Contact us PRINT (PDF) Sources "The Federal Bailout That Saved Mitt Romney," 9/13/2012, Rolling Stone
KING OF THE DOLE: The federal bailout that saved Romney from business failureWhen Bain was about to fail in 1993, Romney threatened the FDIC to secure a $10.7 million federal bailout, as FDIC documents detail.
Why was George W. Bush conspicuously absent from Tampa in August?
Because as Romney asks voters to strip bank regulations put in place under Obama (Romney has pledged to repeal Dodd Frank)
and rekindle financial speculation, why remind voters that Bush did exactly that with dire consequences?
Especially given the ruins of raided firms left by Bain and Company in the 1990s under Romney’s management.|
In 1992, for example, Bain acquired Ampad for $5 million, then fired workers, closed factories, and grew its debt from $11 million to $444 million, forcing it into bankruptcy. But Bain earned $100 million. In the case of GS industries, which Bain raided in 1993 and left bankrupt, the federal government ended up paying $44 million to bail out the company’s underfunded pension plan.
Romney's 10.7 million federal bailout
In 1992, while Romney was managing director, Bain and Company was in debt to the Federal Deposit and Insurance Corporation (FDIC) for $30 million. Nevertheless, in April 1992, Romney approved lavish bonuses for Bain executives, which helped bring Bain close to bankruptcy months later.
Romney then threatened the FDIC in 1993 with doling out more executive bonuses unless it forgave $10.7 million of Bain’s debt. The FDIC capitulated, concluding that Bain had “no value as a going concern” and “would otherwise fail.” The Romney campaign has refused to answer media questions about these disclosures and documents.
(Update: given Romney's $10.7 million FDIC bailout in conjunction with lavish executive bonuses, the contempt he expressed for the 47%, including seniors living on social security, is brazen hypocrisy. )
Romney’s affinity for Cayman Islands banking, with its unsavory history of tax evasion and money laundering, is disconcerting. Bain holds 138 secret accounts there, including 12 in which Romney has personal interests. On August 29, a yacht moored in Tampa hosted a reception for Romney’s biggest donors. It flew not the U.S. but the Cayman Islands flag, as shown in ABC news photos.
The Cayman Islands was also where, under Bush, billions of Enron dollars disappeared in 2001 into 700 shell corporations. Back then, traders from Enron, Bush’s biggest early political backer, were recorded joking about “all that money you guys stole from those poor grandmothers.”
Romney’s economic posturing requires ignoring not only Bush, but the longer 50-year U.S. economic record, as shown. Twice as many jobs were created per year under Democratic v. Republican presidents.
In 2000, between the waves of bank failures under Bush I and Bush II, Bill Clinton achieved the biggest annual U.S. budget surplus ever. Funny thing, the Democrats didn’t need to hide Clinton in Charlotte.
But if you’re Romney, just ignore Bush and blame Obama for the residual effects of the biggest financial crash since the great 1929 depression. After the 2008 Bush crash, median U.S. wealth dropped 39%, to 1992 levels. But for Romney, it’s Obama’s fault that it’s taking time to recover.
One more remarkable claim by Romney is best considered in light of an old joke. A drunk is watching a man on TV who jumps from a tall rooftop. The drunk gasps, but friends console him, explaining that it had all happened hours ago. The drunk replies, “I know. But I didn’t think he’d be fool enough to do it again!”
So, to recap his financial record, Romney stashes millions of dollars in offshore bank accounts and won’t release past income tax returns. He scorns those living on social security as moochers, while securing a $10.7 million federal bailout to save himself from business failure. Yet he says he will fix the U.S economy? To a drunk or to someone preparing to jump again from the same rooftop, that might make perfect sense.
— David E. Scheim, author of the New York Times best seller, Contract on America. Adapted from a guest editorial published in the Roanoke Times, 9/12/2012.
The reporting and documents on Romney's $10.7 million FDIC bailout are from Rolling Stone, September 13, 2012 edition, The federal bailout that saved Mitt Romney, by Tim Dickinson. The article provides a link to all cited FDIC documents. Or you may view the article and supporting documents in one PDF file.
Romney has pledged to repeal Dood Frank: Christian Science Monitor, 8/28/2012.
Bain’s takeover of AMPAD
1. Bloomberg Business Week, 5-21-2012, "Mitt Romney's Private Equity Nightmare."
2. Rolling Stone, 9/13/2012, "Greed and Debt: the true story of Mitt Romney and Bain Capital", by Matt Taibbi
Bain’s takeover of GS industries: Reuters, Special Report, “The Steel Skeleton in Romney’s closet,” Jan. 12, 2012.
Romney's $10.7 million federal bailout: Rolling Stone, 9/13/2012, as cited above.
Romney’s Cayman Island accounts
1. ABC News, "Romney Parks Millions in Cayman Islands", 1/18/2012
2. Vanity Fair, "Where the money lives," Aug. 2012.
3. Additional findings from 950 leaked documents on Bain and Romney Finances: The Guardian (London), 8/23/2012
The Cayman Islands banking as a center for dirty money: Daily Kos, 7/9/2012
Yacht for Aug. 29 Romney campaign event in Tampa was flying the Cayman Islands, not the U.S., flag: ABC News, 8/29/2012
Enron traders laughed at stealing money from grandmothers: New York Times, 6/13/2004
Enron used 700 shell corporations in the Cayman Islands: New York Times, 1/28/2002
The figures for private sector jobs created and stock market growth under Democratic and Republican administrations since 1961 are from the public record, as reported by Bloomberg, Politico, and the US Dept. of Labor. A detailed presentation of sources and calculations for the national debt is provided by www.snopes.com.
President Bill Clinton achieve the largest budget surplus ever in 2000: CNN, 9/2/2000.
Sources on Romney's fifty foreign accounts in the Cayman Islands, Switzerland, Luxemborg, Bermuda and four other foreign countries
Mitt Romney's tax dodge, Rolling Stone, 10/12/2012.
Mitt Romney's tax mysteries: a reading guide, Pro Publica, 8/28/2012.
Romneys reported sharp gain in foreign income in 2011 tax return, Reuters, 9/25/2012.
Print in 8.5 x 11 format: RomneyKingOfTheDole.pdf|
The print format allows distribution as a single letter-sized (8.5 x 11") flyer. Alternatively, it can be printed two-sided on letter-sized card stock or paper, then cut in half horizontally, for compact flyers.)