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Archive for the ‘Bain Capital’ Category

Think Progress

By Travis Waldron on May 20, 2012 at 12:36

The private equity firm co-founded by presumptive GOP presidential nominee Mitt Romney “fired a lot of people” to get “prosperity for the rich,” CNBC analyst Jim Cramer said during an appearance on Meet The Press this morning. During a panel discussion on the effectiveness of an ad from President Obama’s campaign highlighting Romney’s past at Bain Capital, which bankrupted nearly a quarter of the companies in which it invested while making billions of dollars, Cramer said the firm’s past earned Romney a reputation as a “job destroyer, not a creator.” Watch it:

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The Maddow Blog
Tue May 15, 2012 8:00 AM EDT

Mitt Romney’s background at Bain Capital, the only experience the Republican presidential hopeful considers relevant to his campaign, can be pretty ugly. Romney orchestrated leveraged buyouts, flipping companies quickly for large profits, at the expense of thousands of workers who were considered collateral damage.

But for months, there’s been a standard line from the GOP campaign whenever President Obama’s team even hinted at this issue: what Romney did at his vulture-capital firm was similar to what the administration did when it saved the auto industry.

The argument has never stood up well to scrutiny. Back in January, when Romney started pushing the argument, the Democratic National Committee put together this video explaining why the comparison doesn’t make sense.

At a purely superficial level, Romney’s argument may appear to have some surface-level accuracy: in order to save GM and Chrysler, the Obama administration had to close some dealerships and make some sacrifices in order to rescue the larger companies themselves. When Bain Capital had to lay off thousands of American workers, the argument goes, Romney was largely doing the same thing.

But a closer look reveals how deeply foolish the comparison really is. Romney’s leveraged buyouts and mass layoffs were intended to do one thing: make a profit for investors. The fate of the companies, the workers, and the surrounding communities was irrelevant. Period. Full stop.

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Politico

By ALEXANDER BURNS|

5/14/12 6:18 AM EDT

The Obama campaign’s 2-minute ad on Mitt Romney’s Bain Capital is record is out, and it is brutal.

Targeting Romney’s involvement in the acquistion of GST Steel, the commercial shows workers at a shuttered plant pinning Romney and Bain with the blame.

“They made as much money off it as they could and they closed it down, they filed for bankruptcy, without any concern for the families or the communities,” says Joe Soptic, a former steelworker. “It was like watching an old friend bleed to death.”

The spot directly contrasts the steelworkers’ testimonials with Romney’s words touting his business experience, showing the Republican saying “I know how business works. I know why jobs come and why they go” and “As I look around at the millions of Americans without work, it breaks my heart.”

There’s a longer version of the video at RomneyEconomics.com. Your move, Romney campaign …

UPDATED: In an email to reporters, Romney spokeswoman Andrea Saul called the ad an invitation to engage in a larger debate about jobs.

“We welcome the Obama campaign’s attempt to pivot back to jobs and a discussion of their failed record.  Mitt Romney helped create more jobs in his private sector experience and more jobs as Governor of Massachusetts than President Obama has for the entire nation,” she said. “President Obama has many questions to answer as to why his administration used the stimulus to reward wealthy campaign donors with taxpayer money for bad ideas like Solyndra, but 23 million Americans are still struggling to find jobs.  If the Obama administration was less concerned about pleasing their wealthy donors and more concerned about creating jobs, America would be much better off. ”

That’s at best a lateral response and doesn’t really take on the claims in the Bain ad directly. So the question is whether Romney will tackle the attack head-on at a later point or whether the hope is to sidestep that kind of debate as long as possible.

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The American Prospect

Jamelle Bouie

May 2, 2012

The super wealthy apparently believe that they deserve constant deference.

Greg Sargent is rightfully stunned by the entitled petulance of Wall Street bankers who are shocked—shocked—that President Obama would do anything other than praise their indispensable brilliance:

Wall Streeters are so upset about Obama’s harsh populist rhetoric that they privately called on him to make amends with a big speech — like his oration on race — designed to heal the wounds of class warfare in this country. […]

Of course, their exaggerated weariness notwithstanding, the “wounds of class warfare” haven’t been borne by Wall Streeters, who remain fabulously wealthy even after causing the worst downturn since the Great Depression. If there’s anyone waging class warfare, it’s the radicalized representatives of the rich, who have successfully engineered government to enhance their wealth at the cost of our shared responsibilities. As such, the actual victims of class warfare are the ordinary Americans who face stagnant wages, rising costs, and a tattered safety net.

After going through the insanity of Wall Street complaints, Sargent ends his post on this note:

One wonders if there is anything Obama could say to make these people happy, short of declaring that rampant inequality is a good thing, in that it affirms the talent and industriousness of the deserving super rich. It certainly seems clear that they won’t be satisfied until he stops mentioning it at all. [Emphasis mine]

If you think the bolded section is an exaggeration, you should take some time to read Adam Davidson’s New York Times profile of Edward Conard, a former partner at Bain Capital—Mitt Romney’s investment fund—who now works as an apologist for the ultrawealthy. Conard believes three things. First, that millionaires and billionaires earned every penny of their wealth through merit and hard work:

God didn’t create the universe so that talented people would be happy,” he said. “It’s not beautiful. It’s hard work. It’s responsibility and deadlines, working till 11 o’clock at night when you want to watch your baby and be with your wife. It’s not serenity and beauty.”

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WSJ

  • POLITICS
  • Updated March 29, 2012, 9:42 p.m. ET

BY MARK MAREMONT

President Barack Obama’s re-election campaign called on Republican front-runner Mitt Romney to release his tax returns dating back to the 1980s, to see if they contain information about an uncommon investment arrangement at his former private-equity firm that may have helped swell his individual retirement account.

The request follows a page-one article in The Wall Street Journal on Thursday that recounted how employees at the firm, Bain Capital, …

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WSJ

Updated March 28, 2012, 10:09 p.m. ET

By MARK MAREMONT

Just after Philippe Wells took a job in 1998 at Bain Capital, then run by Mitt Romney, he recalls hearing an unusual boast from a partner. The man’s individual retirement account had jumped tenfold in five years.

Mr. Wells soon learned how this was possible. Bain, like many other private-equity firms, allowed employees to co-invest in its takeover deals. This posed a risk they could lose their whole investment, as they sometimes did. But because of the firm’s success during the Romney era, employees ended up able to share in returns for Bain investors that averaged 50% to 80% annually.

Bain added a couple of unusual twists that made co-investing even more rewarding. It allowed employees to co-invest via tax-deferred retirement accounts, and to do so by buying a special share class that cost little but yielded much larger gains than other shares when deals proved successful, according to former employees and internal Bain documents analyzed by The Wall Street Journal.

In one particularly successful deal, Bain increased the equity value of a company it had acquired by 36-fold in 20 months. But some Bain employees saw a 583-fold increase over the same period on IRA money they invested in the special share class of that company. Being in an IRA, the gain could then be rolled over, without initially subtracting taxes, into fresh Bain deals, for years of compounding.

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Politico

By ALEXANDER BURNS|
3/16/12 6:19 AM EDT

The Times takes a look this morning at Bain Capital’s role in expanding Chinese government surveillance programs, in another instance of the private equity fund linking Mitt Romney – however indirectly – to some politically undesirable activities:

In December, a Bain-run fund in which a Romney family blind trust has holdings purchased the video surveillance division of a Chinese company that claims to be the largest supplier to the government’s Safe Cities program, a highly advanced monitoring system that allows the authorities to watch over university campuses, hospitals, mosques and movie theaters from centralized command posts.

The Bain-owned company, Uniview Technologies, produces what it calls “infrared antiriot” cameras and software that enable police officials in different jurisdictions to share images in real time through the Internet. Previous projects have included an emergency command center in Tibet that “provides a solid foundation for the maintenance of social stability and the protection of people’s peaceful life,” according to Uniview’s Web site. …

Mr. Romney has had no role in Bain’s operations since 1999 and had no say over the investment in China. But the fortunes of Bain and Mr. Romney are still closely tied.

The financial disclosure forms Mr. Romney filed last August show that a blind trust in the name of his wife, Ann Romney, held a relatively small stake of between $100,000 and $250,000 in the Bain Capital Asia fund that purchased Uniview.

In a statement, R. Bradford Malt, who manages the Romneys’ trusts, noted that he had put trust assets into the fund before it bought Uniview. He said that the Romneys had no role in guiding their investments. He also said he had no control over the Asian fund’s choice of investments.

One of the key questions about Romney’s Bain record has always been over what span of time he’ll be treated as accountable for the company’s operations. Democrats would like that window to extend to the present, since Romney continues to draw substantial income from the company. Romney has emphasized that he hasn’t been tied to Bain’s day to day business in quite some time. The debate will play out in the general election, and the Times story is a reminder of why the stakes for Romney’s campaign will be considerable.

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The New York Times
By  and PENN BULLOCK
Published: March 15, 2012

BEIJING — As the Chinese government forges ahead on a multibillion-dollar effort to blanket the country with surveillance cameras, one American company stands to profit: Bain Capital, the private equity firm founded by Mitt Romney.

In December, a Bain-run fund in which a Romney family blind trust has holdings purchased the video surveillance division of a Chinese company that claims to be the largest supplier to the government’s Safe Cities program, a highly advanced monitoring system that allows the authorities to watch over university campuses, hospitals, mosques and movie theaters from centralized command posts.

The Bain-owned company, Uniview Technologies, produces what it calls “infrared antiriot” cameras and software that enable police officials in different jurisdictions to share images in real time through the Internet. Previous projects have included an emergency command center in Tibet that “provides a solid foundation for the maintenance of social stability and the protection of people’s peaceful life,” according to Uniview’s Web site.

Such surveillance systems are often used to combat crime and the manufacturer has no control over whether they are used for other purposes. But human rights advocates say in China they are also used to intimidate and monitor political and religious dissidents. “There are video cameras all over our monastery, and their only purpose is to make us feel fear,” said Loksag, a Tibetan Buddhist monk in Gansu Province. He said the cameras helped the authorities identify and detain nearly 200 monks who participated in a protest at his monastery in 2008.

Mr. Romney has had no role in Bain’s operations since 1999 and had no say over the investment in China. But the fortunes of Bain and Mr. Romney are still closely tied.

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The Huffington Post | By Jennifer Bendery  | Posted: 03/15/2012 12:48 pm  Updated: 03/15/2012  1:36 pm

WASHINGTON — In a fiery campaign speech on Thursday, Vice President Joe Biden took direct aim at former Massachusetts Gov. Mitt Romney for advocating that the auto industry go bankrupt instead of the Obama administration bailing it out.

“[Romney] said let Detroit go bankrupt. He said that,” Biden said to boos during a Toledo, Ohio campaign event. “He said what what we propose, and I quote, ‘is even worse than bankruptcy.'”

More telling, he said, is that Republicans like Romney were instead advocating that the private sector come to the aid of the auto industry, something Biden pointed out was never going to happen. He cited as proof the fact that Romney’s own private equity firm did nothing to help out during the crisis.

“Bain Capital wasn’t lining up to give anybody money,” Biden said. Romney said “the market, Wall Street, will help lift them out … Wrong.”

In the end, the administration bailed out the industry and it is now returning to stable footing. Romney said a government bailout “would make GM, quote, ‘the living dead,'” Biden said. “I say to Gov. Romney — his prediction of a living dead — we now have living proof: a million jobs saved.”

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Addicting Info
February 5, 2012
By

On Wednesday, February 1st, American Airlines announced that it will take the advice of Mitt Romney’s firm, Bain Capital, and lay off 13,000 workers -15 percent of its workforce- replacing their pension plans with 401(k) plans and ending company-paid retiree healthcare.

The lay off announcement came only seven days after American Airlines hired Bain Capital to guide it through a bankruptcy procedure for which the airline had filed last November.

American Airlines spokesperson told the Wall Street Journal, the cost of hiring Bain – hourly fees of up to $1,100- as “a usual and necessary part of the Chapter 11 process. We will be reviewing these costs carefully to ensure that they are monitored and managed appropriately.”

Bain Capital is a private equity firm, which was founded by a group of Bain & Co. partners including current Republican presidential frontrunner Mitt Romney. Romney formally retired from Bain Capital in 1999 but still continues to receive a portion of Bain Capital profits as Romney’s 2010 tax returns show an “obligation to continue to provide services to Bain.”

Joshua Gotbaum, director of The Pension Benefit Guaranty Corporation (PBGC) – the federal agency that helps secure failed pension plans – said “before AMR takes such a drastic action as firing 13,000 workers and killing the pension plans of 130,000 employees and retirees, it needs to show there is no better alternative. The company had failed to provide even basic financial details.”

James Little the President of Transport Workers Union (TWU), which represents 24,000 workers said “We’re going to fight this. I have a hard time sitting back when American Airlines is taking hard-earned money to pay $525,000 a month to have Bain come in and tell them how to cut heads.”

Little also mentioned Mitt Romney, “He’s talking about creating jobs. He’s not a job creator. He’s a job cremator.”

AMR plans to purchase hundreds of new aircrafts to replace them with more fuel efficient ones to cut fuel use.  U.S. Bankruptcy Judge Sean Lane has not yet approved the new jet order but temporarily approved AMR’s proposal to retain Bain and 11 other firms for bankruptcy counsel, but withheld final approval.

Unions are outraged that the airline would order hundreds of new aircrafts but claim it is in severe enough financial distress to sack employees and cut pension plans.

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