It looks like you're using an Ad Blocker.

Please white-list or disable in your ad-blocking tool.

Thank you.


Some features of ATS will be disabled while you continue to use an ad-blocker.


Mitt Romney’s $10 million federal bailout of Bain

page: 1

log in


posted on May, 25 2012 @ 03:33 AM
Mitt Romney’s $10 million federal bailout of Bain

According to this article which links to a Boston Globe story, Mitt Romney as chairman and CEO of Bain & Co. engineered an FDIC bailout of Bain in 1993 when the company faced bankruptcy. He engineered a Federal Bailout of his private equity firm and stuck the tab on the federal government - no wonder the banks like him so much.

[...] by convincing the Federal Deposit Insurance Corp. to forgive roughly $10 million of the company’s debts, according to sources close to the deal and federal records obtained by The Boston Globe.

The original October 25, 1994, Boston Globe article is here but is subscriber based. An excerpt reads:

Republican Senate nominee Mitt Romney's rescue of a business consulting firm was achieved in part by convincing the Federal Deposit Insurance Corp. to forgive roughly $ 10 million of the company's debts, according to sources close to the deal and federal records obtained by The Boston Globe.

Romney, whose business acumen has been the cornerstone of his campaign, has said saving the Bain & Co. consulting firm from the brink of bankruptcy in 1991 was the accomplishment that most convinced him he had the mettle to be a US senator.

Bain & Co. and the FDIC agreed to the deal after months of intense negotiations. Moreover, bankers say debt forgiveness is relatively routine when a company is at risk of collapse.

But the $ 10 million cost to the FDIC raises the question of whether Romney's success, as well as the resurrection of Bain & Co., came partially at the expense of the federal agency that protects US bank deposits.

Other sources:
Mitt Romney, who secured a $10 million federal bailout for Bain, calls Obama a 'crony capitalist'

No doubt Mitt Romney would defend that $10 million in federal aid to Bain & Co. as having prevented the bankruptcy of his firm and as having saved hundreds of jobs. But the corollary of that argument is that Mitt Romney saved Bain & Co. with a $10 million bailout from the federal government—and given that fact, he's the last person on Earth who should be accusing anybody of crony capitalism.

From the Ron Paul forums:
Romney's $10M Bain Bailout
( which includes a video mentioning the 1993 federal bailout at Bain.

Romney Benefited From a $10 Million Federal Bailout

It wasn’t really a TARP style bailout — worse — Romney‘s Bain placed a $10 million dollar liability with the taxpayers. All this while he benefited $4 million dollars directly.

In truth Romney used the FDIC to bail out his Bain acquisitions more than once, case in point GS Steel., a steel mill that Bain acquired, Romney used the FDIC to bail out it's pension fund, something that should have been the liability of Bain and not the FDIC.

Mitt Romney's Bain Capital Bailout: GOP Candidate's Firm Profited From Company That Required $44 Million Federal Bailout

Romney Benefited From Government Subsidies and Bailouts He Now Attacks

Special report: Romney's steel skeleton in the Bain closet

posted on May, 25 2012 @ 03:36 AM
Good thing Romney won't be President.

The corporation that is the USA has never needed bailing out, right? Oh wait...

posted on May, 25 2012 @ 04:10 AM
Small wonder why he always starts crying when the left brings up his time at Bain. Just wait till election time the left will easily show what kind of a scumbag he really is. As if that's something anyone with half a brain hasn't figured out already.

posted on May, 25 2012 @ 05:44 AM
My first thought was that Bain & Company and Bain Capital are not banks directly under FDIC authority.

It seems that the $10 million in question was a loan reduction on a $38 million loan at a bank under bankruptcy.

The FDIC apparently was negotiating with other debtors as well at the time.

Shady perhaps, but probably standard procedure in a case like that.

And I think FDIC insurance money primarily comes from the banks themselves.

No, Bain Did Not Get a ‘Bailout’

Facing financial duress, Bain Capital partner Mitt Romney was asked to rejoin and lead Bain & Co. as interim CEO. Bringing along two lieutenants from Bain Capital, Romney began a traveling campaign to rally employees at all Bain offices globally. Romney also negotiated a complex settlement between the Bain partnership and the firm's lenders, including a $10 million reduction in the $38 million Bain owed the Bank of New England,[10] which by that time had been seized by the FDIC and placed in Chapter 7 liquidation.

The Boston Globe pointed out that:

"Over several weeks, Romney managed negotiations with the banks and among the partners... The moment came when negotiations produced a package in which Bill Bain and the founding partners would give up control of the firm, turning back $30 million they had taken from the ESOP and $100 million in notes they held against the firm."

Bain & Company

posted on May, 25 2012 @ 08:21 AM
Bain owed Bank of New England $38 million.

Bain & Co. loans from Bank of New England date to the mid-1980s, when the economy, the bank and the consulting firm were booming….

Originally, Bain & Co. revenues were to have been used to repay the bank loans. But by 1990, with the economy slipping, it became clear Bain & Co. had overestimated its ability to repay its debts, which at that point had reached about $220 million. There also was widespread belief in the financial community that the company’s founders had overestimated the value of their firm….

With little hope for a turnaround, Bank of New England was seized by federal regulators in January 1991. Six months later, Providence-based Fleet Financial Group Inc. took possession of all the loans from Bank of New England that it believed would be repaid in full.

But rather than repay it's full debt to the bank, Bain forced the FDIC to take less:

D]ocuments obtained by the Globe show that two Bain & Co. loans, originally made by the Bank of New England, remain on the FDIC’s books today with a combined balance of $12.8 million.

The roughly $10 million forgiveness by the FDIC occurred in 1993, when Romney was chairman and chief executive of Bain & Co.

The company offered the FDIC and its other bank creditors a deal to reduce the debt, all of which accepted. In the case of the FDIC, the agency agreed to take $5.7 million less in cash, out of the original $38 million. In addition, sources said the agency calculate that the loss of interest payments as a result of the restructuring would exceed $4 million.

So he hung $10 million of Bain's owed $38 million on the FDIC. That sure looks like a bailout, one Bain didn't deserve or ever repay. Whether you call it a bailout or Romney's forcing the FDIC into forgiving $10 million in debt incurred by his company, the $10 million cost to the FDIC raises the question of whether Romney’s success and the resurrection of Bain & Co. came partially at the expense of the federal government agency that's designed to protect our bank deposits.

And what about the $44 million tab Romney stuck on the FDIC during the GS Steel takeover? Mitt and Bain bought the company but shirked it's debt off onto the FDIC, while he and Bain walked away with a $4 million pay check. Niiiiice.

Mitt Romney: The Bailout King Of American Politics

This should go without saying, but criticizing Mitt Romney is not criticizing “capitalism” or “free enterprise.” Moreover, Mitt’s not the man any conservative should want out in the public arena, defending capitalism or free enterprise as a spokesman on our behalf. Going beyond that, let me note that everything that was done at Bain Capital wasn’t worthy of praise. Instituting a leveraged takeover of a business, loading it up with debt, and making a killing off looting its assets while you put a lot of people out of work may be part of capitalism, but it’s not something that conservatives should be madly applauding.


Setting that argument aside, Mitt made big profits more than once by sticking other people with the tab.

It's this sort of thing that Romney is trying to hide and why he thinks his Bain tenure should be "off limits". Romney's been gaming the system for decades.

posted on May, 25 2012 @ 08:22 AM
This has been covered in depth in several other threads on ATS. I read one several pages long just yesterday.

posted on May, 25 2012 @ 09:35 AM
Thank you for posting this, it has gotten very little attention.

The Boston Globe article from 1994 has been long buried and forgotten, and only just resurfaced.

To the poster above, this is the first time it's been posted to this site, i've only seen posts on the steel mill Bain bought and forced the FDIC to bailout. But this was a direct bailout to Bain itself.

Mitt Romney is far more to the left of Obama on bailouts. He said in his debates he would use more bailouts for banks and he doubled down on the relaxing the rules for banks.

“Mitt Romney today stood with predatory lenders and Republicans in Congress over the middle class. He doubled down on his promise to eliminate the Wall Street watchdog and allow Wall Street to write its own rules again, leaving consumers vulnerable to hidden fees, financial traps and excessive risk taking that will hit their pocketbooks. Governor Romney has made clear he has not learned the lessons of the economic crisis, instead, he’s giving the most irresponsible financial actors a bright green light to pursue profit at any cost to communities across America.” DNC

The only real difference between this bailout and the WallStreet Bank bailouts is this one came from the FDIC and not from the taxpayers. small difference, but it was all free money for Bain and crew.

posted on May, 25 2012 @ 04:49 PM
my favorite line from conservative writer John Hawkins is

Moreover, not only did Mitt support TARP, he has admitted during the debates that he’s open to EVEN MORE bailouts. Put it all together and even Barack Obama is to Mitt’s right on bailouts.

i have more links for you -

Romney’s Skeletons: His Bain Capital Received Millions in Bailouts | SMi Blog

Mitt Romney refuses to release tax returns

Mitt the Ripper received well over 55 Million of OUR money to Bailout his own vulture Bain Capital « Investment Watch Blog – 2012

Five Ways Conservatives Will Have to Sell Their Souls if Romney Wins | Tennesseans Watching Federal & State Government

Mitt #Romney: The Bailout King Of American Politics | Right Wing News | My Marketing File

This guy should never have gotten past the gop nomination process. He took bailouts, advocates for more bailouts, and was the inventor of the "individual mandate" in Mass. health care, but above all that he is the Wall Street Banker who puts profits above all else.

posted on May, 25 2012 @ 04:53 PM
Evil Evil Romney!!!!!!

But wait for it:

President Obama Won’t Be Returning His Donations From Bain Capital

Though the Obama campaign has repeatedly attacked Mitt Romney for his career at Bain Capital, President Obama still accepted $7,500 in campaign contributions from two Bain executives. His campaign press secretary, Ben LaBolt told The Politicker the president has no intention of giving the money back.

The Hypocrisy of Obama’s Bain Bundler

As Katrina reports, Mitt Romney left Bain Capital in 1999 to manage the Winter Olympics, two years before GST Steel declared bankruptcy. But that hasn’t stopped President Obama from blaming him for the company’s 2001 collapse. In a new Obama campaign video, ex-steel workers criticize Romney for being “out of touch” with the “average working person.” Left unmentioned (and blameless) is Jonathan Lavine.

So how yall feel about Romney funding Obama with federal funds?


posted on May, 25 2012 @ 05:32 PM
reply to post by neo96

Those donations didn't come from Bain, they came from two individuals AT Bain, who are free to do as they wish with their political donations. The SuperPAC ran by Bain donated exclusively to Romney. If 2 Bain execs donated to Obama, then they must agree with his message. And 7,500 is a pittance to what they donated to Romney. In fact Romney's donations from the Banking and Financial sector dwarfs Obama's.

Bain execs spent nearly $5 million on Romney’s White House runs, records show

Overall the GOP is the hands-down favorites of the Big Wall Street Banks. Still think they are on the average working stiff's side?

92% of Wall Street Political Donations Go to The Republican Party

VIDEO: Romney Sees Surge in Wall Street Donations

So $5 million from Bain to Romney, and $7,500 to Obama.

The beauty of Obama getting 7,500 in campaign contributions from two Bain execs is that it has not bought his silence on the topic of Bain. If it had, then that would be a far more disturbing topic.

posted on May, 25 2012 @ 05:36 PM
reply to post by Blackmarketeer

Super pac's eh?

Like these ?

Seems that is not true.

posted on May, 25 2012 @ 06:00 PM
reply to post by neo96

That link doesn't show any indication of activity related to Bain Capital. Can you specify what your post is attempting to prove? All I see is a chart showing all the candidates and their contributions from SuperPACs.

The SuperPAC I was alluding to above was the "Restore our Future" SuperPAC which received it's funding from Bain Capital, which bent over backwards to conceal that funding, and which pumped all that money (and more since) specifically to Romney. Not surprising they'd give money to Romney and not my complaint, since they are his old firm, even if they did abuse the campaign contribution laws a little.

Which, by the way, brings up another point - the very invention of the "SuperPAC", which came straight from the "Conservatives" (and I use the term "conservative" very loosely here) on the Supreme Court, with their Citizens United decision. Don't like the SuperPACs and the influence of monied elites on our political process? Then thank the conservative court for handing our corporate masters a resounding victory.

But getting back to the Bain contributions, seems they've been engaged in a little hanky-panky with the 'ol transparency laws, funneling money to Romney through the Restore our Future SuperPAC;

Super PAC Transparency: Mysterious Gifts To Romney Campaign Draw Scrutiny

Last summer, Restore Our Future refused to identify the source of its first $1 million contribution. Controversy flared until the secretive donor, a retired executive from Romney's old firm, Bain Capital, stepped forward and acknowledged the donation.

In its latest financial reports listing more than $8.6 million in donations in March, the super PAC supporting Romney listed several large donations without donor identities, including the $400,000 donation and a $250,000 donation from a Montana firm, Fair Oaks Finance LLC.

They used multiple SuperPACs shuffling the funds around and disguised the contributions as coming from several individuals, when it really came from Bain Capital.

Now, as far as Obama is concerned, he got a pittance in campaign contribution from two individuals at Bain, but not through any SuperPACs, these were individual personal contributions. Let's assume these two individuals are the dissidents of their office culture. But like I said, that didn't buy Obama's silence on the subject, nor should we expect it to.

posted on May, 25 2012 @ 06:03 PM
reply to post by Blackmarketeer

That graph showed clearly who received more pac money but hey feel free to continue to bash Bain,


posted on May, 25 2012 @ 06:16 PM
Sounds like Romney was for the umpteenth time in his life, called in to fix a problem and did a remarkable job.

posted on May, 25 2012 @ 06:20 PM
reply to post by neo96

This shows that much more clearly:

Who's Who in the World of Super PACs?

The one at the top of the list is the Bain-funded SuperPAC.

Restore Our Future

What? A conservative group founded by several former Mitt Romney aides to help Romney's presidential campaign. The founders include Romney's former general counsel, Charles R. Spies; Carl Forti, political director for Romney's 2008 campaign; and Larry McCarthy, a member of Romney's 2008 media team.

Total Money Raised? $12.2 million

Donors? Many of the donors are CEOs or individuals affiliated with Bain Capital, the company where Romney was the former CEO. Recently the media has focused on W Spann LLC, a company that donated $1 million to the super PAC and then disbanded shortly thereafter. The donor behind the company turned out to be longtime Romney donor and former Bain Capital executive, Edward Conard. There have also been calls by watchdog groups Democracy 21 and Campaign Legal Center to investigate two other companies: Eli Publishing and F8 LLC. These two corporations, which also donated $1 million a piece to Restore Our Future, are reported ly linked to employees of Nu Skin, a skin care company based in Utah.

PS: None of this changes the fact that Romney was a recipient of a bailout (from the FDIC) on more than one occasion, yet decried bailouts as "crony capitalism".

posted on May, 25 2012 @ 06:28 PM
Romney claims that he is massively against bailouts.

However, a bailout is pretty much almost exactly what a venture capitalist investment is. They throw a bunch of money at a company, and it sinks or swims with the extra cash infusion.

If it swims, they are the first to be paid out. If it sinks, they are paid out ahead of any other creditor.

posted on May, 25 2012 @ 06:41 PM
reply to post by buster2010

Not possible , he is a Republican. Republicans are for the free market and not picking winners and losers via bailouts.

What are you going to say next , That Romney as a Republican also implemented a government mandated healthcare system. Haha, that would be funny.

If that was the case he would not be the GOP front runner as no republican would would pick him to be there front runner.

posted on Nov, 17 2012 @ 10:59 AM
Citing a post on LinkedIn, by Craig:

The issue with *some* VC firms is not that they are willing to risk their money in return for a big payoff if a. Company can take off, but that firms like Bain (look to the recent articles in Rolling Stone for details) put up a pittance of the value, borrowed the rest, take over the target (either in cooperation or via hostile tactics), transfer the acquired debt to the target, and eventually, because of the high cost of that acquired debt, are forced into liquidation Two Bain-related firms in New England that were shuttered that come to mind are Friendly's restaurants and K-B Toys.

Wow. Just wow.

From "David" on same site:

VC's gamble on startups to get a 200:1 return ratio. Most do not take off, but a few startups do. If a startup fails, someone extracts the IP in the startup to cover some of their investment. Bain, however, takes viable businesses and pumps them up with debt, until they can be put on the stock market and the investors can exit and take their profits offshore. The lenders are making money along the way. The investors avoid paying taxes.

edit on 17-11-2012 by buddhasystem because: (no reason given)

new topics

top topics


log in