Republican presidential candidate Mitt Romney has staked his presidential campaign on his time at the private equity firm Bain Capital, arguing that the private-sector experience shows he can fix the ailing economy and even create jobs.
"In the business I had, we invested in over 100 different businesses and net-net, taking out the ones where we lost jobs and those that we added, those businesses have now added over 100,000 jobs," said Romney on Saturday at the ABC debate. "I'm a good enough numbers guy to make sure I got both sides of that."
The Romney campaign says that the figure comes from three successful businesses that Bain served as a consultant on--Staples (89,000 jobs), The Sports Authority (15,000 jobs) and Domino's (7,900 jobs). The AP wrote that the figure only includes successes at Bain that open Romney to hypocrisy for attacking President Barack Obama's record on jobs:
By that sort of charitable math, President Barack Obama could be credited with creating over 1 million jobs even though employment overall is down about 2 million since he came to office. But Romney accuses Obama of destroying jobs while using a different standard to judge his own performance--cherry-picked examples that leave everything else out.
However, not included in the figure were other acquisitions that lost jobs, which also created large returns for the company's investors.
After Bain became majority shareholder in Kansas City-based Worldwide Grinding Systems, 750 people lost their jobs, workers were denied health benefits and severance pay and pensions were cut, reported Reuters. The firm eventually needed a $44 million federal bailout to cover pension losses.
The acquisition, however, was lucrative for Bain's investors--the firm invested $24.5 million and got a $58.4 million return, according to Los Angeles Times estimates.
Romney's firm also laid off about 150 workers from the Holson Burnes Group in South Carolina, while earning $22 million from its initial investment, a return of over 20 percent.
A Wall Street Journal analysis of 77 businesses invested by Bain under Romney's tenure showed that the firm made excellent returns -- 50 to 80 percent annually -- for its investors, with ten deals providing 70 percent of returns. Twenty-two percent of businesses Bain took over filed for bankruptcy or shut down, and all of the money invested was lost on eight percent of the company's acquisitions, the paper found.
Romney's family has an estimated wealth of 190 to 250 million dollars, according to financial disclosure reports. Upon leaving the firm in 1999, he negotiated a retirement agreement paying him a share of the company's profits since -- income that is likely taxed at the lower capital gains rate, though it's impossible to know, because Romney refuses to release his tax returns.
Romney's Republican rivals, who generally believe in the same free market economics as Romney, are attacking him over his tenure at Bain. Former House Speaker Newt Gingrich said that calling him a "predator" was above board. A Gingrich-aligned super PAC, Winning Our Future, has purchased rights to a documentary on Bain called "When Mitt Romney Came To Town."
"Gov. Romney enjoys firing people, I enjoy creating jobs," said former Utah Gov. Jon Huntsman.
"I have no doubt that Mitt Romney was worried about pink slips -- whether he'd have enough of them to hand out," quipped Texas Gov. Rick Perry, referring to Romney's recent comment that he worried about losing his job.
Romney defended himself against the attacks over the weekend. "I'm not surprised to have the New York Times try to put free enterprise on trial," he said. "It's a little surprising from my colleagues on this stage."
At the ABC debate, he said the layoffs were part of the free market. "We understand that, in the free economy, in the private sector, that -- that sometimes investments don't work and you're not successful," he said. "It always pains you if you have to be in a situation of downsizing a business in order to try and make it more successful, turn it around and try and grow it again."
Romney, however, had a different message Monday. "I like being able to fire people who provide services to me," he said, trying to explain why he favors individuals being allowed to pick their own health insurance. "If someone doesn't give me the good service I need, I want to say, you know, 'I'm going to get somebody else to provide that service to me.'"
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