President Barack Obama enjoys attacking Mitt Romney for his work at
Bain Capital, while portraying it as a vampire-like operation,
destroying the livelihoods of entire communities for short-term gain.
Obama's donors funding his Super PAC, Priorities USA, even went so far
as to blame Romney for the death of a laid-off worker's
As a former statewide elected office holder in Ohio, I know politics
is an ugly business. But I never thought I would witness allies of a
sitting President of the United States accuse his opponent of murder.
In reality, what Bain does is good. With 80 percent of the more than
350 companies they invest in turning a profit, Bain expands the
operations of companies that work and reorganizes companies that do
not. In America's dynamic economy, this sort of change and innovation
is essential to job and wealth creation.
In what can only be described as shameless hypocrisy, Obama does
support venture capitalism when it supports his political purposes.
The story you probably have not heard is that in the battleground
state of Pennsylvania, Philadelphia-based Sunoco's refinery was in
trouble. According to the company's 10-K report, it had to pay $1.3
billion for "significant expenditures for environmental projects and
compliance activities" to satisfy the carbon-limiting requirements of
Obama's EPA mandates.
Sunoco rightfully feared regulatory costs would grow rapidly under the
Obama administration, and made the decision to get out of the refining
business entirely. Sunoco confirmed the cost of EPA requirements
played a major factor in this decision.
When Obama found out a refinery was going to close and thousands of
union jobs would be lost in the key battleground state while gas and
heating-oil were going to skyrocket before the election, he has one of
his cronies call in a favor with one of his friends on Wall Street.
Gene Sperling, director of Obama's National Economic Council, started
discussions to sell the refinery to the Carlyle Group, a
politically-connected private equity firm. Carlyle plans on taking a
two-thirds stake in the refinery at no cost, while promising to invest
millions in upgrading the refinery. In the process, it is keeping
American fuel-prices under control and saved 850 unionized jobs. To
ensure the rescue happened, Pennsylvania politicians were happy to
work with the Obama administration and offer $25 million in subsidies,
at the expense of taxpayers.
A major concern for Carlyle was an agreement Sunoco had in 2005 to
limit emissions at its refineries. Obama's White House referred the
issue to the EPA, which quickly modified the agreement, as it was
important to the re-election campaign.
Given all the money the bailout showered on the financial services
sector, it's no skin off Carlyle's back to buy a refinery if it helps
keep the President in office, even if the Administration's policies
force them to sell or close the facility after the election.
But all of this could have been avoided if EPA rules were not so
onerous that one assumes they were created with the specific intent to
limit (murder!) America's oil refining capacity.
In an ultimate example of political hypocrisy, Obama has no problem
using venture capital to delay the prosperity-destroying results of
his regressive, anti-growth policies until after the election.