"New Romney Video Touts Steel Mill That Benefited From Government Largesse"
Seeking to combat charges from the Obama campaign that Bain Capital extracted value from companies it purchased by firing employees and cutting benefits, Mitt Romney’s released a web video today profiling Steel Dynamics, one of the companies that Bain invested in.
The ad implies that the plant would not have been built without Romney’s assistance. Steele Dynamics “almost never got started,” the narrator says. “When others shied away, Mitt Romney’s private-sector leadership team stepped in.”
But the Fort Wayne Journal Gazette reported at the time (via Nexis), that Bain was just one of eight financiers for the project — hardly the lone white knight:
Financing to build the plant is coming from the Mellon Bank in Pittsburgh, NBD Bank, Fort Wayne National Bank, Lincoln National Life Insurance Co., the Bank of Japan, the Bank of Germany and the Paris Bank. Capital and Bain Capital are also investors.
And while the video touts Romney’s “private-sector” team, the company was successful thanks in part to big government subsidies and grants — $37 million from the state of Indiana and DeKalb County. And as the Los Angeles Times reported in January of this year, the county even raised taxes on residents to help fund the mill:
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 attacked President Obama for employing “corporate welfare” and “crony capitalism” to create green jobs, Romney-backed Steel Dynamics enjoyed government largesse on the local level. 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.’”
Bain invested $18.2 million in Steel Dynamics in 1994. Five years later, it sold its stake for $104 million, walking away with $85 million profit.