Mitt Romney has based his candidacy for the presidency on his experience as a corporate buyout specialist. “I know how business works. I know why jobs come and why they go.” But a closer look at Romney’s business record reveals a pattern of job loss, bankruptcies, and outsourcing—a kind of economics that Americans just can’t afford.
Ahead of the first presidential debate, here are ten facts you should know about Romney’s tenure at Bain Capital.
Romney was not in the business of creating jobs: As a corporate buyout specialist, Romney and his partners made millions for investors mostly by buying and selling existing businesses, as opposed to helping create new ones. As Romney’s own colleague said, “I never thought of what I do for a living as job creation ... The primary goal of private equity is to create wealth for your investors.”
Learn more about Romney’s model of business here.
Romney loaded companies up with debt, driving several into bankruptcy: Using what’s called a “leveraged buyout,” Romney and his investors would take control of a business, paying only a fraction of the total price. The rest would be paid for by loading the company up with debt that it would be responsible for paying back. Sometimes his firm would keep loading on debt to have the company buy other companies or would use the borrowed money to pay out a “dividend” to themselves—ultimately piling on enough debt to drive the company into bankruptcy.
Click here to learn how Romney’s business practices left the company GST Steel in ruins.
Romney and his investors still made money, even when companies ended up bankrupt: “Bain structured deals so that it was difficult for the firm and its executives to ever really lose,” even if companies took on more and more debt and eventually went bankrupt. Romney and his investors made $400 million from four companies that went bankrupt.
Learn more about how Romney still made out with millions while leaving companies decimated.
Workers lost their jobs thanks to Romney’s business practices: Thousands of middle-class workers were laid off by companies that Romney’s firm invested in and controlled. Dade Behring, a medical supplies company that Bain loaded with debt, went into bankruptcy and nearly 3,000 workers lost their jobs.
Listen to Cindy explain what Romney’s business policies actually meant for middle-class workers.
Romney’s business helped firms outsource American jobs: Bain Capital invested heavily in firms that “grew into some of the largest outsourcing and offshoring companies in the world,” making millions off companies that were “pioneers in the practice of shipping work from the United States to overseas call centers and factories” in countries including China and India.
Check out this map to see where Romney has helped outsource and offshore jobs.
Romney was responsible for the decisions that left companies bankrupt and workers without jobs: Romney wants Americans to believe that he is not responsible for the consequences of his business decisions, claiming that he “retroactively retired” from Bain Capital before workers lost their jobs and companies went bankrupt. But as the Chairman, CEO, and sole shareholder, Romney can’t hide the fact that his decisions cost so many Americans their livelihoods.
See how the facts clearly show that Romney is responsible for the consequences of his decisions.
Romney relied on a federal bailout to save his former consulting firm: Romney attacks President Obama for rescuing the American auto industry, but helped save Bain & Company from bankruptcy by securing a $10 million federal bailout. He secured the bailout by threatening to deplete the company’s cash reserves by doling out millions of dollars for executive bonuses and ended up raking in $4 million for himself and his Bain Capital investors for his efforts.
Read about Romney’s hypocrisy in Rolling Stone.
Romney still stands to profit from Bain’s investments in China: In deciding to run for office, Romney promised to shed investments that would conflict with his new stance on China. However, Romney stands to profit from Bain’s investments in a Chinese surveillance company that actually makes the very tools the Chinese government uses “to intimidate and monitor political and religious dissidents.”
Learn more about Romney’s investments here.
Romney led Bain Capital’s investment in a “low-wage, low-tax” Chinese company: While the CEO of Bain Capital, Romney invested in a Chinese company less than two weeks after that firm told investors that it was “a low-wage, low-tax firm that would not be subject to taxes in the United States.”
Learn more about how Romney’s investments conflict with the political principles he now espouses.
Romney will bring his corporate buyout experience to the White House: Mitt Romney and his partners played by their own set of rules, and practiced a model that was profitable for wealthy investors, no matter the cost to local communities. This is the experience that Mitt Romney now cites as his qualification to be president, and the economic philosophy he would bring to the entire country.
Take a look at what Romney is really selling the country.