Romney accused of getting a ‘bailout’
Old ad questions business dealing
Mitt Romney got a foretaste yesterday of the double edge of his business experience in his attempt to establish himself as a better manager of the economy than either President Obama or his rivals for the Republican nomination.
Politico released an ad left over from Romney’s unsuccessful Senate race against Senator Edward M. Kennedy that takes Romney to task for a $10 million loan forgiveness granted in 1993 to his Bain & Co. by the Federal Deposit Insurance Corp. The Kennedy camp’s ad, based on a 1994 Globe story, blasts Romney for using a “federal bailout’’ to save troubled Bain & Co.
Romney spokesman Ryan Williams said, “President Obama can’t match Mitt Romney’s record and experience as a businessman and entrepreneur. Democrats are going to do everything in their power to attack Mitt Romney and distract voters from the fact that President Obama’s economic program has failed and that nearly 2.5 million jobs have been lost on his watch. It’s not going to work.’’
The ad, which was never broadcast, was released to Politico by a former Kennedy strategist. The ad contends Bain & Co., the consulting firm Romney was trying to save from the brink of bankruptcy, “was rescued with a federal bailout of $10 million’’ and that Romney and others “made $4 million on this deal.’’
According to the 1994 article, Romney basically negotiated about a $10 million reduction in the $38 million the firm owed the failed Bank of New England, which had been taken over by the FDIC, a federal agency funded by insurance premiums paid by banks. The $4 million represented interest the firm did not have to pay as a result of the loan forgiveness, the Globe reported. Other Bain & Co. creditors also agreed to debt reductions.
“Bankers say debt forgiveness is relatively routine when a company is at risk of collapse,’’ the Globe article said.
A former Kennedy adviser told Politico the ad never aired because the Kennedy campaign had already damaged Romney with charges that Bain Capital, the spinoff venture capital firm he helped found, had cut jobs at a company it had purchased.
Release of the ad prompted Ron Paul’s campaign chairman, Jesse Benton, to say, “This is more evidence that the so-called ‘front-runners’ from the establishment represent more of the status quo that American voters are tired of - people who benefit from government bailouts on the taxpayers’ dime and seek office to help their buddies do the same.’’
Aides with two other GOP campaigns were reluctant to get their candidates in the middle of the issue.
It remains unclear how much of an impact the ad will have on voters. Bill Powers, a Republican accountant from Portsmouth, N.H., who heard Romney speak there yesterday morning, said he admires Romney’s business record at Bain and is not swayed by accounts of layoffs or other incidents. Bain’s accomplishments include a deal that led to the opening of the Staples office supply chain. “Anyone can look at a stupid thing he said, one bad business decision,’’ Powers said. “You have to look at the entire business.’’
While campaigning yesterday in Derry, N.H., Romney continued to stress the theme of economic and political freedom and small government. “When government steps in and tries to run something for us, they generally don’t do it as well as free competition does,’’ he said.
Ultimately, Romney said the election will come down to the economy. “The person who can beat Barack Obama is the person who has more credibility on the economy than he has, and I do.’’
Shira Schoenberg can be reached at firstname.lastname@example.org. Brian Mooney of the Globe staff also contributed to this article.