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Stories tagged with “Bain Capital

Election

Former Romney Partner At Bain Makes Case For Outsourcing

Mitt Romney’s former company Bain Capital has a spotted history of investing in companies that offshored jobs overseas to countries like China. At the same time Romney blasts outsourcing on the campaign trail, calling President Obama “outsourcer-in-chief,” his former partners at Bain have defended the practice.

Appearing on MSNBC’s “Up With Chris Hayes,” Romney’s former partner at Bain Capital Edward Conard made the case for outsourcing jobs, which he argues in his book, “Unintended Consequence”:

CONARD: I think the problem with defending it, for Mitt, I’m not speaking for Mitt [...] people look very close at the micro, get their nose close to the paper and say, ah-ha there is a job that was lost and went overseas, and we can speak about Bain. On a macro level we can see 20 million immigrants came into our country, there’s net insourcing, not net outsourcing. We were growing the economy fast enough that we were pulling the employees into the country, more than sending out of the country. Of the 40 million jobs created, 50 percent were created at the highest end of the wage scale, 40 percent of the jobs in the 1980s were at the highest end of the wage scale, so, there was a disproportionate increase at the high end of the wage scale over that, over that period.

Watch the video:

Meanwhile, Romney’s top economic adviser Greg Mankiw has also argued for outsourcing jobs, calling it “a good thing.” As another Bain manager explained, “I never thought of what I do for a living as job creation.” Romney’s role at Bain was to create wealth for his firm, not jobs.

Election

Romney Adviser: Romney Not Responsible For Bain Because He ‘Retired Retroactively’

Mitt Romney and senior campaign advisor Ed Gillespie

Ed Gillespie, a senior campaign advisor for Mitt Romney, appeared on Meet the Press this morning to answer questions about Romney’s tenure at Bain Capital, and unveiled a new excuse for why Romney should not be held responsible for the company’s actions during a time in which he remained CEO and president:

GREGORY: He was still financially linked to Bain. And of course, a lot his fortune is due to his time with Bain. Even when he was on leave, does he stand by the business decisions that were made by the firm he created?

GILLESPIE: He actually retired retroactively at that point. He ended up not going back to the firm after his time in Salt Lake City. So he was actually retired from Bain.

Throughout the primary season until just last week, the Romney campaign stood forcefully by their assertion that Romney “retired” from Bain Capital in February of 1999. But with the release of previously unreported SEC documents last week which suggest that Romney in fact retained the titles of CEO and chairman well into the new century, the Romney campaign has struggled to adequately answer voters’ questions.

Gillespie was also questioned about whether Romney supports the business practice of outsourcing jobs overseas, a favorite tactic of Bain Capital. Gillespie was noncommittal, instead stating that Romney believes businesses should be free to do as they see fit.

Gillespie also tried to paint Romney’s decision to release just two years of tax returns as transparent. “The fact is, Governor Romney has put out already 2010, and will put out 2011 before this election. So, very transparent,” he told Gregory.

Update

Watch video of Ed Gillespie’s remark:


Update

Gillespie made a similar claim on CNN: “He took a leave of absence and in fact, ended up not going back at all and retired retroactively to February 1999 as a result.”

NEWS FLASH

Bain Press Release Claims CEO Romney Is On ‘Part-Time Leave’ To Run Olympics | The Romney campaign has claimed that the former Massachusetts governor cut all ties with Bain Capital when he left to run the 2002 Winter Olympics in February of 1999, but a press release from July of 1999 seems to contradict this account. “Bain Capital CEO W. Mitt Romney” is “currently on a part-time leave of absence to head the Salt Lake City Olympic Committee for the 2002 Games,” the release, uncovered by Daily Kos’ Jed Lewison, states. The document announces the departure of two Bain managing directors. In 1999, Romney himself had stated that he would “stay on as a part-timer with Bain providing input on investment and key personnel decisions.”

Economy

Three Fibs Mitt Romney Tells About His Business Record

On the campaign trail, Mitt Romney repeatedly lies about policy matters. He falsely claims that President Obama is adding regulations at a “staggering rate,” making “ the economy worse” and is constantly apologizing for America. He even claims that his tax plan is not a tax cut for the rich, when it is just that.

But according to Securities and Exchange Commission documents uncovered by the Boston Globe, TPM, and Mother Jones, Romney’s misrepresentations extend beyond partisan policy disagreements. He has lied about his main qualification for seeking the presidency: his own business record:

1) Mitt Romney left Bain Capital later than he claims. Securities and Exchange Commission documents show that Romney remained Bain’s chairman and president, owning 100 percent of Bain as late as 2002, the Boston Globe reports. Romney has contended he left in February 1999 in order to fend off attacks that he is responsible for Bain layoffs or outsourcing.

2) Mitt Romney said he created 100,000 jobs at Bain. But he downgraded that number to “thousands” after even Sarah Palin doubted its veracity. His campaign now admits the number is completely bogus. Romney’s tally did not even begin to include the thousands of layoffs at companies in which Bain invested.

3) Mitt Romney said his business investments aren’t responsible for outsourcing jobs. Romney’s campaign hoped to have the Washington Post retract its story on his outsourcing record. The paper, however, refused, after the Romney camp could provide no credible evidence to contradict the Post’s reporting.

Health

How Obamacare Would Have Helped Workers Laid Off By Bain

After Mitt Romney’s Bain Capital bought the office supply maker SCM, laid off workers, gutted pay and benefits, and ultimately shut down the entire plant, former SCM employee Valerie Bruton was left with no choice but to turn to the safety net. In the Obama campaign ad, “Romney Economy,” she recalls:

When SCM shut down the doors, that was the first time I’d ever been in the system with food stamps.  Then I had to get on Medicaid.  It was just, it was rough, but I did it…I had no choice because I had my babies, my babies depended on me.

She was hardly alone. All 258 employees were fired immediately, then invited to reapply for their jobs at a lower wage and a 50 percent cut in health insurance. When the workers went on strike, the plant was shuttered.

Under Romney, Bain Capital replicated this “vulture capitalism,” laying off workers and slashing health care benefits. In 1993, Bain bought Kansas City’s Worldwide Grinding Systems steel mill. Less than a decade later, the mill was shuttered and 750 people were out of work. But even more importantly, “workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month,” reported Reuters. The federal Pension Benefits Guarantee Corp had to make up the difference, which were slashed again in bankruptcy court.

Now that he’s running for president, Romney has promised to repeal Obamacare and replace it with his faith in the free market. Here are two scenarios of how these workers would fare under Obamacare and under Romney’s plan.

Read more

Politics

Three Controversial Bain Decisions That Happened Before Romney Left

The Romney campaign has deflected criticism of the former governor’s business record as head of Bain Capital by insisting that he cannot be held responsible for its actions following his departure in February of 1999. However, SEC documents unearthed by Mother Jones directly contradict the campaign’s assertion that Romney broke all ties with Bain after he left to head the 2002 Salt Lake City Olympics. The SEC filings show that Romney retained “share voting and dispositive power” over at least some of it activities after November of that year and played a role through at least the end of 1999.

Indeed, the Boston Herald reported in February of that year that Romney didn’t leave the company entirely, but merely took a leave of absence and would “stay on as a part-timer with Bain, providing input on investment and key personnel decisions.” A press release confirmed this arrangement, noting that Romney was “currently on a part-time leave of absence.”

Romney, in other words, may have been involved in decisions that the campaign would rather voters forget. These include:

– Medical-waste firm disposing aborted fetuses. Bain Capital invested $75 million in the medical-waste disposal firm Stericycle, a target for anti-abortion groups for disposing aborted fetuses. The company had a record of safety violations, including a fine for “knowingly exposing workers to life-threatening diseases.” SEC filings name Romney as an individual who holds “voting and dispositive power” with respect to the stock owned by Bain.

– Firms offshoring jobs to low-wage countries. Bain Capital was the largest shareholder in Modus Media, which specialized in helping companies outsource their manufacturing. Bain became the majority shareholder in Stream International in 1999, which set up call centers overseas. The campaign’s defense was that Romney had left Bain in February of that year, but he clearly still retained ties to the firm.

– Loading a company with massive debt and causing it to cut 367 jobs. After purchasing Dade in the early 1990s, Bain “pushed Dade to borrow hundreds of millions of dollars” in April 1999. Dade bought half of Bain’s shares in the company, which led to layoffs that year and bankruptcy in 2002. It’s unclear to what extent Romney waas involved in the deal, but he was still advising Bain at the time.

Romney himself had claimed that he left the company in February of 2009. “Mr. Romney retired from Bain Capital on February 11, 1999 to head the Salt Lake Organizing Committee. Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way,” he wrote in an Office of Government Ethics report.

Economy

Romney To Visit Electronics Plant In Town Where Bain Laid Off Hundreds Of Electronics Workers

Today, Mitt Romney will bring his campaign to EIT, a circuit-board and electronics manufacturing company, in Sterling, Virginia. But while he is likely to highlight the success of the company, it represents a curious location choice for the Romney campaign.

A decade ago, the Northern Virginia suburb was home to a major circuit-board factory for the DDI Corp. DDI, based in Anaheim, CA, was a major Bain Capital investment during Romney’s tenure with the firm. Romney personally invested in the company and Romney’s name appeared on a 2001 SEC filing as a designated liaison from Bain’s management committee for the company.

While Romney and Bain made tens of millions on its investment in DDI, the company saw large layoffs in Sterling and ended up in Chapter 11 bankruptcy in 2003. A 2003 Washington Business Journal report noted:

Circuit board maker Dynamic Details has laid off 167 people at its Sterling manufacturing plant since the beginning of July — and a total of 460 over the past two years — as it weathers the lingering effects of the tech and telecom industry implosion.

According to the same story, the Sterling plant employed 550 in 2001 and just about 130 in 2003. While the Romney campaign has repeated claims that Bain is responsible for creating thousands of jobs, hundreds lost theirs at DDI, at least in part thanks to Romney and Bain.

Additionally, today’s company — EIT — appears to contradict the Romney campaign’s gloomy assessment of the nation’s economy. Virginia state legislator Joe May (R), who owns the company, told the Washington Post that his private sector firm is indeed doing “just fine.”

Economy

Romney’s Bain Profited Even As The Companies It Invested In Went Bankrupt, Analysis Reveals

Mitt Romney has argued that his business experience as head of Bain Capital from 1984 to 1999 will help him turnaround the economy, reduce the debt and place the nation on a sustainable economic footing. In fact, Romney’s years in the private sector are the centerpiece of his presidential campaign and a way for the candidate to distinguish himself from President Obama.

“Twenty five years in business, including business with other nations, competing with companies across the world, has given me an understanding of what it is that makes America a good place to grow and add jobs, and why jobs leave America – why businesses decide to locate here, and why they decide to locate somewhere else,” the former Massachusetts governor told TIME’s Mark Halperin last month. “I happen to believe that having been in the private sector for twenty-five years gives me a perspective on how jobs are created – that someone who’s never spent a day in the private sector, like President Obama, simply doesn’t understand.”

But that business record has come under attack, first from Romney’s opponents in the Republican presidential primary and later from the Obama campaign — all of whom claimed that Bain focused more on increasing profits than creating jobs. Now, a New York Times analysis reveals that the private equity firm made money even as the companies it invested in went bankrupt and employees lost their jobs and livelihoods:

The private equity firm, co-founded and run by Mitt Romney, held a majority stake in more than 40 United States-based companies from its inception in 1984 to early 1999, when Mr. Romney left Bain to lead the Salt Lake City Olympics. Of those companies, at least seven eventually filed for bankruptcy while Bain remained involved, or shortly afterward, according to a review by The New York Times. In some instances, hundreds of employees lost their jobs. In most of those cases, however, records and interviews suggest that Bain and its executives still found a way to make money. [...]

Bain structured deals so that it was difficult for the firm and its executives to ever really lose, even if practically everyone else involved with the company that Bain owned did, including its employees, creditors and even, at times, investors in Bain’s funds. [...]

In four of the seven Bain-owned companies that went bankrupt, Bain investors also profited, amassing more than $400 million in gains before the companies ran aground, The Times found. All four, however, later became mired in debt incurred, at least in part, to repay Bain investors or to carry out a Bain-led acquisition strategy.

On Thursday, the Washington Post reported that Bain also invested extensively in companies that moved jobs overseas to low-wage countries like China. The practice contradicts the rhetoric of candidate Romney, who since announcing his presidential ambitions, has criticized government policies that have led to jobs, particularly those in manufacturing, moving offshore.

Security

In 2001, China-Basher Romney Said ‘We Should Not Build Walls’ Because Of Beijing’s Rights Abuses

Mitt Romney has threatened to declare China a currency manipulator and, in a February Wall Street Journal oped on China, stated, “A nation that represses its own people cannot ultimately be a trusted partner in an international system based on economic and political freedom.” But while his campaign has had no shortage of tough talk towards China, Romney’s history at Bain Capital and his ongoing investments in its funds suggest the former Massachusetts Governor has looked favorably on companies that benefit from China’s low labor costs and controlled currency.

Even more strikingly, Reuters’ Rachelle Younglai reports today: “As chairman of the 2002 Winter Olympics, he also said Beijing should not be punished for human rights abuses.” According to Younglai, Romney was quoted in the Chicago Tribune saying:

They have practices, as reported in the media, that violate my sense of human rights, but we should not build walls even if we vehemently disagree with many of their practices. Building bridges increases the possibility for spreading the ideas of civil societies.

Romney’s inconsistent positions on China have already been cited by fellow Republicans and Washington policy analysts as a casualty of campaign season rhetoric. Last February, Romney supporter Jon Huntsman called Romney’s China policy “wrongheaded,” and dismissed his bluster on China as “typical campaign rhetoric.”

That rhetoric also stands at odds with Romney’s business record. His history at Bain Capital, the private equity firm he founded in 1984 and ran through 1999, may pose some difficult questions for a candidate who now claims he would declare China a currency manipulator if elected president. His presidential campaign promotes how three of the companies that Bain invested in during this time — Staples, Sports Authority and Dominos Pizza — created more than 100,000 jobs combined. But when Reuters conducted an examination of products at Staples and Sports Authority stores, they found that Chinese manufactured products formed the backbone of the companies’ business. 40 percent of Staples products in the sample and two-thirds of Sports Authority products were manufactured in China. Dominos has, since Romney left Bain, announced plans to franchise their restaurant in China.

Bain’s heavy investments in companies that outsource manufacturing to China means that Romney, and the company he helped found, directly benefited from Beijing’s undervaluation of its currency and inexpensive labor.

While talking tough on China, Romney toed a very different line while CEO of Bain and chairman of the 2002 Winter Olympics. Indeed, Bain’s investments in China and Romney’s ongoing investments — including, via a Bain fund, in a controversial Chinese company which provides surveillance tools to the Chinese government — underscores the disconnect between Romney’s business career and positions taken in his campaign.

Election

Trump on Romney: ‘He’d Buy Companies, He’d Close Companies, He’d Get Rid Of Jobs’

In the last few days, there has been a lively discussion about whether the Obama campaign’s critisims of Bain are “in bounds” or whether such criticism are outside the realm of acceptable political debate.

Mitt Romney, for his part, has said Obama’s criticism amounts to “attacking capitalism.”

Among those who hate capitalism, apparently, is Donald Trump. Last April, Trump described Romney’s experience at Bain as follows: “He’d buy companies, he’d close companies, he’d get rid of jobs.” Watch it:

Trump has subsequently become a prominent Romney surrogate and fundraiser. This week, Trump explained that, at the time of his critical comments he didn’t know Romney and has since come to “realize he’s a terrific guy.”

The Romney campaign has stuck by him even as he aggressively promotes birther conspiracy theories against Obama.

Romney’s tenure at Bain was also harshly criticized by Gov. Rick Perry and Newt Gingrich.

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