A look at Mitt Romney’s time at Bain Capital:
Marc Wolpow, a former Bain colleague of Romney’s, told reporters during Mitt’s first Senate run that Romney erred in trying to sell his business as good for everyone. ‘I believed he was making a mistake by framing himself as a job creator,’ said Wolpow. ‘That was not his or Bain’s or the industry’s primary objective. The objective of the LBO business is maximizing returns for investors.’ When it comes to private equity, American workers – not to mention their families and communities – simply don’t enter into the equation.
Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in “management” fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren’t crying: They’d made more than $100 million on a $5 million investment.
“Greed and Debt: The True Story of Mitt Romney and Bain Capital.” — Matt Taibbi, Rolling Stone