A new report from Rolling Stone reveals how the “legend” Mitt Romney has created about his private sector experience is “basically a lie.”
According to newly uncovered documents obtained by the magazine, Romney returned to Bain & Company as it was on the brink of bankruptcy and used the threat of doling out millions of dollars for executive bonuses to secure a $10 million federal bailout. If Romney carried out his threat, “the losers in this game would not only [have been] Bain’s creditors—including the federal government—but the firm’s nearly 1,000 employees worldwide.”
In the end, the FDIC gave Bain & Company a $10 million bailout while Romney and his partners raked in $4 million from his efforts.
This was a federal bailout for the candidate who opposed rescue loans for the auto industry when there were 1 million American 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.
Here’s why Mitt Romney owes a big “thank you” to the American people:
[G]overnment documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. 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.
With his selection of Paul Ryan as his running mate, Romney has made fiscal stewardship the centerpiece of his campaign. A banner at MittRomney.com declared, “We have a moral responsibility not to spend more than we take in.” Romney also opposed the federal bailout for Detroit automakers, famously arguing that the industry should be forced into bankruptcy. Government bailouts, he insists, are “the wrong way to go.”
But the FDIC documents on the Bain deal—which were heavily redacted by the firm prior to release—show that as a wealthy businessman, Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm. ...
[W]hile taxpayers did not finance the bailout, the debt forgiven by the government was booked as a loss to the FDIC—and then recouped through higher insurance premiums from banks. And banks, of course, are notorious for finding ways to pass their costs along to customers, usually in the form of higher fees. Thanks to the nature of the market, in other words, the bailout negotiated by Romney ultimately wound up being paid by the American people.
Read the full article here.