Romney faces criticism over Bain 'bailout' ad
Presidential hopeful Mitt Romney got a taste today of criticism he is likely to face for his work with Bain & Co. when this ad from 17 years ago surfaced. This ad was never aired during the 1994 campaign when Republican Mitt Romney unsuccessfully challenged Democratic incumbent Senator Edward M. Kennedy. It 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."
The Bain & Co. story was reported in the Globe in 1994. Romney basically negotiated about a $10 million reduction in the $38 million the firm owed failed Bank of New England, which had been taken over by the Federal Deposit Insurance Corp., 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.
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.