|Mitt Romney is touting a record of job creation as chief executive of Bain Capital, but his rivals are pointing at cuts at companies the firm has invested in. (Brian Snyder /Reuters)|
Scrutiny of Bain Capital and of Romney as CEO intensifies
Bain Capital is about to move into five floors in the middle of one of Boston’s most prominent addresses, the John Hancock Tower.
That said, the venture capital company prefers to maintain a low profile, an aim all the more challenging as its employees increasingly engage in the very high-profile world of politics.
And now, with cofounder Mitt Romney once again campaigning for the Republican presidential nomination, this time as the front-runner, the scrutiny is intensifying.
One of Bain’s former executives, Edward Conard, was recently outed as the mystery donor behind a $1 million contribution to the pro-Romney Restore Our Future political action committee.
The White House also revealed it is gearing up to attack Romney not just over his politics, but also the business acumen he claims as a result of his leadership of Bain.
“The second aspect of the campaign to define Romney is his record as CEO of Bain Capital, a venture capital firm that was responsible for both creating and eliminating jobs,’’ Politico wrote recently. “Obama officials intend to frame Romney as the very picture of greed in the great recession - a sort of political Gordon Gekko.’’
That’s hardly good publicity. And the Democrats will not be alone in taking that tack.
Rick Perry, the latest entrant into the GOP campaign, took dead aim at Bain last week after Romney questioned the Texas governor’s job-creation record.
“I was in the private sector for thirteen years after I left the Air Force,’’ said Perry. “You know, I wasn’t on Wall Street, I wasn’t working at Bain Capital, but the principles of the free market - they work whether you’re in a farm field in Iowa or whether you’re on Wall Street.’’
Romney has faced questions about his wealth - pegged at up to $250 million in his most recent financial disclosure form - as well as how he made it ever since he waged his first run for elective office in 1994.
His challenge to then-Senator Edward M. Kennedy, the toughest in the Democrat’s nearly half-century career, fizzled after scrutiny of Bain’s dealings with American Pad & Paper Co.
Bain bought it for $5 million in 1992, charged it advisory fees, and increased the company’s debt from $11 million in 1993 to nearly $400 million in 1999. Bain and its investors ultimately walked away with $100 million in profit.
During the 1994 campaign, Kennedy zeroed in on Bain’s acquisition earlier that year of an Ampad plant in Marion, Ind., where many workers were fired then rehired at a lower wage. The whole affair allowed Kennedy to cast Romney as unscrupulous and an enemy of the working class.
Romney has focused on his Bain victories, including providing funding to help launch or grow Staples, Domino’s Pizza, and other household names.
“When I was at Bain Capital, we invested in about 100 different companies. Not all of them worked,’’ he said earlier this month in a debate. “But I’m very proud of the fact that I learned about how you can be successful with an enterprise, why we lose jobs, how we gain jobs and overall, in those 100 businesses we invested in, tens of thousands of jobs, net-net, were created.’’
The numbers show how Bain is no longer the company Romney help start in 1984.
By the time he left in 1999 - to perform the public service of resurrecting the 2002 Olympic Winter Games - Bain was a $4 billion company with 100 employees in one office. Today, it’s got $65 billion under management and 800 employees in 11 offices around the world.
It also has a large contingent of Democrats, including managing director Steve Pagliuca, the
Bob White, one of Romney’s closest friends from their days together at Bain, said regardless of the changes, the criticism of Romney’s leadership of the company is unjustified.
“Mitt has a stellar record in the private sector, understands how the economy works, knows how jobs are created and lost, has great vision and leadership skills, and has learned as much from the failures as the successes,’’ White said. “These are the experiences desperately needed by our next president to guide us through these uncharted waters.’’