Wednesday, June 15, 2011

Romney’s Bain Capital Profited Through Offshore Tax Havens, Closing U.S. Factories, Laying Off Workers

January 17, 2008

During his campaign, Republican candidate Mitt Romney has preached a message of economic populism by vowing to fight to keep jobs in America. We take a look at Romney’s days heading up the buyout firm Bain Capital with Los Angeles Times reporter, Bob Drogin. He writes, "From 1984 until 1999, Romney led Bain Capital, a Boston-based private equity group that earned jaw-dropping profits through leveraged buyouts, debt hedge funds, offshore tax havens and other financial strategies. In some cases, Romney’s team closed U.S. factories, causing hundreds of layoffs, or pocketed huge fees shortly before companies collapsed." [includes rush transcript]

AMY GOODMAN: OK. Also, I wanted to ask you about the AmPad deal. And we only have a minute to go.

BOB DROGIN: OK. AmPad was basically one of the deals that came back and really caused a problem for Romney back in 1994, when he ran against Ted Kennedy, when he made his first bid for elected office. He ran for the US Senate seat for Massachusetts. AmPad was a company they bought in 1992, and—Bain Capital, sorry—made a big investment and essentially bought the company. And after they bought it, the new management team that went in closed factories, fired a lot of people and really slashed the operations. And when he ran for Senate, some of these striking workers came and picketed him and really dogged his campaign, and it created a pretty ugly labor dispute. I think Kennedy described, you know, Romney at the time as putting profits over people.

And after the campaign was over, they took AmPad public—and he lost—they took AmPad public, and it prospered for about a year, and then it crashed into bankruptcy, and by then Bain—and laid off, you know, several thousand people. By then, Bain Capital had taken out, I was able to document, $102 million. And that was a model that we saw in a number of places. I found about at least a half-a-dozen companies, where Bain Capital essentially bought in; laid people off; stripped it down; took out, in some cases, tens of millions of dollars or hundreds of millions; and then the company crashed into bankruptcy.