At least seven Securities and Exchange Commission filings from May to December 1993 by Marriott International, Inc., where Romney served as a director, listed him as ‘‘chief executive officer of Bain & Company, Inc.’’ A 1998 Sports Authority SEC filing said Romney was Bain’s CEO and chairman to 1993 and a director to 1998. A March 1993 federal credit document obtained by Rolling Stone magazine listed him as Bain’s ‘‘principal.’’ A Boston Herald news story written in October 1993 by current Romney senior adviser Eric Fehrnstrom described him as Bain’s chairman and former CEO.
Bain & Co. was not alone in moving quickly into China. Other major consulting firms, including McKinsey and Co. and the Boston Consulting Group, set up there in the early 1990s. But Bain was the earliest, the ‘‘first foreign strategy firm to do so,’’ according to the firm’s website.
‘‘Bain had as big a role as any other consulting company in bringing China into the free market,’’ said Bob Ching, a former Boston Consulting Group strategist with three decades of experience in China.
Ching and other China strategists say American consultants aided China’s state-owned firms in several ways. They set up business plans for state-owned companies. They studied the companies’ internal structure, and consultants used seminars to train Chinese officials and entrepreneurs in management practices.
In December 1993, the same month Marriott listed Romney as Bain’s chief executive officer in an SEC filing, Bain consultants conducted two days of seminars for Chinese trade officials in Beijing, according to accounts at the time from Xinhua, China’s official news service, and other Asia-based news media.
Xinhua’s report from Dec. 9, 1993, said 58 Chinese trade officials were trained in ‘‘Western ways in enterprise valuation, mergers and acquisitions and in enterprise performance improvement.’’ Other media reports said the officials were involved in China’s push to list state-owned firms on world stock markets to reap private funding.
In opening remarks, Gao Shudong, then secretary-general of China’s State Economic and Trade Commission, said the training would help China in ‘‘speeding up the structure adjustment of the state-owned enterprises.’’ The reports identified two attending Bain & Co. consultants as Beijing-based adviser Rick Yan and Australian Greg Hutchinson.
The Xinhua report quoted Hutchinson as saying that Bain ‘‘has a sincere interest in helping China to achieve its goals.’’ Another series of Bain seminars led by Yan in February 1994 used case studies to train officials in ‘‘developing entry strategies in China,’’ according to media accounts.
Bain spokeswoman Cheryl Krause said ‘‘we don’t confirm who our clients are, nor discuss any of our client work.’’
Yan, who now heads 51Job Inc., a China-based web employment service, declined to comment. Hutchinson, now a Bain senior adviser, did not reply to emails from the AP. Chinese trade officials declined comment and other government officials were not immediately available.
Several former U.S. diplomats based in China in the 1990s said Chinese trade officials were desperate to learn how the markets worked and absorb Western management skills. ‘‘If you were working with state enterprises, you were working with the Chinese government,’’ said Sasser, who took over the U.S. Embassy in Beijing in 1995.
Trade friction dominated U.S.-China relations in the early 1990s, but the Clinton administration welcomed Chinese moves toward free markets. As more U.S. companies flocked to China, consultants used their newfound expertise and contacts to advise them. Bain’s early clients with interests in China included Dell, Motorola and Anheuser Busch.
The U.S. also was betting on Russia’s transformation, and by 1993 had hired Bain to help transform the post-Soviet economy’s small businesses, according to State documents. At the time, Russia’s government, headed by Boris Yeltsin, was seen as a solid U.S. ally. Current relations between Vladimir Putin’s government and the Obama administration are chillier despite Obama’s ‘‘reset’’ effort.
Bain, one of several strategy firms hired by the U.S. Agency for International Development in a $98 million deal headed by KPMG Peat Marwick, sent out teams to lay groundwork with Russian officials in Leningrad and more than a dozen other cities. Bain consultants set up pilot projects, developed commercial property lists and held seminars across the country.
A 1994 internal Bain assessment highlighted the ‘‘impressive’’ pace of Russia’s privatization but acknowledged ‘‘limited improvement.’’ Bain consultants at times griped about their Russian counterparts and rampant municipal corruption. In a February 1994 note to USAID officials, they also pressed for more money, warning that because of delays ‘‘we will be unable to complete our contract deliverables.’’Continued...