I know nobody will actually bother to read the Rolling Stone article this hit piece in Salon is based on, but they should. Did Bain Capital and by extension Mitt Romney receive a government bailout? Did Bain receive any money from taxpayers?
The answer is a simple NO.
First,the company in question is not Bain Capital, but Bain and Company. Second, Romney was brought in after Bill Bain and other investors drained all the money out of the little company.
The trouble began in 1984, when Bain & Company spun off Bain Capital to engage in leveraged buyouts and put Romney in charge of the new operation. To free up money to invest in the new business, founder Bill Bain and his partners cashed out much of their stock in the consulting firm – leaving it saddled with about $200 million in debt. (Romney, though not a founder, reportedly profited from the deal.) "People will tell you that Bill raped the place clean, was greedy, didn't know when to stop," a former Bain consultant later conceded. "Did they take too much out of the firm? You bet."The company was left with loans with 4 banks. Meaning, Bain and Company already received the money. Bain and Company would have been able to pay them back but Bill Bain took all the money.
Romney moved decisively, and his early efforts appeared promising. He persuaded the founders to return $25 million of the cash they had raided from Bain & Company and forgive $75 million in debt, in return for protection from most future liabilities. Romney then consolidated Bain's massive debts into a single, binding loan agreement with four banks, which received liens on Bain's assets and agreed to delay repayments on the firm's debts for two years.So Romney negotiated repayments. The fact the FDIC came in and took over one of those banks means nothing but that bank was poorly managed otherwise the FDIC wouldn't have had to take control. The FDIC nor the government gave one red cent to Bain or Romney. Quite the contrary, the FDIC got all the assets of the bank for free. One of those assets was the Bain and Company loan.
Yes, they forgave $10 million of that loan, but Bain and Company also paid them $14 million, $14 million the government never gave them. In other words, the government profited. They were able to earn money on a loan they never made.
Doesn't sound like such a bad deal.
I also love the bits trying to blame Romney for the portions of the loan that guaranteed competitive bonuses. The 4 banks negotiated with Romney at any point any one of them could have said no to that provision. They found it acceptable. But yes, let's blame Romney.
The federal government also signed off on the deal, since the FDIC had recently taken control of a bank that was owed $30.6 million by Bain. Romney assured creditors that the restructuring would enable Bain to "operate normally, compensate its professionals competitively" and, ultimately, pay off its debts.Did Romney have connections within the FDIC? It's possible if you want to play six degrees of separation and assume Romney knew every person that worked on his father's presidential campaign, but even then how do you explain the other three banks willingness to sign on to the deal?
If anything, this story reinforces how great a problem solver Romney really is. He saved a company left destitute by its former management.
Let's also not forget the employees at Bain and Company pay taxes, and thanks to Romney continue to pay taxes to this day. Something tells me, even if you make the leap that forgiving $10 million in debt they never loaned by the FDIC equals a government bailout, the tax revenues that decision has netted far exceeds its cost.
Meanwhile, let's look at Obama public equity record... you know Solyndra and the other dozen companies that received billions of taxpayer dollars and went out of business.