But at least one of the companies mentioned in the ad became profitable thanks to government subsidies and a special tax assessed on local residents.
In 1994, Bain invested $18.2 million in Steel Dynamics, becoming the largest domestic equity holder in the company. Five years later, it sold its stake for $104 million, walking away with $85 million profit. In the intervening years, the state of Indiana and DeKalb County pledged $37 million in subsidies and grants for a new Steel Dynamics mill. As the Los Angeles Times reports:
The county promised $23.4 million in property tax abatements and tax increment finance bonds, as well as a new income tax to generate economic development funds. The latter was required by the state, which shelled out another $13.6 million in tax credits, energy grants, workforce training and funds for roads.
A new quarter-percent tax on DeKalb County residents financed infrastructure improvements such as roads and railroad exchanges that benefited Steel Dynamics.
Indeed, while Romney and conservative allies have pilloried GOP candidates Newt Gingrich and Rick Perry for “attacking free enterprise,” even Romney has spoken out against the kind of so-called “corporate welfare” and “crony capitalism” that Steel Dynamics engaged in.
Romney regularly uses this line of attack against President Obama, saying in New Hampshire last week, “Capitalism, free enterprise works. Crony capitalism does not. This president has engaged and is engaging in crony capitalism.” But as the LA Times noted, “The story of Bain and Steel Dynamics illustrates how Romney, during his business career, made avid use of public-private partnerships, something that many conservatives consider to be ‘corporate welfare.’”
It’s also worth noting that the new ad defending Romney and Bain makes no mention of the 100,000 jobs the company supposedly created — a figured the campaign has often touted without being able to provide supporting evidence. A number of fact-checking outlets have cast doubt on the figure, though it’s unclear if the campaign is backing off the claim or chose to leave it out of the new ad for a different reason.