some economic dealings here that cannot stand the light of day. PACs are being opened/closed with huge checks being donated to his campaign, then they close up. The money is coming from Bain associates, quite often.

“…When this happens, expect the Obama campaign to absolutely trash Romney’s work at Bain Capital. Every TV ad will smash the firm as being “soulless,” “greedy,” and “cruel.” They will be accused of laying off thousands of hardworking middle Americans and shipping jobs overseas. In short, by election day 2012, the term “bain capital” will be in the same level of infamy as goldman sachs and lehman brothers…”

Google Search "Bain Capital American Jobs Lost"

I have spent 90 minutes Googling “Bain Capital American Jobs Lost” and “Saved”.  The numbers are NOT there.  It has been scrubbed.  I had to do a specific Google, from 1/1/2007 to 12/31/2008 to come up with some additional sources.

At least I solved the URL mystery. Evidently Bain owns someone who owns someone who owns GoDaddy. This

"Bain Capital American Jobs Lost"

TARP?

Union Leader

“…Equally generous have been the banking, legal, and advisory firms that Bain Capital uses for its large venture-capital and leveraged-buyout (LBO) deals. Bain has remained loyal to a small number of elite firms for these transactions, including Goldman Sachs, Merrill Lynch, and Kirkland & Ellis. Employees of those three companies and their spouses account for well over another half-million dollars in Romney’s coffers. Romney is hardly unique in that regard — Barack Obama has received more than a half-million from Goldman Sachs and Lehman Brothers — but when it comes to successfully soliciting funds from Wall Street, Romney has out-raised his more-politically-powerful competition, including McCain, Rudy Giuliani, and Hillary Clinton.

It’s almost as if by dint of knowing the secret financial-world handshake, Romney has been able to open a veritable contribution pipeline from the wallets of Masters of the Universe to his own war chest. And, unlike his rivals, Romney has also been able to tap into a network of executives whose current or former companies were owned or funded by Bain Capital throughout the years. This network includes many companies that Bain Capital bought or funded recently — well after Romney severed his official ties with Bain.

That speaks to the faith people have in Romney and his company, says long-time Romney colleague Geoffrey Rehnert. Rehnert helped found Bain Capital and is now co-CEO at Audax Group, a Bain-funded investment company that Rehnert started in 1999, when Romney left to head up the 2002 Salt Lake Winter Olympics.

“I suspect that Mitt is getting lots of support from the people who enjoyed financial success while working with him,” writes Rehnert in an email to the Phoenix. “While many may not share his views on certain issues, I believe that Mitt has created a lot of loyalty among the people with whom he did business.”

Romney helped build this loyalty, according to some, by being particularly generous to those now supporting him the most.

One such example is Meg Whitman, CEO of eBay — and one of the Romney campaign’s national finance chairs. Whitman worked with Romney at Bain & Company before going to work for Disney and then Keds. In 1995, when Bain Capital bought florist chain FTD, Romney installed Whitman as CEO. She left after just 18 months, with stocks, salary, and bonuses worth well more than a million dollars — even though, as she has conceded in interviews, she did not come close to successfully putting the company on the right track….”

WPost

No, Romney DOES NOT own Bain Capital now.  He allegedly has a blind trust.  But, this is just all too messy.

Bloomberg

“...While indicating he would continue to be involved as a limited partner with Bain Capital, Romney said at the press conference: “I didn’t want [ Bain Capital managing directors] to wonder whether I [was] going to be coming back to take over again … I didn’t want them to wonder whether .. . I was going to show up at the front door and say, ‘O.K. everybody, move over one office, I’m here again.’”

Last month, the Romney campaign filed a financial disclosure form that described Romney’s separation from Bain Capital as such: “As part of his retirement from Bain Capital, he entered into a non-compete, non-hire agreement running through February 11, 2009 which provides him with a passive, declining profit share that is fixed by contract in certain Bain Capital entities, and the right to make passive investments in certain Bain Capital investments.”

A source says this arrangement refers to Romney’s share of the carried interest in Bain Capital entities. (It is unclear what is identified in a footnote to the Romney financial disclosure, which says that the “Ann D. Romney Blind Trust” has a right to receive profits until February 2009 from an entity called “ Bain Capital ”).

The campaign announcement took pains to note that the former governor has since 2003 not had “any control over the assets acquired or disposed of”.

Certainly, Romney has continued to benefit from his passive affiliation with Bain Capital. But he left money on the table. Allowing that, until fairly recently, the management company of a private equity firm was not deemed to be a thing of great value, had Romney retained ownership of Bain Capital until today, this asset could have been worth $10 billion or more, using the current (albeit fluctuating) valuations of Fortress and Blackstone as proxies. The Romney campaign has disclosed that the candidate’s net worth is somewhere between $190 million and $250 million….”

Much of the information I have found is dated.  Some comes from fringe sites.  I must admit I am biased in Newt’s favor.  But – what I found was a bit surprising.  There is no intellectually honest way the right can even claim that Newt is to the left of Mitt on this one.  There is no real list of the jobs Romney created via Bain.  There is no information about the companies I am told he shut down and moved out of the country for cheaper jobs.  We do know that, while he was in charge, Americans lost jobs, and people in foreign countries gained them at the expense of American citizens.

This is considered good corporate business.  The right is currently involved in an unrequited love affair with corporate America over the small, independent business.  I have a funny feeling if we were to add up the jobs lost to cheaper workers outside the US, our unemployment problems might not be near as bleak.  Sure, it’s good policy for a company.  It is NOT good policy for America.

The Pink Flamingo is not a lover of large corporations.  If they are “persons” as Mitt Romney claims, then they are immoral, vicious, soulless entities who are like vampires, sucking the life out of this nation.  They have a right to make money.  I simply think they are a loose screw when it comes to ethics, morality, and honor.  Nothing matters but the almighty dollar.  Until conservatives realize there are things more important than the almighty dollar, we are doomed to a lower standard of living.  If you can’t figure out why, then I feel quite sorry for you.

 

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