Bipartisan Support for Romney's Business Past Should Scare Us All
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In recent weeks there have been multiple exposés documenting how Mitt Romney’s private equity firm, Bain Capital, both outsourced jobs and made a massive profit while bankrupting one of the companies they own.
And just a couple of weeks ago, “Sterling” was how former President Bill Clinton described the Republican nominee for president’s track record as a businessman. Clinton was just the latest in a chorus of high-profile current and former Democratic elected officials who came to the defense of Romney and private equity in the face of criticism from outside observers, and most importantly, from President Obama’s re-election campaign. Just as Romney’s record at private equity super-power Bain Capital was becoming the central focus of the national campaign narrative, Newark Mayor Cory Booker, co-chair of the DNC platform committee, and Massachusetts Governor Deval Patrick, co-chair of the Obama reelection campaign went on national television to defend the honor of Romney, Bain Capital and private equity.
In the era of the 99%, these comments were seized on by cable news hosts and reporters across the country. A “Dems defending big business and Mitt Romney” story certainly had some “man bites dog” appeal – but it struck many as downright shocking that prominent Democrats would not just “bite man,” but in fact “bite THE man,” as their comments undercut one of Obama’s key attacks and points of contrast with Romney.
While the Obama campaign – and pundits everywhere - may have been stunned by comments from these normally supportive allies, I wasn’t surprised at all. Back in 2007, while directing the Service Employees International Union’s campaign to hold the private equity industry accountable for their damage to our economy, I learned all too well how deep the relationship between current and former government officials and this little-known segment of the financial industry really runs. My experiences interacting with the titans of this industry were so eye-opening, I kept a diary of my meetings so I wouldn’t lose any of the fresh insights and disturbing details of those exchanges.
When Clinton, Booker, Patrick and others defended Bain and Romney, I was instantly transported back to a 2008 meeting I had with the Private Equity firm KKR and two of the chief operatives for the industry – former Speaker of the House and Democratic presidential candidate Dick Gephardt and former RNC chair and George W. Bush campaign manager Ken Mehlman. We had been pressing KKR to adopt a social responsibility code that protected the rights of workers in companies they purchased and owned, and as part of the campaign had released a series of videos with Brave New Films that can be found at warongreed.org. One of the videos highlighted that KKR’s Henry Kravis made $51,000 an hour and owned numerous homes, and contrasted this with the low pay of workers at Toys 'R' Us, HCA and other companies KKR co-owned with Bain Capital. Sitting in the room watching two former rivals, Mehlman and Gephardt, working together, throwing aside years of ideological and partisan differences to defend and represent KKR, was a startling example of Private Equity’s reach and influence.
The relationship between government, politicians, and private equity is a non-partisan love affair spanning nations and continents. Until Mitt Romney’s rise to the national stage, this tryst largely took place out of the sight of the public, as many elected leaders would exit government to join the boards or payrolls of some of the world’s largest PE firms. This is a conflict and confluence of interests that alone should cause alarm. But Romney and private equity titans aren’t satisfied with just influencing government. Romney’s bid for the presidency represents PE’s first attempt at a complete leveraged buyout of the White House. It’s another turn in the famous revolving door and might be the greatest unspoken danger of this election.