Obama, Romney Camps Trade Barbs Over Bain Capital
Posted at 1:07 p.m. on May 14, 2012
President Barack Obama’s campaign launched a new attack on the role of Mitt Romney and Bain Capital in a failed Missouri steel company today — while the Romney camp returned fire by pointing to failures on Obama’s watch, including Solyndra.
The Obama campaign released a new 6-minute web ad attacking Romney’s record, particularly the profits he and Bain Capital made at a bankrupt company called GST Steel. The ad comes a week after the campaign had talked about what it said would be a largely positive $25 million ad buy in swing states.
The campaign also created a 2-minute version of the ad, which it will be running on television in Iowa, Ohio, Pennsylvania, Colorado and Virginia. The ad will run for only one day – Wednesday – during the evening news in those states, according to the Washington Post.
Stephanie Cutter, Obama’s deputy campaign manager, said Romney and Bain Capital structured deals to make money no matter what, and subsequently loaded up companies with debt and walked away with huge profits even when they failed.
Cutter said the “central premise” of the Romney campaign is “that he’s an economic wizard,” but she said the evidence shows that Romney made his money by manipulating balance sheets, not by building companies.
“His experience was about creating wealth: wealth for himself, his investors. … It wasn’t about creating jobs,” Cutter said.
The case of GST Steel – a company Bain took over when Romney was active at the company and which went bankrupt while he was on leave for the 2002 Olympics – shows Romney’s economic values, she said.
After Bain took over, the company added hundreds of millions of debt while securing Bain a big profit.
“He walked away with millions. … Workers were left without jobs, without pensions, without health care,” Cutter said. That’s not the way things are supposed to work, she said. “Most Americans know that even in the real world, you don’t walk away with millions … while workers are left holding the bag.”
David Foster, who negotiated for the GST workers, joined the conference call today and ripped Romney and Bain for setting the company up for failure while guaranteeing they were paid.
“I had to tell the hundreds of steelworkers and their families that there was little we could do. … Bain had broken its promises, underfunded its pensions, and they were on their own,” he said.
The Romney campaign, however, pointed out that at the time of the bankruptcy, Romney had long since stepped away from the day-to-day management at Bain. And Romney backers have highlighted other successes on his watch, including another steel company, Steel Dynamics; as well as investments in Staples and Sports Authority.
“We welcome the Obama campaign’s attempt to pivot back to jobs and a discussion of their failed record,” said Andrea Saul, a Romney campaign spokeswoman. “Mitt Romney helped create more jobs in his private sector experience and more jobs as Governor of Massachusetts than President Obama has for the entire nation.”
She pointed to stimulus spending that went to politically connected companies.
“President Obama has many questions to answer as to why his administration used the stimulus to reward wealthy campaign donors with taxpayer money for bad ideas like Solyndra, but 23 million Americans are still struggling to find jobs,” she said. “If the Obama administration was less concerned about pleasing their wealthy donors and more concerned about creating jobs, America would be much better off.”
And while the Obama camp accused Romney of loading up companies with debt and then extracting profits at the expense of workers, the Romney camp pointed to the record debt piled up in Obama’s first term — after he promised but has failed to cut the deficit in half.
The Obama ad also faced criticism from Steven Rattner, Obama’s auto bailout czar, who called it “unfair” and defended Bain as a responsible firm in an MSNBC interview. Rattner said that unfortunately, people do sometimes lose their jobs.
“This is part of capitalism, this is part of life, and I don’t think there is anything Bain Capital did that they need to be embarrassed about,” he said.