COMMENT: The 2012 Presidential race will likely be decided by the economy, or the electorate’s perception of same. Observing the media’s treatment of the candidates is reminiscent of the grotesque media bias to which Al Gore was subjected in 2000. (Robert Parry, among others, has noted the overt bias of the mainstream media toward Dubya during that election.)
A recent article in The Village Voice highlighted the manner in which Romney’s Bain Capital operated. It is the supposed “success” of Bain Capital that has been touted by Romney and the flacks in the media running interference for him as proof that this “businessman” has the necessary expertise to run the U.S. economy.
The fact of the matter is that Bain Capital and Romney epitomize the very worst aspects of predatory private equity business. If a President Romney runs the American economy the way that he operated at Bain, it bodes very poorly for American workers.
It is to be noted that, after cannibalizing businesses and screwing working folks for fun and a great deal of profit, Romney parked a great deal of money in offshore bank accounts in the Cayman Islands, one of the most notorious tax havens.
I am charging the listeners (and readers) to do a little homework. I want them to distribute this article, and the information about Romney’s offshore bank accounts. In the Internet age, it should be possible for a relatively small number of listeners to generate a great deal of buzz in this regard. If Romney gets in, you are going to be very, very sorry.
“Drivers, start your engines!”
EXCERPT: It was the early 1990s, and the 750 men and women at Georgetown Steel were pumping out wire rods at peak performance. They had an abiding trust in management’s ability to run a smart company. That allegiance was rewarded with fat profit-sharing checks. In the basement-wage economy of Georgetown, South Carolina, Sanderson and his co-workers were blue-collar aristocracy.
“We were doing very good,” says Sanderson, president of Steelworkers Local 7898. “The plant was making money, and we had good profit-sharing checks, and everything was going well.”
What he didn’t know was that it was about to end. Hundreds of miles to the north, in Boston, a future presidential candidate was sizing up Georgetown’s books.
At the time, Mitt Romney had been running Bain Capital since 1984, minting a reputation as a prince of private investment. A future prospectus by Deutsche Bank would reveal that by the time he left in 1999, Bain had averaged a shimmering 88 percent annual return on investment. Romney would use that success to launch his political career.
His specialty was flipping companies—or what he often calls “creative destruction.” It’s the age-old theory that the new must constantly attack the old to bring efficiency to the economy, even if some companies are destroyed along the way. In other words, people like Romney are the wolves, culling the herd of the weak and infirm. . . .
. . . . Bain would slash costs, jettison workers, reposition product lines, and merge its new companies with other firms. With luck, they’d be able to dump the firm in a few years for millions more than they’d paid for it.
But the beauty of Romney’s thesis was that it really didn’t matter if the company succeeded. Because he was yanking out cash early and often, he would profit even if his targets collapsed.
Which was precisely the fate awaiting Georgetown Steel.
When Bain purchased the mill, Sanderson says, change was immediate. Equipment upgrades stopped. Maintenance became an afterthought. Managers were replaced by people who knew nothing about steel. The union’s profit-sharing plan was sliced twice in the first year—then whacked altogether.
“When Bain Capital took over, it seemed like everything was being neglected in our plant,” Sanderson says. “Nothing was being invested in our plant. We didn’t have the necessary time to maintain our equipment. They had people here that didn’t know what they were doing. It was like they were taking money from us and putting it somewhere else.”
History would prove him correct. While Georgetown was beginning its descent to bankruptcy, Romney was helping himself to the company’s treasury. . . .
. . . . In the midst of that 1994 campaign [against Ted Kennedy], one of Romney’s companies, American Pad & Paper, bought a plant in Marion, Indiana. At the time, it was prosperous enough to be running three shifts.
Bain’s first move was to fire all 258 workers, then invite them to reapply for their jobs at lower wages and a 50 percent cut in health care benefits.
“They came in and said, ‘You’re all fired,’” employee Randy Johnson told the Los Angeles Times. “‘If you want to work for us, here’s an application.’ We had insurance until the end of the week. That was it. It was brutal.”
But instead of reapplying, the workers went on strike. They also decided the good people of Massachusetts should know what kind of man wanted to be their senator. Suddenly, Indiana accents were showing up in Kennedy TV ads, offering tales of Romney’s villainy. He was sketched as a corporate Lucifer, one who wouldn’t blink at crushing little people if it meant prettying his portfolio.
Needless to say, this wasn’t a proper leading man’s role for a labor state like Massachusetts. Taking just 41 percent of the vote, Romney was pounded in the election. Meanwhile, the Marion plant closed just six months after Bain’s purchase. The jobs were shipped to Mexico. . . .
. . . . An example of Romney’s cold-blooded approach is his 1994 purchase of Dade International, an Illinois medical-equipment company. He soon merged it with two similar firms, a move that tripled sales.
Once again, he couldn’t help but raid the vault, peeling away $100 million for himself and investors at the same time Dade was laying off 1,700 American workers.
After Bain closed a Dade plant in Puerto Rico, human-resources manager Cindy Hewitt was asked to lure a dozen of those employees to work in the company’s Miami factory.
But that plant soon closed as well. Although Romney was gobbling up millions, Bain still wanted those laid-off employees to repay their moving costs.
“They were treated horribly,” Hewitt told The New York Times. “There was absolutely no concern for the employees. It was truly and completely profit-focused.”
Yet Bain’s molestation wasn’t complete. It was trying to sell Dade but didn’t like the offers it received on the open market. So it created an artificial market of its own.
In 1999, it forced Dade to borrow $242 million, which was used to buy back company stock from Bain, Dade executives, and their banker, Goldman Sachs.
Bain was again extracting profits with borrowed money. It had pushed Dade’s debt to a bracing $2 billion. To help pay for the deal, the company laid off another 367 workers.
But that debt proved too much for Dade’s shoulders to carry. Three years later, the company was bankrupt.
Kosman calls it standard Romney operating procedure. To pump short-term earnings, he would essentially “starve a company,” whacking not just employees, but also customer-service and research-and-development funding—the ingredients of long-term prosperity. . . .
COMMENT: And where did this “businessman” put his money? He stashed it in the Cayman Islands, where he won’t have to pay U.S. taxes. What a guy!
EXCERPT: Although it is not apparent on his financial disclosure form, Mitt Romney has millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven.
A spokesperson for the Romney campaign says Romney follows all tax laws and he would pay the same in taxes regardless of where the funds are based.
As the race for the Republican nomination heats up, Mitt Romney is finding it increasingly difficult to maintain a shroud of secrecy around the details about his vast personal wealth, including, as ABC News has discovered, his investment in funds located offshore and his ability to pay a lower tax rate.
“His personal finances are a poster child of what’s wrong with the American tax system,” said Jack Blum, a Washington lawyer who is an authority on tax enforcement and offshore banking. . . .