Greed and Debt: The TRUE Story of Mitt Romney and Bain Capital

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By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It's almost enough to make you think he really is qualified for the White House.
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Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25Gvw0DBT

Let's hear you refute this stuff, Superfreak. :D
 
Here's more...

Report: Bain Capital Among Firms Being Investigated By N.Y. Attorney General

NICK MARTIN 7:01 PM EDT, SATURDAY SEPTEMBER 1, 2012

Bain Capital, the company co-founded by Republican presidential nominee Mitt Romney, is reportedly among several private equity firms being investigated by the New York attorney general.

According to a story published on Saturday on the New York Times’ website, Attorney General Eric Schneiderman (D) sent subpoenas to six firms in recent weeks to determine whether they improperly managed to cut hundreds of millions of dollars from their tax bills. Romney helped found Bain Capital in 1984 but left the company before becoming governor of Massachusetts in 2002.
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http://livewire.talkingpointsmemo.com/entry/report-bain-capital-among-firms-being-investigated-by
 
Quick breakdown by Taibbi of the Bain process:

Here's how Romney would go about "liberating" a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it's called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.

Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company's management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.

But here's the catch. When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.

Now your troubled firm – let's say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.

"That interest," says Lynn Turner, former chief accountant of the Securities and Exchange Commission, "just sucks the profit out of the company."
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Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25Hehkguy
 
Some idiot here who likes to brag about how Bain 'helps' companies also parrots industry-speak stupidity about all the 'risks' taken by private equity firms in order to do all this 'helping'. No doubt this same idiot spewing all this 'helping' bullshit has a stake in giving this despicable vulture feeding-frenzy good PR.....:D

Here's Taibbi blowing the lid off that 'risk' bullshit:
Fortunately, the geniuses at Bain who now run the place are there to help tell you whom to fire. And for the service it performs cutting your company's costs to help you pay off the massive debt that it, Bain, saddled your company with in the first place, Bain naturally charges a management fee, typically millions of dollars a year. So Tricycle Inc. now has two gigantic new burdens it never had before Bain Capital stepped into the picture: tens of millions in annual debt service, and millions more in "management fees." Since the initial acquisition of Tricycle Inc. was probably greased by promising the company's upper management lucrative bonuses, all that pain inevitably comes out of just one place: the benefits and payroll of the hourly workforce.

Once all that debt is added, one of two things can happen. The company can fire workers and slash benefits to pay off all its new obligations to Goldman Sachs and Bain, leaving it ripe to be resold by Bain at a huge profit. Or it can go bankrupt – this happens after about seven percent of all private equity buyouts – leaving behind one or more shuttered factory towns. Either way, Bain wins. By power-sucking cash value from even the most rapidly dying firms, private equity raiders like Bain almost always get their cash out before a target goes belly up.
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Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25Hg2PkuK
 
Bijou said:
Some idiot here who likes to brag about how Bain 'helps' companies also parrots industry-speak stupidity about all the 'risks' taken by private equity firms in order to do all this 'helping'. No doubt this same idiot spewing all this 'helping' bullshit has a stake in giving this despicable vulture feeding-frenzy good PR.....:D

Here's Taibbi blowing the lid off that 'risk' bullshit:


Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25Hg2PkuK
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Don't forget the govt. subsidies that Bain applies for, and gets.
 
It's like privatizing two wars and keeping the cost off the books all while claiming it's cost effective, MORE cost effective....LOL....morons.
 
More Tabbi on the convention and truth about Romney...

So what did they talk about? The line that astonished me most from Mitt's speech was this one, where he talked about the changes Americans "deserved" and should have gotten during Obama's presidency:

You deserved it because you worked harder than ever before during these years. You deserved it because, when it cost more to fill up your car, you cut out moving lights, and put in longer hours. Or when you lost that job that paid $22.50 an hour, benefits, you took two jobs at $9 an hour…
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Are you kidding? Mitt Romney was the guy that fired you from that $22.50 an hour job, and helped you replace it with two $9 an hour jobs! He was a pioneer in the area of eliminating the well-paying job with benefits and replacing it with the McJob that offered no benefits at all. One of the things that killed him in the Senate race against Ted Kennedy were Kennedy ads that reminded voters that Mitt's takeovers resulted in slashed wages and lost benefits. He was exactly the guy that eliminated that classic $22.50 manufacturing job, like in the case of GST Steel, where Bain took over with an initial investment of $8 million, paid itself a $36 million dividend, ended up walking away with $50 million, and left GST saddled with over $500 million in debt. 750 of those well-paying jobs were lost.

What kinds of jobs were left for those fired workers to look for? Well, in the best-case scenario, you might have found one at Ampad, another Bain takeover target, where workers had their pay slashed from $10.22 to $7.88 an hour, tripled co-pays, and eliminated the retirement plan.

So a guy who eliminated hundreds of $22 an hour jobs and slashed hundreds more jobs to below $9 an hour blasts Barack Obama for not giving you the better life you deserved, after you lost your $22/hour job and had to take two $9/hour jobs. Are we all high or something? Did that really just happen?

Just a lame pair of speeches, overall. They made me miss George Bush. At least the Bush/Cheney/Rove era offered a clear ideological choice – and some pretty passionate, ingeniously-delivered political theater, comparatively. Where's the blood and guts, the bomb-‘em-till-they're-crispy war calls? Where are the screw-the-poor tirades, the "you can pry it from my cold dead hand" guns-and-liberty crescendos? This stuff is pretty weak beer compared to those days.



Read more: http://www.rollingstone.com/politic...ke-me-miss-george-bush-20120831#ixzz25K2KxJ22
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Taibbi's illustration of AMPAD's destruction a la Bain:

Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in "management" fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren't crying: They'd made more than $100 million on a $5 million investment.

To recap: Romney, who has compared the devilish federal debt to a "nightmare" home mortgage that is "adjustable, no-money down and assigned to our children," took over Ampad with essentially no money down, saddled the firm with a nightmare debt and assigned the crushing interest payments not to Bain but to the children of Ampad's workers, who would be left holding the note long after Romney fled the scene. The mortgage analogy is so obvious, in fact, that even Romney himself has made it. He once described Bain's debt-fueled strategy as "using the equivalent of a mortgage to leverage up our investment."
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Seven million in 'management fees'! Yeah, let's get this thief to run the entire country - GREAT idea. :rofl2:

Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25KWRR0MA
 
"Bainies."

The private equity business in the early Nineties was dominated by a handful of takeover firms, from the spooky and politically connected Carlyle Group (a favorite subject of conspiracy-theory lit, with its connections to right-wingers like Donald Rumsfeld and George H.W. Bush) to the equally spooky Democrat-leaning assholes at the Blackstone Group. But even among such a colorful cast of characters, Bain had a reputation on Wall Street for secrecy and extreme weirdness – "the KGB of consulting." Its employees, known for their Mormonish uniform of white shirts and red power ties, were dubbed "Bainies" by other Wall Streeters, a rip on the fanatical "Moonies." The firm earned the name thanks to its idiotically adolescent Spy Kids culture, in which these glorified slumlords used code names, didn't carry business cards and even sang "company songs" to boost morale.

The seemingly religious flavor of Bain's culture smacks of the generally cultish ethos on Wall Street, in which all sorts of ethically questionable behaviors are justified as being necessary in service of the church of making money. Romney belongs to a true-believer subset within that cult, with a revolutionary's faith in the wisdom of the pure free market, in which destroying companies and sucking the value out of them for personal gain is part of the greater good, and governments should "stand aside and allow the creative destruction inherent in the free economy."
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Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25KXfOH5y
 
Mitt the sociopath:

After the Ampad deal, Romney expressed contempt for critics who lived in "fantasy land." "This is the real world," he said, "and in the real world there is nothing wrong with companies trying to compete, trying to stay alive, trying to make money."
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The private equity 'brethren' protect each other.

If you haven't heard much about how takeover deals like Dunkin' and KB Toys work, that's because Mitt Romney and his private equity brethren don't want you to. The new owners of American industry are the polar opposites of the Milton Hersheys and Andrew Carnegies who built this country, commercial titans who longed to leave visible legacies of their accomplishments, erecting hospitals and schools and libraries, sometimes leaving behind thriving towns that bore their names.

The men of the private equity generation want no such thing. "We try to hide religiously," explained Steven Feinberg, the CEO of a takeover firm called Cerberus Capital Management that recently drove one of its targets into bankruptcy after saddling it with $2.3 billion in debt. "If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person," Feinberg told shareholders in 2007. "We will kill him. The jail sentence will be worth it."
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Read more: http://www.rollingstone.com/politic...omney-and-bain-capital-20120829#ixzz25KbGaV5H
 
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