By Igor Volsky
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. [...]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.
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.