Mitt Romney on Bain: “I insisted on having almost dictatorial powers.”
The ethical problem with Bain in a nutshell.
There’s apparently a few ways of taking over a company. The most common ways of doing it with the intent to bankrupt it are a hostile takeover or buying off its executives.
Mitt Romney chose buying off the executives with bonuses.
In business deals called leveraged buyouts, Bain would borrow money to buy troubled companies and then force the companies to pay back Bain’s loans. By moving the loans plus interest payments onto the troubled companies’ already deficit-heavy banksheets, this formula guaranteed the failure of the companies.
The result: All the CEOs and Bain Capital profited on the way out, while the average worker lost his or her job.
This is what happened with Ampad, a pad and paper company bought by Bain in 1992. Bain paid $5 million upfront for the company and profited more than $100 million in debt and management fees before Ampad filed Chapter 11 in 2000 and was resold in 2003.
Randy Johnson, an Ampad factory worker affected by the takeover, once wrote Romney a handwritten letter asking him to intervene and save an Indiana factory. Romney wrote back him saying that he wanted to help but his lawyers advised him not to get involved.
Green and Debt: The True Story of Mitt Romney and Bain Capital quotes Mitt Romney regarding Bain: “I insisted on having almost dictatorial powers.”
So much for a man who doesn’t want to get involved.