If you happen to see Mitt Romney talking about his time at Bain Capital, keep this in mind: The government helped him build that.
The question of who built this or that particular business is one of the tentpoles of the entire Republican National Convention, at which Romney will be speaking Thursday night, accepting his party's nomination to run for president.
It's a riff on a mangling of some words President Obama once spoke, which, if edited in a certain way, seem to suggest that Obama thinks people who built businesses didn't really build them -- that Big Government did instead.
And one person who has gotten quite a lot of government help with his business over the years has been Mitt Romney.
The latest example comes from Rolling Stone, which in its Sept. 13 issue tells how the Federal Deposit Insurance Corp. ended up footing a bill of at least $10 million in bailing out Bain & Co., the consulting firm that spawned the private-equity firm Bain Capital. The story is based partly on documents the magazine received under the Freedom of Information Act. It will probably get a lot less attention than Matt Taibbi's cover opus on Romney in the same issue, but is no less interesting.
Bain & Co. got into deep financial trouble in the late 1980s, partly because the founding partners of Bain Capital had stripped it of cash and saddled it with debt. But since the personal reputation of Romney was so tied to the fate of the Bain & Co, he jumped back into the company in 1990, after six years as CEO of Bain Capital.
In that time, he refused to let the company simply slip into bankruptcy, RS claims, reportedly inspiring a frustrated Goldman Sachs banker to tell Romney to "go fuck" himself.
Ultimately, Romney managed to convince Bain's creditors to take a steep discount on Bain debt, using a threat to pay Bain executives big bonuses that would have stripped it of the cash it had left, leaving creditors with next to nothing, according to Rolling Stone.
One of those creditors was the FDIC, which had taken over a bank that loaned money to Bain. The FDIC ended up collecting about $14 million of the $30 million Bain owed it, according to the magazine. Taxpayers didn't foot the bill for this, FDIC banks did, but RS points out that those costs were in turn probably absorbed by bank customers in the form of higher fees.
If this reed feels a little too thin to beat Romney very aggressively with, then there are plenty of other examples of companies owned by Bain Capital benefiting from government tax credits and subsidies. Bloomberg news detailed several of these back in June, writing:
The public-private agreements, which began in the first decade of Romney’s tenure as CEO, show that government played a supporting role in establishing Bain as among the nation’s most successful private equity firms and enabling him to accumulate a fortune his campaign says could reach $250 million.
Despite this largesse, Bloomberg pointed out, Romney in a March 19 speech decried the government's “endless subsidies and credits intended to shape behavior in our economic society." Including economic behavior that makes him money, apparently.
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