BOTH MITT AND HIS WIFE HAVE MILLIONS OF DOLLARS IN OFFSHORE FUNDS, in the Cayman Islands and elsewhere, which are typically set up to avoid federal income tax. Romney claims to have paid taxes on all of his income, including offshore investments — BUT since he won’t release his tax returns, we’ll never know if that’s true. Another thing we’ll never know if he won’t release his tax returns: the rate of federal tax he pays, which is likely far less than the rate you or I pay.
Bain Capital, under Romney’s leadership, established trusts in offshore accounts to attract business from people looking to avoid federal income taxes. See ABC News video above.
Is the FBI Going After Bain Capital? The answer to the headline question is yes. About two weeks ago, the FBI evoked FOIA exemption 7(a) and denied access to all Bain Capital records on the grounds that “there is a pending or prospective law enforcement proceeding relevant to these responsive records; and that release of the information contained in these responsive records could reasonably be expected to interfere with the enforcement proceedings.”
What this all means is anyone’s guess, but it seems perfectly clear now that the more “safe” and “electable” Mitt Romney may have more skeletons in the closet than any of the other candidates.
REMEMBER THAT MITT (THE QUARTER BILLION DOLLAR MAN) WOULD LIKE TO FURTHER LOWER TAXES ON THE WEALTHY, while increasing taxes on working and middle class people, resulting in a reduction of federal revenue by approximately 16 percent! Austerity, anyone?
Mitt Romney 2012: different rules for different classes of people — not class warfare though!
Here’s an excellent point about Newt’s message on Romney and Bain Capital:
One of the big ironies of the anti-Bain attack on Romney is that Newt is the one doing what the Democrats should be doing, namely, painting Bain as part of the Wall Street problem:
“You have to ask the question, is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of people and then walk off with the money?” […]
The former Speaker is making the case that, in contrast to good old fashioned businesses who make stuff, Romney and his ilk have instead gamed the system to create a soulless machine that profits from the misery of others. […]
“I am totally for capitalism, I am for free markets,” Gingrich assured reporters on Monday. “Nobody objects to Bill Gates being extraordinarily rich, they provide a service.” What he instead is concerned about is when an investor receives “six-to-one returns, and the company goes bankrupt.”
I haven’t seen a Democratic attack on Bain phrased this crisply.
…[T]he Wall Street Journal on Monday ran an extensive analysis that found of 77 business Bain invested in from 1984 to 1999, 22 percent either filed for bankruptcy or closed within eight years, and another 8 percent lost all the money Bain invested.
Mitt Romney: Job Creator or Job Cremator?
“Mitt Romney, I think, is more of a job cremator than a job creator. He was a corporate buyout specialist at Bain Capital. He dismantled companies. He cut jobs. He forced companies into bankruptcy and he outsourced jobs and sent jobs overseas. That’s not a record to write home about, that’s not a record to be proud of, and it’s something voters need to know.” — DNC chair Debbie Wasserman Schultz
Being the wealthy son of a former Michigan governor, who didn’t have to be drafted into the Vietnam War because of prior commitments he had in France, Romney was probably a little confused by this plebeian’s idea of “fair pay for a fair day’s work” — especially if it doesn’t involve firing other people, handing out pink slips, closing down companies while pocketing profits (and off-shoring those profits to avoid taxes), followed by a long, relaxing country club lunch…
That’s the motto of the GOP in general, and Mitt Romney and Bain Capital specifically (source: JoeWo) –
POLITICO: It’s a story line from a tough Democratic ad that was teed up for use against Romney in his 1994 Senate campaign in Massachusetts. The spot, which was provided exclusively to POLITICO, never actually aired. But it’s all but certain that some version of its allegations will surface in the GOP primary or the general election, if Romney makes it that far.
[…] “The way the company was rescued was with a federal bailout of $10 million,” the ad says. “The rest of us had to absorb the loss … Romney? He and others made $4 million in this deal.… Mitt Romney: Maybe he’s just against government when it helps working men and women.”
The facts of the Bain & Co. turnaround are a little more complicated, but a Boston Globe report from 1994 confirms that Bain saw several million dollars in loans forgiven by the FDIC, which had taken over Bain’s failed creditor, the Bank of New England.
An exchange between Sean Hannity and Rick Perry, regarding Perry’s statements that Bain Capital (and likely GOP candidate Romney) were vultures who preyed on distressed companies:
HANNITY: “It almost sounds like Occupy Wall Street. It doesn’t sound like someone who is governing Texas as a conservative.”
PERRY: “There is a real difference between venture capitalism and vulture capitalism. Venture capitalism we like. Vulture capitalism, no. And the fact of the matter is that he is going to have to face up to this at some time or another.”
Hannity’s right — it does sound like OWS because it makes sense, it’s factual. When someone in wingnuttia falls out of lockstep and starts spouting facts and truth, they’re accused of being like “the liberals.” Heh.
But like Romney’s work on all the businesses Bain invested in, the primary goal with these companies wasn’t job creation but making them more profitable and valuable. This meant embracing aspects of capitalism that have unsettled some Americans: laying off workers when necessary, expanding overseas to chase profits and paying top executives significantly more than employees on lower rungs.
“The reason Romney’s work at Bain is such a liability is that he is the guy who was brought in to do the firing. He didn’t build new businesses, he didn’t create jobs in the way a guy who opens up a local hardware store creates jobs, and he cashed in whether or not the business actually succeeded. Americans believe in fairness. Success is supposed to be earned through hard work and playing by the rules. To those of us who aren’t of the finance world, there’s something inherently unfair about an investor making a massive profit even as the business he invested in fails. It makes us feel like the game is rigged. That’s Romney’s Bain problem.”
"I think what Gov. Perry is getting at is that Gov. Romney has claimed to have created 100,000 jobs at Bain and people are wanting to know, is there proof of that claim? And was it U.S. jobs created for United States citizens?"
Other Republicans can speak about the need for free markets in a sluggish economy. But with Romney, we have a singular example of someone who made a quarter of a billion dollars by firing the white middle and working class in droves in ways that do not seem designed to promote growth or efficiency, but merely to enrich Bain.
Here’s the New York Post, for Pete’s sake, making the case last year against the shifty Wall Street games of Bain:
Romney’s private equity firm, Bain Capital, bought companies and often increased short-term earnings so those businesses could then borrow enormous amounts of money. That borrowed money was used to pay Bain dividends. Then those businesses needed to maintain that high level of earnings to pay their debts…
* Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-’90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.
* Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.
* Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.
* Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.
Romney’s Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.
[…] Of all the jobs he liquidated, moreover, many are in the American heartland. And his response to the people in this documentary – white working class heartland Americans, the GOP base – is that they are merely envious of his achievements. They don’t come off that way in the ad. They come off as bewildered, betrayed and sure that Romney’s goal in all this was merely, solely to make money for himself – the kind of money that most Americans cannot even compute.
“a heat-seeking missile aimed directly at the white working class id.” This is incredibly important in a 2012 context — if Romney is going to win the presidency, he’s going to need to crush President Obama with white working-class voters who tend to support the GOP anyway. This short film, with all the subtlety of a sledgehammer, tells this constituency that Romney is not only indifferent to their struggles, but he and people like him caused their economic plight.
But when Romney’s nominated (the Republican Party will have it no other way), will the rightwing base voters decide they hate Obama more than they loved getting a paycheck and buying things (like food and medicine and mortgage payments)? I’m going to go with yes because Obama Derangement Syndrome is a chronic condition.
Here’s a recent comment I received, in part, on this post:
“This is proof that raising the tax rate on the “rich” would do nothing but hurt the working class. When ever you hear a politician says that we need to raise the income tax on the “rich” you should understand that all they want to do is take more money from the working class…
No, sorry. As a matter of fact, raising taxes on the “rich” means raising taxes on the following malarkey, which are cuts, loopholes, and subsidies that were written to only benefit the rich and have effectively redistributed income from the bottom to the top for the past 30 years:
You know, venture capitalists are not creators. They’re business men who find weak companies and prey on them. And Mitt can’t understand why anyone would ever question capitalism, no matter how feral it gets. “What? We found a wounded animal and we ate it!”
When asked about wealth distribution and income inequality, Mitt said, “It’s fine to talk about those things in quiet rooms.” Quiet rooms? Why? It’s a wealth gap not anal warts.
No wonder he doesn’t want to talk about it out loud — the most recent payroll data came in this week and the median annual income for an American is $26,353 a year. Or as Mitt calls it — a rounding error. At one of the debates Mitt said, “I won’t try and define who’s rich and who’s not rich, I want everybody to be rich.” Cue the morons in the audience clapping their hands like seals at a Seaworld getting a bucket of chum.
Well I can define who’s rich and who’s not: who’s rich is Mitt Romney and who’s not is someone making $26,000 a year…
According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.
After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”…
[…] As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.
[Would the wealthy really] squirrel away their money under the mattress if the capital gains rate goes back to the level at which it was under Clinton? In fact, business investment was stronger under President Clinton that it was under President Bush. The overwhelming majority of capital gains go to the richest households. Keeping that rate so far below the rates applied to normal income is simply a giveaway to the wealthy that doesn’t boost the economy.
And what’s Mitt Romney, the GOP’s preordained presidential candidate, have to offer? Nothing if you’re not in the top one percent. For the rest of us, it’s the same old bottom to top income redistribution scheme — only more so: Continue…
A new two-minute Obama commercial stars steelworkers somberly dismantling Mitt Romney’s record as a job creator at Bain Capital. “I know how business works. I know why jobs come and why they go,” says Romney in the clip. But the veterans of Kansas City’s GST Steel tell a different story of the Bain takeover, which occurred in 1993 and resulted in about 750 people out of work: “They made as much money off of it as they could. And they closed it down,” laments Joe Soptic, a steelworker for three decades. “It was like a vampire,” says another. “They came in and sucked the life out of us.” The extra-long spot has an extended version online at RomneyEconomics.com, and both are packed with soundbites. “It was like watching an old friend bleed to death,” adds one worker. “Bain Capital walked away with a lot of money that they made off this plant. We view Mitt Romney as a job destroyer.” – Steelworkers Slam Mitt Romney and Bain Capital in Harsh New Obama Ad — Daily Intel
Before Mitt Romney’s Bain Capital bought the rambling SCM factory in Marion, Ind., it was running three shifts a day, making hanging file folders and other office supplies. But on July 5, 1994, everything changed.
The new owner, American Pad & Paper, owned in turn by Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.
“We were told they bought the assets, not the union or the [labor] contract,” recalls Randy Johnson, who at the time worked as a machine operator and was a union shop steward. The workers – some the third generation in their families to have jobs there – eventually went on strike, and Bain closed the factory 5-1/2 months after acquiring it.
It’s not Bain’s duty to care about whether jobs are created or lost. But a plausible response to that statement is, well, do we want a guy who spent two-plus decades in the private sector not caring about whether he was creating or destroying jobs–but making jillions for himself while doing it–to be the president of the United States? Fair question. There are lots of Americans who don’t want a former community organizer as president. We’ve heard from them. But there are surely also a lot of Americans who don’t want a hedge-fund man as president. As with, say, Obama’s unconventional upbrining versus Romney’s quite conventional one, the two men represent and symbolize very different Americas. – Michael Tomasky | The Return of Bain Capital
THAT’S SO BAIN! The Tampa Bay Times reports on yet another example of Mitt Romney’s “heads I win, tails you lose” business model: Millions of dollars in tax subsidies given to Bain-owned Dade Behring for creating jobs in Puerto Rico … after which the company shut down its Puerto Rico operations. […] Romney says he supports tax incentives at the state level, but note that this involved federal dollars—dollars that went to a Bain-owned company for creating jobs even though the company destroyed the jobs. Adding insult to injury: Romney’s firm “earned” $342 million on it’s $30 million Dade Behring investment, a profit of more than one thousand percent, even though it ended up firing 850 Floridians. — Jed Lewison