And fine, you'd expect that since they're politicians and Democrats. But it's a little more significant when a fellow private equity man says the same thing.
In a column for the Financial Times this Tuesday, Luke Johnson, chairman of the private equity firm Risk Capital Partners, rips the idea that Romney's experience as the head of Bain Capital might have done anything to prepare him for public service.
You really ought to read the whole thing, but here are a few choice bits: Johnson argues that private equity firms are "run to maximise profits for the owners, rather than for the creation of jobs"; that people who succeed in the industry "need to be ferociously interested in accumulating money"; and that generally speaking, private companies "are not democracies -- they are quasi-dictatorships."
And then the clincher: "I'm no fan of Barack Obama but to me, Mr Romney's candidacy simply lacks all credibility."
Now, we already know that Mitt Romney is a rich man -- worth more than the last eight presidents, Nixon through Obama, combined. And we know he's a believer in "creative destruction," the business concept that essentially means corporate success can entail a lot of people losing their jobs.
As for Bain Capital, that company has definitely caused some layoff-related distress in its time. The firm's has come under fire for acquiring companies and restructuring them in a way that makes them more profitable. Bain has been known to make recommendations that leave hundreds of U.S. employees jobless while moving those jobs overseas.
Romney, for his part, has pointed to the success of Bain itself as evidence that he would be able to guide the languishing economy onto a better path. Along the way, he's argued Bain Capital created "thousands of jobs" during his time there, a revision of an earlier statement that claimed a number closer to 100,000.
Bain Capital was among a handful of venture-capital firms that helped found Sports Authority, <a href="http://www.washingtonpost.com/blogs/ezra-klein/post/the-two-faces-of-mitt-romney-and-bain-capital/2012/01/10/gIQArYmRoP_blog.html" target="_hplink"><em>The Washington Post</em> reports.</a> (h/t: <a href="http://theweek.com/article/index/228422/4-good-things-bain-capital-did-on-mitt-romneys-watch" target="_hplink"><em>The Week</em></a>)
In 1986, Bain Capital invested $650,000 into Staples, then just a start-up, reports <a href="http://articles.boston.com/2012-01-14/nation/30624519_1_buyout-firms-venture-capital-investment-firm-purchases" target="_hplink"><em>The Boston Globe</em></a>. Bain ended up investing at least $2.5 million into the firm and helped take the company public in 1989. The deal earned Bain roughly $13 million, <a href="http://www.boston.com/news/nation/articles/2008/01/27/as_bain_slashed_jobs_romney_stayed_to_side/?page=full" target="_hplink"><em>The Globe</em> reports.</a>
Steel Dynamics, Inc.
In 1994, Bain Capital invested $18 million into the little known Steel Dynamics and helped the firm raise the remaining capital to begin production, reports <a href="http://theweek.com/article/index/228422/4-good-things-bain-capital-did-on-mitt-romneys-watch" target="_hplink"><em>The National Review</em></a>. Steel Dynamics, Inc., or SDI, is now the fifth-largest U.S. producer of carbon-steel products. (h/t: <a href="http://theweek.com/article/index/228422/4-good-things-bain-capital-did-on-mitt-romneys-watch" target="_hplink"><em>The Week</em></a>)
Dominos, Toys R Us, AMC Entertainment and More
Bain Capital has either bought or invested in firms such as Dominos, AMC Entertainment, Toys "R" Us, Burlington Coat Factory and Dunkin' Brands, <a href="http://www.politico.com/gallery/2012/07/6-facts-about-bain-capital/000267-003405.html" target="_hplink">Politico reports.</a>
Corporate Software Inc.
Bain Capital became a minority shareholder in Corporate Software Inc. in in 1993, <a href="http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_story_1.html" target="_hplink">reports <em>The Washington Post</em>.</a> While Bain was taking an active role in CSI -- which eventually merged with Stream International Inc. -- CSI began outsourcing customer service to call centers in foreign nations.
In 1994, Bain Capital acquired Dade International, a medical equipment company, for $27 million, <a href="http://articles.boston.com/2012-01-14/nation/30624519_1_buyout-firms-venture-capital-investment-firm-purchases/2" target="_hplink"><em>The Boston Globe</em> reports.</a> While Bain made eight-times what it invested from the deal, the business direction it set for Dade left the firm in piles of debt and temporary bankruptcy in 2002, <a href="http://www.nytimes.com/2011/11/13/us/politics/after-mitt-romney-deal-company-showed-profits-and-then-layoffs.html?pagewanted=all" target="_hplink">reports <em>The New York Times</em>.</a> Dade Behring, as it was renamed in the mid-90s, was offered a buyout by Kohlberg Kravis Roberts & Company for $1.9 billion, which Bain rejected, <em>NYT</em> reports. Instead, Dade took on nearly $400 million more debt to buyout Bain's shares in 1999. While <em>The Globe</em> reports that Dade was eventually sold to Siemens for $7 billion in 2007, 1,700 people lost their jobs in the bankruptcy process.
In 1992, Bain Capital acquired American Pad & Paper LLC., or Ampad, <a href="http://www.boston.com/news/nation/articles/2008/01/27/as_bain_slashed_jobs_romney_stayed_to_side/?page=full" target="_hplink"><em>The Boston Globe</em> reports.</a> According to <em>The Globe</em>, Bain's Ampad strategy led to acquisition of competitors that left the firm heavily in debt. While Bain yielded over $100 million from an initial investment of $5 million, Ampad was forced to declare bankruptcy in 2000. 250 workers lost their jobs and Ampad's unsecured creditors only received $330,000 of the $179 million they were owed, <a href="http://www.politico.com/blogs/burns-haberman/2012/05/bankruptcy-report-on-bainowned-ampad-creditors-repaid-124072.html" target="_hplink">Politico reports</a>.
In 1993, Bain Capital became a majority shareholder of then-named GS Technologies, a firm that had been operating since 1888, <a href="http://www.reuters.com/article/2012/01/06/us-campaign-romney-bailout-idUSTRE8050LL20120106" target="_hplink">Reuters reports.</a> While former GS Industry executives are reported to have been pleased with Bain's leadership, they believe Bain unnecessarily saddled their company with debt, installing inexperienced managers and spurring buyout offers from competitors. GS filed for bankruptcy in 2001. While Bain made $12 million off of an initial $8 million investment -- along with millions more in consulting fees -- the over 700 steelworkers who lost their jobs also lost the severance pay and health insurance they had been promised. The U.S. government also had to put in $44 million towards bailing out the firm's underfunded pension plan.