FACT CHECK: Bain & Co. Was Saved By A Bailout
Romney for President Chair Bob White just said that Mitt Romney saved Bain & Company. But he failed to mention the bailout Bain & Company received from the federal government. According to newly uncovered documents, Romney returned to Bain & Company as it was on the brink of bankruptcy and used the threat of doling out millions of dollars of executive bonuses to secure a $10 million federal bailout. In the end, the FDIC buckled, giving Bain & Company a $10 million bailout while Romney and his partners raked in $4 million from Bain & Company for his efforts.
A federal bailout for the candidate who opposed rescue loans for the auto industry when there were 1 million jobs on the line, has railed against bailouts on the campaign trail, and who has made the debunked “you didn’t build that” attack the central premise of his campaign? You’re welcome, Mitt.
NEWLY UNCOVERED DOCUMENTS SHOW the “legend” Mitt Romney has tried to create around his career in the private sector is “basically a lie”
Government Documents Related To The Romney Engineered Bailout Of Bain & Company “Show That The Legend Crafted By Romney Is Basically A Lie.” “According to the candidate’s mythology, Romney took leave of his duties at the private equity firm Bain Capital in 1990 and rode in on a white horse to lead a swift restructuring of Bain & Company, preventing the collapse of the consulting firm where his career began. When The Boston Globe reported on the rescue at the time of his Senate run against Ted Kennedy, campaign aides spun Romney as the wizard behind a ‘long-shot miracle,’ bragging that he had ‘saved bank depositors all over the country $30 million when he saved Bain & Company.’ In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie.” [Rolling Stone, 8/29/12]
Documents Show That Romney’s Initial Rescue Attempt At Bain & Company Was Actually A Disaster, And “Romney Rewarded Top Executives At Bain With Hefty Bonuses” While Demanding A $10 Million Federal Bailout. “The federal records, obtained under the Freedom of Information Act, reveal that Romney’s initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had ‘no value as a going concern.’ Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.” [Rolling Stone, 8/29/12]
Romney And His Partners At Bain Capital Ultimately Received $4 Million For Romney’s Services At Bain & Company, While The FDIC Provided A “Government Bailout Of $10 Million.” “The FDIC agreed to accept nearly $5 million in cash to retire $15 million in Bain’s debt – an immediate government bailout of $10 million. All told, the FDIC estimated it would recoup just $14 million of the $30 million that Romney’s firm owed the government. … Bain Capital – the very firm that had triggered the crisis in the first place – walked away with $4 million. That was the fee it charged Bain & Company for loaning the consulting firm the services of its chief executive – one Willard Mitt Romney.” [Rolling Stone, 8/29/12]