The left likes to paint Mitt Romney’s Bain Capital as a vulture corporation, taking over failing businesses, giving bad advice and then profiting off the bones. Romney likes to paint Bain as an enabler of dreams for small businesses that have hit a rough patch. But when Romney’s campaign threw the “We Built It” mantle over its shoulders, it should have remembered a time when Bain Capital was only saved from bankruptcy by forcing the government to bail it out.
If the Obama campaign had the power to go back in time and orchestrate a troubling episode in Mitt Romney’s past, it might look something like this: Romney’s Bain & Co. gets itself into deep debt when it spins off Bain Capital, Romney’s private equity company. Romney is asked to come back and save the company. He obliges. The parent company comes so close to bankruptcy — an embarrassing prospect for a consulting firm that is meant to tell other companies how to avoid doing things like go bankrupt — that it has to make a special deal with the banks to which it owes money, including one that had recently been taken over by the FDIC, the federal government’s agency that saves troubled banks.
Then it gets bad. Romney being Romney cleverly inserts a clause into the agreement that would give Bain executives first dibs on any cash left over if Bain goes under, ensuring they get big bonuses, even if all the rest of the employees are fired and the creditors are wiped out. This makes bankruptcy an undesirable option for the banks and the federal government. Meanwhile, the chairman of the FDIC happens to be Bill Seidman, who had served as finance chair for Romney’s father’s presidential campaign. Twisting arms and calling in favors, Romney negotiates a deal that saves Bain and his reputation, and screws the government in the process — forced bailout.
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