FACT CHECK: The Start of Romney’s Convention Re-Invention
In Friday’s Wall Street Journal, Mitt Romney began his attempt at a convention re-invention. But we already know that Mitt Romney’s tenure as a corporate buyout specialist was not about creating jobs, it was about creating profits for himself and his investors, no matter the cost to workers, companies, or communities.
In several cases that he doesn’t list in the Journal, Romney’s firm loaded companies with debt in order to pay itself millions in fees and dividends, and then walked away with a profit while the companies were forced into bankruptcy, putting workers jobs, benefits and pensions at risk. Some of his companies were even outsourcing pioneers, shipping jobs to Mexico, India, and China. Now he’s promised to bring that same economic philosophy to the White House – a philosophy that is focused on turning a quick profit for investors, not a philosophy that would help grow America’s economy over the long term, create jobs, or strengthen the middle class.
Here’s some of what Mitt Romney wrote in his op-ed, and why his attempt to re-invent himself 70 days before an election with stakes this high just won’t work:
1. What Romney wrote: “Staples is one of many businesses we helped create and expand at Bain Capital, a firm that my colleagues and I built. The firm succeeded by growing and fixing companies.”
The Truth About The Myth Of Staples As Bain Capital’s Business Model: While Romney pretends that he made his fortune at Bain Capital from small investments in companies like Staples, the truth is that Staples was one of the smallest deals that Bain Capital did during Romney’s years with the firm. Under Romney, Bain Capital made more than 70 percent of its gain from just 10 deals, and four of those companies went bankrupt. A separate analysis even showed that Romney and his partners made $400 million from just four companies that they loaded up with debt, driving them into bankruptcy.1
2. What Romney wrote: “That was true of companies… we helped turn around, like the Brookstone retailer and the contact-lens maker Wesley Jessen.”
The Truth About Making Millions At Wesley-Jessen By Cutting Hundreds Of Jobs: Romney and his partners bought Wesley-Jessen with the agreement that 430 jobs would immediately be cut. They then went out and acquired another company by loading Wesley-Jessen with debt and cut 123 jobs and shortly thereafter closed a San Diego plant, cutting another 300 jobs and moving production to Puerto Rico. While Romney and his partners may have found this deal successful, communities and hundreds of workers lost.2
3. What Romney Wrote: “I was on the board of a medical diagnostic-laboratory company, Damon, when a competitor announced that it had settled with the government over a charge of fraudulent Medicare billing. I and fellow Damon outside board members joined together and immediately hired an independent law firm to examine Damon's own practices.”
The Truth About Profiting From Medicare Fraud And Falsely Claiming To Have Stopped It: Romney served as a director of Damon Corporation while Bain Capital was invested in the company, personally pocketing more than half a million dollars from the company as it was fraudulently bilking Medicare out of millions. The company paid a record $119 million fine after pleading guilty to the charges. Romney claimed he “blew the whistle” on the fraud, but court records show that the fraud occurred while Romney sat on the board and that no corrective action took place until after the company was sold.3
4. What Romney wrote: “Bain Capital helped build a new steel company, Steel Dynamics, which has grown into one of the largest steel producers in America today, holding its own against Chinese producers. The key to its success? State-of-the-art new technology.”
The Truth About Taking Credit For Shared Success While Evading Responsibility For Offshoring: Romney takes credit for a relatively small investment in a steel company that he says “has grown into one of the largest steel producers in America today,” while attempting to evade responsibility for investments in other companies that the Washington Post noted “grew into some of the largest outsourcing and offshoring companies in the world.” Romney also forgets to mention that this steel company received over 200 percent more in government incentives than the amount of money Bain Capital invested and the company – a supplier for General Motors, Chrysler, and Ford – recently cited that it has benefitted from increased demand in the automotive industry.4
President Obama is fighting for an economy built to last by investing in the resources we need to rebuild America from the ground up – like innovation, education and job training – to keep our country moving forward. Mitt Romney and Paul Ryan, on the other hand, want to go back to the same-top down economics that cuts taxes for millionaires and billionaires paid for by raising taxes on middle-class families and lets Wall Street write its own rules. And those are the very same values Mitt Romney learned as a corporate buyout specialist at Bain Capital.
1ProPublica, 7/31/12; Wall Street Journal, 1/9/12; New York Times, 6/22/12
2SEC Filings, 12/6/96, 8/15/00; National Public Radio, 2/23/12; San Diego Union-Tribune, 9/11/98
3Boston Globe 10/10/12, 10/11/12; SEC Filing, 6/11/93
4Washington Post, 6/29/12; Los Angeles Times, 1/13/12; American Metal Market, 6/1/09; SEC Filing 2/27/12