Tuesday, January 24, 2012
15 Tea Party Caucus freshmen rake in $3.5 million in first 9 months in Washington
Congress
By Aaron Mehta and Bob Biersack
On her website, Rep. Diane Black asks constituents to join advisory panels in her Tennessee district. “I believe the best ideas to solve our nation’s problems will come from people like you,” Black writes, “not Washington bureaucrats and special interest groups.”
Black is one of the new Republicans who rode a wave of anti-Washington sentiment into town in 2011, a self-identified member of the tea party wing that has been cast as a new kind of conservative— fiery, unwilling to compromise and determined to downsize the government. But while many say Black and her companions have created a split in the Republican Party, it is not visible among the companies and interest groups that are donating to members of Congress.
A joint analysis by iWatch News and the Center for Responsive Politics has found that the 15 freshmen members of the Tea Party Caucus have embraced many of the same special interests that have supported Republicans for years. The fifteen combined have received over $3,450,000 during the first three quarters of this year from almost 700 different PACs.
It’s an impressive haul for a group of newly elected House members. But it shouldn’t be surprising that these fresh faces found new friends in Washington.
“Business as usual,” says Mary Boyle of good-government group Common Cause. “The lobbyists and other traditional Washington powers know that the newbies will learn fast that they need them, and their rolodexes.”
It may well be, but some of the freshmen appear to have their eyes wide open.
FACT CHECK: Facts Strained in ‘King of Bain’
Pro-Gingrich super PAC offers one-sided, distorted view of Romney’s years at Bain Capital
By FactCheck.Org
Updated:
A 28-minute political documentary released this week by a pro-Newt Gingrich super PAC presents a one-sided, often distorted and misleading view of Mitt Romney’s years leading the venture capital firm Bain Capital.
Interspersed with appropriately eerie music, the video focuses on four Bain-financed companies and features heart-wrenching interviews with people who portray Romney and Bain as ruthless, quick-buck corporate raiders who reaped huge financial rewards at the expense of faithful employees.
But a closer look at the companies highlighted in the video reveals a murkier picture. The video often overstates, or outright distorts, Romney’s culpability for job losses or bankruptcies.
We have twice knocked Romney for his unsupported and highly questionable claim that “net-net” he created 100,000 jobs while at Bain. There’s no thorough count of the jobs gained and lost in all the companies in which Bain invested. And Romney is taking credit for all of the present day jobs at some of the companies, even when there were other investors involved in the deals, executives who launched or ran the companies, and new owners altogether in later years.
A Wall Street Journal analysis of 77 businesses Bain invested in while Romney led the firm found that 22 percent either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested (although in many cases, that was after Bain had parted with the companies).
Romney acknowledges that not every Bain deal was a hit, that some investments went bad and ended in bankruptcy, while others led to layoffs.
”Sometimes the medicine is a little bitter but it is necessary to save the life of the patient,” Romney told the New York Times in 2007. ”My job was to try and make the enterprise successful, and in my view the best security a family can have is that the business they work for is strong.”
Bain was “never interested in driving companies out of business,” said Howard Anderson, a professor at MIT’s Sloan School of Management, “and certainly to portray that as their modus operandi is unfair and inaccurate.”
“The goal here was to create wealth,” Anderson said. “Jobs were the byproduct, not the product.”
Bain has lots of success stories, like Staples and Sports Authority, Anderson said. “But sometimes, it doesn’t work out as you plan and they go out of business,” he said. “On day one, they all look good, like the first day of baseball. … All in all, Bain is a remarkable company.”
“Their overall performance was terrific,” concurred Steven Neil Kaplan, a professor at the University of Chicago Booth School of Business. “He’s got lots of deals that worked.”
The truth about jobs gained or lost — or the number of companies that blossomed or went bankrupt — during Romney’s tenure at Bain is much more complicated and nuanced than either Romney or the documentary suggest.
There’s an interesting history to how the 28-minute film reached the public this week.
The New York Times reported that the film was produced by Barry Bennett, a former consultant to a super PAC that supports Texas Gov. Rick Perry. Bennett said the material for the movie came from opposition research he purchased from one of Romney’s Republican opponents in the 2008 presidential election.
Bennett tapped filmmaker Jason Killian Meath to direct the movie. Meath, the Times noted, worked on the Romney campaign in 2008. According to the Times, pro-Perry super PAC Make Us Great Again took a pass on the video, as did the Jon Huntsman campaign.
Ultimately, Politico reported, it was purchased by pro-Gingrich super PAC Winning Our Future, thanks to a $5 million donation from casino mogul Sheldon Adelson, a longtime Gingrich supporter and benefactor.
DDi: Rumors of Death Greatly Exaggerated
In the summer of 2003, then-Gov. Mitt Romney’s name showed up in headlines in Massachusetts when Bain Capital surfaced in a federal securities investigation that alleged Lehman Brothers had improperly inflated the value of stock in the Bain-financed DDi Corporation, an Anaheim, Calif., maker of printed circuit boards.
The Winning Our Future video (starting at about the 10:00 mark) seizes on that deal as a “striking example” of the “Bain Way” with “Romney’s Bain Capital almost always managing to turn the misfortunes of others into their own enormous gains.”
The video paints a portrait of a Romney/Bain takeover of DDi that included a quick dump of hundreds of employees, and the insinuation that Romney/Bain influenced a Lehman Brothers analyst to issue a favorable stock rating so Bain could reap huge profits and escape before causing the company to tank. There are a number of inaccuracies in that story line, starting with a glaring hole in the time line. Romneyleft Bain in early 1999 to run the Winter Olympics, before the layoffs at DDi and before Bain took the company public (though as part of a retirement agreement Romney negotiated with his former partners, he has continued to profit from Bain’s deals).
A closer examination of Romney’s and Bain’s involvement in DDi is a good case study in how murky it can be to assess credit or blame in these Bain deals for political purposes.
With an investment of $40.5 million, Bain Capital — with Romney at the helm — led a group of venture capital firms that purchased a controlling interest in DDi Corp. in 1996. According to the “King of Bain” video: “A signature of Romney’s Bain Way strategy, employees were quickly fired in order to pump up profits.” It’s true that in December 1999, DDi shuttered its Colorado facility andfired 275 employees as part of a consolidation with operations in Texas. Given that Bain made its initial investment nearly three years before that, though, it’s a stretch to claim “employees were quickly fired in order to pump up profits.” And again, Romney had left Bain in February 1999, prior to the layoffs.
Moreover, DDi Corp. CEO Mikel Williams noted that DDi grew very rapidly during the years of Bain’s involvement. The company had revenues of $59.4 million in 1995 — the year before the investments by Bain — and four years later, revenues topped $290 million. According to a 2003 story in theOrange County Register, DDi reached a payroll peak with 3,700 employees in 2000.
“No doubt that growth, which was very rapid, was fueled by the investments from the capital markets, not only Bain,” Williams told FactCheck.org in a phone interview.
Now, about the public stock sale. Here’s how the “King of Bain” video describes things:
As the Orange County Register reported, it’s true — as the video states — that Bain sold some of its DDi stock in October 2000, making $39 million when the stock was as $22.50. That cut Bain’s stake in DDi to 22 percent. Bain sold even more of its stock in February 2001, raising $54 million when the stock was selling at $26.48 per share. That reduced Bain’s stake in DDi to 14 percent. Together, the two sales more than doubled Bain’s initial investment from 1996. In May 2001, Romney sold his personal shares in DDi for $4.1 million, when the price was $22.90 a share. Two years later, the stock had plummeted to 10 cents a share.
The video notes that an SEC investigation “uncovered evidence that Lehman Brothers continued to encourage investors to buy DDi stock, even though they had misgivings themselves.”
In August 2003, the Boston Globe reported that an SEC probe alleged that Lehman Brothers improperly inflated DDi’s stock rating in order to win investment-banking business. According to theSEC settlement agreement, an unnamed Lehman Brothers analyst sent an e-mail to his boss in June 2000 saying that “DDi and parent (Bain Capital), and bankers” were pressuring him to issue a favorable rating for the stock. Despite the analyst expressing misgivings, Lehman gave the stock its highest 1-Buy rating and a target price of $36. The Boston Globe noted that the stock traded at $22.5 per share two days after the rating, and closed a month later at $22, “but not before it reached more than $30 a share in mid-July.” Bain and Romney cashed out long before the DDi stock tanked, but it was well after the immediate spike in stock price following the Lehman recommendation.
The SEC never alleged any wrongdoing by Romney, nor was anyone at Bain Capital or DDi cited with any violations. Lehman Brothers paid $80 million to settle the SEC charges that it had manipulated stock recommendations for five companies, including DDi, though it did not admit or deny guilt.
For his part, Romney denied having any involvement at all in the deal. Romney was quoted in theBoston Globe on Aug. 23, 2003, saying, “I left Bain long before the events.”
The Winning Our Future video suggests, however, that it found smoking-gun evidence to the contrary. But did it?
We asked two experts in venture capital if the SEC filing cited in the Winning Our Future video proves Romney was involved with running DDi at the time of the firings and IPO offering. Both said absolutely not.
“As far as I can tell, he had no involvement,” said Steven Neil Kaplan, a professor at the University of Chicago Booth School of Business.
Romney was not listed among the directors, executive officers and key employees in the registration statement filed with the SEC in preparation for DDi’s IPO offering (though five other Bain executives were). Nor was he named in subsequent proxy statements filed with the SEC as a member of DDi’s board of directors.
“When a private equity firm is involved with a company, typically the people who have the influence and information are people on the board,” Kaplan said. “To say that he has anything to do with that company at that time is wrong, in my experience.”
“DDi is a bad example” to use in an ad attacking Romney, Kaplan said.
“Once he left active management of the company, whatever happens after that, he’s an investor, or at most a silent partner,” said Howard Anderson, a professor at MIT’s Sloan School of Management. “When Mitt left, he left the day-to-day management to his partners.”
There’s one other highly misleading aspect to the DDi segment. After highlighting the allegations of improper stock inflation, and that Bain quickly sold its stock for a large profit, the video then immediately cuts to the downward spiral of DDi, as if Bain’s stock sales were the cause.
Said current DDi CEO Williams: “We went through a difficult period, no doubt about it, when the entire tech market had a downturn.”
The DDi segment of the video ends with DDi in bankruptcy. But that’s not the end of the story.
DDi didn’t remain in bankruptcy long. Its debt was restructured, and it maintained operations. Today, DDi is in “good shape,” Williams reports. The company is profitable. It is paying dividends, and it has 1,600 employees.
“To have us portrayed as some slash-and-burn straw game is frustrating,” Williams said.
In fact, he argued, DDi could be held up as an American manufacturing success story. In 2000, Williams said, there were 2,000 printed circuit board manufacturers, most of them in the U.S. or Canada. Now, he said, there are 350 at most. DDi is the second largest.
If not for the investments by Bain and others all those years ago, he said, “We wouldn’t be where we are today. We wouldn’t have the 1,600 jobs we have now in North America.”
In fact, he said, they might not be in business at all.
The Winning Our Future video also makes a questionable claim about how much Bain profited from buying KB Toys. “Mitt Romney and Bain saw a 900 percent return on their investment,” the video said, citing a “2006 court filing.”
The 900 percent figure is an allegation made by the toy seller’s creditors in a suit against Bain. Forbes andthe New York Times put the profit margin at 370 percent.
The video also employs some creative editing when it comes to Romney’s use of the phrase “creative destruction.” That’s an economic term referring to what happens when new types of industry replace old ones, a sometimes painful process that can cost jobs.
After showing an image of a young boy watching TV news accounts of KB Toys filing for bankruptcy, the film says: “Romney called it ‘creative destruction,’ ” suggesting that “it” refers to the destruction of KB Toys. The film immediately cuts to a clip of Romney talking about “creative destruction” that is edited this way: “Creative destruction does enhance productivity. For an economy to thrive, and as ours does, there are a lot of people who will suffer as a result of that.”
Romney, who was speaking at Emory University on a book tour in 2010, was responding to the host’s question about helping people who were laid off. He wasn’t talking about KB Toys. His full quote:
Another untrue claim: “Romney and Bain’s profits, at the expense of 15,000 jobs, was described by the Boston Herald as ‘disgusting.’ ” The newspaper didn’t describe anything as “disgusting.” Rather, it quoted a laid-off KB Toys’ employee as saying Bain executives made “disgusting” profits. The article also doesn’t mention Romney or 15,000 jobs. The 15,000 jobs figure came from a 2009 ABC News article reporting on KB Toys’ second filing for bankruptcy and its plan to close all of its stores. However, a Reuters article put the number at 10,850, saying that more than half of those workers were seasonal.
KB Toys emerged from bankruptcy in 2005, but went back into bankruptcy and liquidated its stock in2008. Toys R Us purchased the KB Toys brand name for $2.1 million, but the company itself is out of business.
Romney left Bain Capital less than one year later inFebruary 1999 to work on the 2002 Winter Olympics in Salt Lake City. He never returned to Bain. Romney “formally transferred his ownership of Bain Capital Inc. to other partners” in 2001, according to the New York Times. At the time, the factory in Marianna was open and continued to make washing machines. In 2001, Alliance Laundry added approximately 75 jobs to the Marianna plant when it closed its Cincinnati facility. At this point, Alliance had about 1,600 employees — about 200 fewer than when Bain purchased it in 1998.
In December 2004, Alliance Laundry announced that it had agreed to sell the company, including its UniMac division, to Teachers’ Private Capital, the private equity division of the Ontario Teachers’ Pension Plan, for $450 million. That private equity house, not Bain, closed the Marianna factory and moved the UniMac line to the facilities in Wisconsin. That decision was announced in October 2005, and the plant closed in August 2006.
So, did Romney and Bain upend UniMac’s operations and gut its employees, as the film contends? The Florida factory did not close, nor were the majority of its workers laid off, by either Romney or Bain Capital. Both Baxley and Tommy Jones lost their jobs in 2006, when the factory closed, not under Bain, as the ad implies. The two men started up their own washing machine repair service, Washers-R-Us, using the skills acquired in the Marianna factory.
Ultimately, the strike — which started Sept. 1, 1994, just two months before the Kennedy-Romney election — resulted in the plant closing in February 1995. More than 200 people lost their jobs. The ex-workers’ stories in the Winning Our Future film are powerful and heartfelt, and for the most part true, with one caveat. Romney was on leave from Bain when it purchased SCM Office Supplies and was not part of AmPad’s management team — despite a claim in the film to the contrary.
Romney officially announced he would run for Senate on Feb. 2, 1994. AmPad bought SCM Office Supplies Inc., a subsidiary of Smith Corona, in July 1994. The labor problems started almost immediately after the sale.
Under the terms of the sale agreement on file with the Securities and Exchange Commission, AmPad did not have to honor the “bargaining agreement with the Union.” The Boston Globereported that “within hours [AmPad] released some 250 plant workers” at the Indiana plant. The workers had to reapply for jobs, the Globe reported, and all but 58 returned. But not for long. The plant closed seven months after the sale and five months after the strike began.
An ex-worker in the film says, “The man who was in charge of AmPad Corporation at that time was Mitt Romney.” That’s not true. Romney was on a leave of absence from Bain during the purchase of SCM Office Supplies and the subsequent strike. During the 1994 election when the plant strike became a campaign issue, AmPad’s president, Charles Hanson, told the Globe that Romney was “not involved in the operation of his company,” and did not sit on the company’s board of directors.
However, Bain had three executives on the board — including Marc B. Wolpow, a former managing director at Bain who told the Los Angeles Times that Romney could have prevented the closing of the Indiana plant, which occurred after the 1994 election and after Romney returned to his job at Bain.
However, AmPad debt grew even faster. The Globe reported that by 1999 “Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings.” The Wall Street Journal reported that Bain turned a profit of $102 million on a $5 million investment in AmPad. TheGlobe wrote that Bain made millions in management fees and acquisition fees, as well as tens of millions from the initial public offering. AmPad defaulted on its debt and filed for bankruptcy inJanuary 2000. At that time, Bain agreed to reduce its annual management fee from $2 million to $1.5 million. By December 2000, the company ceased public trading. At the time, Bain held about 35 percent of the company’s stock, which was now worthless.
AmPad emerged from bankruptcy in 2003 under the ownership of Crescent Capital Investments. The company had 3,198 full-time employees when it went public and 3,834 full-time employeeswhen it filed for bankruptcy, SEC documents show. It is now owned by Esselte, a privately owned company headquartered in Connecticut. We tried to obtain current employment figures for AmPad from Esselte, but have yet to hear back from the company. If we do, we will update this item.
“I am calling for the Winning Our Future Super-PAC supporting me to either edit its ‘King of Bain’ advertisement and movie to remove its inaccuracies, or to pull it off the air and off the internet entirely,” Gingrich wrote.
But it’s a two-way street, Gingrich wrote, and “I am once again calling on Governor Romney to issue a similar call for the Super-PAC supporting him to edit or remove its ads which have been shown to contain gross inaccuracies, something the Governor has thus far refused to do.”
Meanwhile, President Barack Obama’s deputy campaign manager, Stephanie Cutter, ripped out a four-page memo calling Romney a “corporate raider” at Bain.
“Taking advantage of an uneven playing field, where there was one rulebook for those at the top and another for everyone else, Mitt Romney and his friends made money hand over fist while working families lost their grip on the middle-class lifestyle they earned,” Cutter wrote.
In other words, if Romney wins the GOP nomination, expect to be hearing a lot more about Romney’s time at Bain.
– Robert Farley, Ben Finley, Scott Blackburn and Eugene Kiely
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Interspersed with appropriately eerie music, the video focuses on four Bain-financed companies and features heart-wrenching interviews with people who portray Romney and Bain as ruthless, quick-buck corporate raiders who reaped huge financial rewards at the expense of faithful employees.
But a closer look at the companies highlighted in the video reveals a murkier picture. The video often overstates, or outright distorts, Romney’s culpability for job losses or bankruptcies.
- The film talks about layoffs at DDi Corp. and discusses questionable manipulation of stock prices after the circuit board company went public. But Romney had left Bain Capital a year before any layoffs and a public stock offering that ultimately netted Bain and Romney a big payday. The company’s subsequent bankruptcy filing came two years after Bain had largely divested from the company, and was the result of the dot-com bust. Moreover, the company emerged from bankruptcy, and its current CEO credits those early Bain investments for setting the foundation for the company’s current success.
- The film claims Romney was involved in the acquisition, management and demise of the now-defunct KB Toys. He wasn’t. Bain bought the toy company nearly two years after Romney left Bain.
- Likewise, the closing of UniMac’s plant in Marianna, Fla., occurred seven years after Romney left Bain and nearly two years after Bain sold UniMac’s parent company to another private equity house.
We have twice knocked Romney for his unsupported and highly questionable claim that “net-net” he created 100,000 jobs while at Bain. There’s no thorough count of the jobs gained and lost in all the companies in which Bain invested. And Romney is taking credit for all of the present day jobs at some of the companies, even when there were other investors involved in the deals, executives who launched or ran the companies, and new owners altogether in later years.
A Wall Street Journal analysis of 77 businesses Bain invested in while Romney led the firm found that 22 percent either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested (although in many cases, that was after Bain had parted with the companies).
Romney acknowledges that not every Bain deal was a hit, that some investments went bad and ended in bankruptcy, while others led to layoffs.
”Sometimes the medicine is a little bitter but it is necessary to save the life of the patient,” Romney told the New York Times in 2007. ”My job was to try and make the enterprise successful, and in my view the best security a family can have is that the business they work for is strong.”
Bain was “never interested in driving companies out of business,” said Howard Anderson, a professor at MIT’s Sloan School of Management, “and certainly to portray that as their modus operandi is unfair and inaccurate.”
“The goal here was to create wealth,” Anderson said. “Jobs were the byproduct, not the product.”
Bain has lots of success stories, like Staples and Sports Authority, Anderson said. “But sometimes, it doesn’t work out as you plan and they go out of business,” he said. “On day one, they all look good, like the first day of baseball. … All in all, Bain is a remarkable company.”
“Their overall performance was terrific,” concurred Steven Neil Kaplan, a professor at the University of Chicago Booth School of Business. “He’s got lots of deals that worked.”
The truth about jobs gained or lost — or the number of companies that blossomed or went bankrupt — during Romney’s tenure at Bain is much more complicated and nuanced than either Romney or the documentary suggest.
The Making of ‘King of Bain’
Mitt Romney. Was he a job creator or a corporate raider?
That's the question this film answers.
And it’s not pretty.
Mitt Romney was not a capitalist during his reign at Bain. He was a predatory corporate raider. His firm didn't seek to create value. Instead, like a scavenger, Romney looked for businesses he could pick apart. Indeed, he represented the worst possible kind of predator, operating within the law but well outside the bounds of what most real capitalists consider ethical.
He is exhibit number one the left wants to use in the coming election to give capitalism a bad name.
He and his friends at Bain were bad guys. Any real capitalists should disavow Romney's ‘creative destruction’ model that made him wealthy at the expense of thousands of American jobs.
Mitt Romney and his cronies pioneered ‘deindustrialization,’ a process by which they searched out vulnerable companies, took them over, loaded them with debt, and collected obscene fees while doing so. He sent jobs overseas or killed them altogether, and then picked apart the remains - including pension funds - before the companies went bankrupt.
Some might call that the free market. Most of us think its just plain wrong.
If you wonder why America has lost so many manufacturing jobs overseas, look no further than Mitt Romney – the King of Bain.
Think you know Mitt?
Think again . . .
There’s an interesting history to how the 28-minute film reached the public this week.
The New York Times reported that the film was produced by Barry Bennett, a former consultant to a super PAC that supports Texas Gov. Rick Perry. Bennett said the material for the movie came from opposition research he purchased from one of Romney’s Republican opponents in the 2008 presidential election.
Bennett tapped filmmaker Jason Killian Meath to direct the movie. Meath, the Times noted, worked on the Romney campaign in 2008. According to the Times, pro-Perry super PAC Make Us Great Again took a pass on the video, as did the Jon Huntsman campaign.
Ultimately, Politico reported, it was purchased by pro-Gingrich super PAC Winning Our Future, thanks to a $5 million donation from casino mogul Sheldon Adelson, a longtime Gingrich supporter and benefactor.
DDi: Rumors of Death Greatly Exaggerated
In the summer of 2003, then-Gov. Mitt Romney’s name showed up in headlines in Massachusetts when Bain Capital surfaced in a federal securities investigation that alleged Lehman Brothers had improperly inflated the value of stock in the Bain-financed DDi Corporation, an Anaheim, Calif., maker of printed circuit boards.
The Winning Our Future video (starting at about the 10:00 mark) seizes on that deal as a “striking example” of the “Bain Way” with “Romney’s Bain Capital almost always managing to turn the misfortunes of others into their own enormous gains.”
The video paints a portrait of a Romney/Bain takeover of DDi that included a quick dump of hundreds of employees, and the insinuation that Romney/Bain influenced a Lehman Brothers analyst to issue a favorable stock rating so Bain could reap huge profits and escape before causing the company to tank. There are a number of inaccuracies in that story line, starting with a glaring hole in the time line. Romneyleft Bain in early 1999 to run the Winter Olympics, before the layoffs at DDi and before Bain took the company public (though as part of a retirement agreement Romney negotiated with his former partners, he has continued to profit from Bain’s deals).
A closer examination of Romney’s and Bain’s involvement in DDi is a good case study in how murky it can be to assess credit or blame in these Bain deals for political purposes.
With an investment of $40.5 million, Bain Capital — with Romney at the helm — led a group of venture capital firms that purchased a controlling interest in DDi Corp. in 1996. According to the “King of Bain” video: “A signature of Romney’s Bain Way strategy, employees were quickly fired in order to pump up profits.” It’s true that in December 1999, DDi shuttered its Colorado facility andfired 275 employees as part of a consolidation with operations in Texas. Given that Bain made its initial investment nearly three years before that, though, it’s a stretch to claim “employees were quickly fired in order to pump up profits.” And again, Romney had left Bain in February 1999, prior to the layoffs.
Moreover, DDi Corp. CEO Mikel Williams noted that DDi grew very rapidly during the years of Bain’s involvement. The company had revenues of $59.4 million in 1995 — the year before the investments by Bain — and four years later, revenues topped $290 million. According to a 2003 story in theOrange County Register, DDi reached a payroll peak with 3,700 employees in 2000.
“No doubt that growth, which was very rapid, was fueled by the investments from the capital markets, not only Bain,” Williams told FactCheck.org in a phone interview.
Now, about the public stock sale. Here’s how the “King of Bain” video describes things:
King of Bain: With help from their friends at Wall Street’s Lehman Brothers, Bain was set to offer an initial public offering of stock in DDi. Lehman Brothers would issue a buy rating. And Romney and Bain would watch investors swarm.If he was watching at all, Romney was watching from afar. DDi offered a public sale of its stock on the Nasdaq in April 2000, more than a year after Romney had left Bain to head up the Olympic Organizing Committee. With an initial price of $14 a share, the IPO sale raised $170 million for DDi. Six months later, Bain began to cash out.
As the Orange County Register reported, it’s true — as the video states — that Bain sold some of its DDi stock in October 2000, making $39 million when the stock was as $22.50. That cut Bain’s stake in DDi to 22 percent. Bain sold even more of its stock in February 2001, raising $54 million when the stock was selling at $26.48 per share. That reduced Bain’s stake in DDi to 14 percent. Together, the two sales more than doubled Bain’s initial investment from 1996. In May 2001, Romney sold his personal shares in DDi for $4.1 million, when the price was $22.90 a share. Two years later, the stock had plummeted to 10 cents a share.
The video notes that an SEC investigation “uncovered evidence that Lehman Brothers continued to encourage investors to buy DDi stock, even though they had misgivings themselves.”
In August 2003, the Boston Globe reported that an SEC probe alleged that Lehman Brothers improperly inflated DDi’s stock rating in order to win investment-banking business. According to theSEC settlement agreement, an unnamed Lehman Brothers analyst sent an e-mail to his boss in June 2000 saying that “DDi and parent (Bain Capital), and bankers” were pressuring him to issue a favorable rating for the stock. Despite the analyst expressing misgivings, Lehman gave the stock its highest 1-Buy rating and a target price of $36. The Boston Globe noted that the stock traded at $22.5 per share two days after the rating, and closed a month later at $22, “but not before it reached more than $30 a share in mid-July.” Bain and Romney cashed out long before the DDi stock tanked, but it was well after the immediate spike in stock price following the Lehman recommendation.
The SEC never alleged any wrongdoing by Romney, nor was anyone at Bain Capital or DDi cited with any violations. Lehman Brothers paid $80 million to settle the SEC charges that it had manipulated stock recommendations for five companies, including DDi, though it did not admit or deny guilt.
For his part, Romney denied having any involvement at all in the deal. Romney was quoted in theBoston Globe on Aug. 23, 2003, saying, “I left Bain long before the events.”
The Winning Our Future video suggests, however, that it found smoking-gun evidence to the contrary. But did it?
King of Bain: But SEC filings prove otherwise. During the DDi deal, Romney is listed as a member of the Management Committee of Bain Capital, with control of over 1.3 million shares of DDi Corporation.A May 10, 2001, filing with the SEC does show that Romney was a member of the Management Committee of a Bain trust that held over 1 million shares of DDi stock. But Bain maintains that Romney held no operational role at Bain after leaving, and that “the fund management committee listing was just a legacy signatory role that involved no actual decision-making capabilities,” according to a CNN report.
We asked two experts in venture capital if the SEC filing cited in the Winning Our Future video proves Romney was involved with running DDi at the time of the firings and IPO offering. Both said absolutely not.
“As far as I can tell, he had no involvement,” said Steven Neil Kaplan, a professor at the University of Chicago Booth School of Business.
Romney was not listed among the directors, executive officers and key employees in the registration statement filed with the SEC in preparation for DDi’s IPO offering (though five other Bain executives were). Nor was he named in subsequent proxy statements filed with the SEC as a member of DDi’s board of directors.
“When a private equity firm is involved with a company, typically the people who have the influence and information are people on the board,” Kaplan said. “To say that he has anything to do with that company at that time is wrong, in my experience.”
“DDi is a bad example” to use in an ad attacking Romney, Kaplan said.
“Once he left active management of the company, whatever happens after that, he’s an investor, or at most a silent partner,” said Howard Anderson, a professor at MIT’s Sloan School of Management. “When Mitt left, he left the day-to-day management to his partners.”
There’s one other highly misleading aspect to the DDi segment. After highlighting the allegations of improper stock inflation, and that Bain quickly sold its stock for a large profit, the video then immediately cuts to the downward spiral of DDi, as if Bain’s stock sales were the cause.
King of Bain: DDi ended up losing $400 million. A little over two years later, the stock was nearly worthless. The result, DDi filed for bankruptcy; 2,100 jobs were lost. Average investors without insider connections were left with huge losses.In fact, the company simply fell victim to the dot-com bust. On August, 23, 2003, the Orange County Register reported: “At least $2 billion in stock value and money owed to creditors has been wiped out as a slump in the electronics industry and price-slashing by competitors in Asia helped force DDi to seek bankruptcy protection last week.”
Said current DDi CEO Williams: “We went through a difficult period, no doubt about it, when the entire tech market had a downturn.”
The DDi segment of the video ends with DDi in bankruptcy. But that’s not the end of the story.
DDi didn’t remain in bankruptcy long. Its debt was restructured, and it maintained operations. Today, DDi is in “good shape,” Williams reports. The company is profitable. It is paying dividends, and it has 1,600 employees.
“To have us portrayed as some slash-and-burn straw game is frustrating,” Williams said.
In fact, he argued, DDi could be held up as an American manufacturing success story. In 2000, Williams said, there were 2,000 printed circuit board manufacturers, most of them in the U.S. or Canada. Now, he said, there are 350 at most. DDi is the second largest.
If not for the investments by Bain and others all those years ago, he said, “We wouldn’t be where we are today. We wouldn’t have the 1,600 jobs we have now in North America.”
In fact, he said, they might not be in business at all.
KB Toys: A Distorted Toy Story
The video’s two minutes on KB Toys includes falsehoods, incorrect quotes and creative video editing. The segment’s biggest deception is its sole focus: claiming Romney was involved with the acquisition, management and demise of the now-defunct KB Toys. He wasn’t. Bain bought the toy company after Romney left Bain.King of Bain: Romney and Bain bought the 80-year-old company in 2000, loaded KB toys with millions in debt, then used the money to repurchase Bain’s stock. The debt was too staggering. By 2004, 365 stores had closed.As we mentioned above, the former Massachusetts governor left Bain in February 1999, almost two years before the firm bought KB Toys in December 2000. (Romney still may have benefited from the transaction. In a retirement agreement he negotiated with his former partners, Romney has continued to profit from Bain’s deals.)
The Winning Our Future video also makes a questionable claim about how much Bain profited from buying KB Toys. “Mitt Romney and Bain saw a 900 percent return on their investment,” the video said, citing a “2006 court filing.”
The 900 percent figure is an allegation made by the toy seller’s creditors in a suit against Bain. Forbes andthe New York Times put the profit margin at 370 percent.
The video also employs some creative editing when it comes to Romney’s use of the phrase “creative destruction.” That’s an economic term referring to what happens when new types of industry replace old ones, a sometimes painful process that can cost jobs.
After showing an image of a young boy watching TV news accounts of KB Toys filing for bankruptcy, the film says: “Romney called it ‘creative destruction,’ ” suggesting that “it” refers to the destruction of KB Toys. The film immediately cuts to a clip of Romney talking about “creative destruction” that is edited this way: “Creative destruction does enhance productivity. For an economy to thrive, and as ours does, there are a lot of people who will suffer as a result of that.”
Romney, who was speaking at Emory University on a book tour in 2010, was responding to the host’s question about helping people who were laid off. He wasn’t talking about KB Toys. His full quote:
Romney, March 30, 2010: "I think it’s important to underscore something, which is that economists and business people can acknowledge that creative destruction does enhance productivity and raise the standards of living of the people of a society. That sounds great. Except creative destruction does not sound real good if it happens to you. And for an economy to thrive, as ours does, there a lot of people who will suffer as a result of that."The video also cites a Tampa Tribune article when it makes this claim about Bain’s profits from KB Toys: “Romney and other top executives’ take: $120 million.” But the article doesn’t mention Romney, and it said the $120 million went to “Bain and KB managers,” not just Bain. The $120 million figure comes from a lawsuit creditors filed against Bain — which received $85 million of the $120 million.
Another untrue claim: “Romney and Bain’s profits, at the expense of 15,000 jobs, was described by the Boston Herald as ‘disgusting.’ ” The newspaper didn’t describe anything as “disgusting.” Rather, it quoted a laid-off KB Toys’ employee as saying Bain executives made “disgusting” profits. The article also doesn’t mention Romney or 15,000 jobs. The 15,000 jobs figure came from a 2009 ABC News article reporting on KB Toys’ second filing for bankruptcy and its plan to close all of its stores. However, a Reuters article put the number at 10,850, saying that more than half of those workers were seasonal.
KB Toys emerged from bankruptcy in 2005, but went back into bankruptcy and liquidated its stock in2008. Toys R Us purchased the KB Toys brand name for $2.1 million, but the company itself is out of business.
UniMac: Who’s to Blame for Plant Closure?
The film starts in Marianna, Fla., at a factory owned by UniMac, a commercial washing machine manufacturer. Three former employees — Mike Baxley and Tracy and Tommy Jones — talk about what happened to them after Bain acquired the company. The film’s narrator blames Romney and Bain for the plant closing in 2006, saying: “Romney and Bain upended the company and gutted the workforce.” But that’s misleading:- Romney’s involvement in the company was minimal. Bain agreed to purchase UniMac’s parent company, Raytheon Commercial Laundry, in February 1998, and the deal was finalized in May of that year. Romney left Bain in February 1999.
- Bain sold the parent company of UniMac, which was renamed Alliance Laundry Systems, to another private equity company in 2004. It was the new owner, not Bain, that closed the Marianna factory in August 2006 and moved its operations to Ripon, Wisc.
- About 400 jobs were lost in Marianna, but 250 jobs were added at the Ripon plant.
Romney left Bain Capital less than one year later inFebruary 1999 to work on the 2002 Winter Olympics in Salt Lake City. He never returned to Bain. Romney “formally transferred his ownership of Bain Capital Inc. to other partners” in 2001, according to the New York Times. At the time, the factory in Marianna was open and continued to make washing machines. In 2001, Alliance Laundry added approximately 75 jobs to the Marianna plant when it closed its Cincinnati facility. At this point, Alliance had about 1,600 employees — about 200 fewer than when Bain purchased it in 1998.
In December 2004, Alliance Laundry announced that it had agreed to sell the company, including its UniMac division, to Teachers’ Private Capital, the private equity division of the Ontario Teachers’ Pension Plan, for $450 million. That private equity house, not Bain, closed the Marianna factory and moved the UniMac line to the facilities in Wisconsin. That decision was announced in October 2005, and the plant closed in August 2006.
So, did Romney and Bain upend UniMac’s operations and gut its employees, as the film contends? The Florida factory did not close, nor were the majority of its workers laid off, by either Romney or Bain Capital. Both Baxley and Tommy Jones lost their jobs in 2006, when the factory closed, not under Bain, as the ad implies. The two men started up their own washing machine repair service, Washers-R-Us, using the skills acquired in the Marianna factory.
Washers-R-Us: We both spent many years helping distributors service the Alliance products. … In 2006 Alliance announced that their factory in Marianna was being moved to Ripon, WI and many people were looking for jobs. This included Tommy and Mike and thus Washers-R-Us was born as a company.There was probably some net job loss when Bain owned UniMac, but the commercial laundry sector as a whole experienced job loss during that time. The total workforce in the commercial laundry sector fell from 4,204 employees in 1999 to 3,025 workers in 2002.
AmPad: Bain’s Big Payoff
The film also revisits the closing of a paper products plant in Indiana — an incident that first dogged Romney during his failed 1994 campaign for U.S. Senate. In that race, Sen. Ted Kennedy ran a TV ad featuring striking plant workers at SCM Office Supplies talking about cuts in jobs, benefits and pay after AmPad Corp., a Bain company, took over.Ultimately, the strike — which started Sept. 1, 1994, just two months before the Kennedy-Romney election — resulted in the plant closing in February 1995. More than 200 people lost their jobs. The ex-workers’ stories in the Winning Our Future film are powerful and heartfelt, and for the most part true, with one caveat. Romney was on leave from Bain when it purchased SCM Office Supplies and was not part of AmPad’s management team — despite a claim in the film to the contrary.
Romney officially announced he would run for Senate on Feb. 2, 1994. AmPad bought SCM Office Supplies Inc., a subsidiary of Smith Corona, in July 1994. The labor problems started almost immediately after the sale.
Under the terms of the sale agreement on file with the Securities and Exchange Commission, AmPad did not have to honor the “bargaining agreement with the Union.” The Boston Globereported that “within hours [AmPad] released some 250 plant workers” at the Indiana plant. The workers had to reapply for jobs, the Globe reported, and all but 58 returned. But not for long. The plant closed seven months after the sale and five months after the strike began.
An ex-worker in the film says, “The man who was in charge of AmPad Corporation at that time was Mitt Romney.” That’s not true. Romney was on a leave of absence from Bain during the purchase of SCM Office Supplies and the subsequent strike. During the 1994 election when the plant strike became a campaign issue, AmPad’s president, Charles Hanson, told the Globe that Romney was “not involved in the operation of his company,” and did not sit on the company’s board of directors.
However, Bain had three executives on the board — including Marc B. Wolpow, a former managing director at Bain who told the Los Angeles Times that Romney could have prevented the closing of the Indiana plant, which occurred after the 1994 election and after Romney returned to his job at Bain.
Los Angeles Times, Dec. 16, 2007: “He was in charge,” recalled Wolpow, now co-director of the Audax Group, another private equity group. “He could have ordered me to settle with the union. He didn’t order me to do that. He let me make decisions that would maximize the value of the investment. That was the right business decision as CEO of Bain Capital. But let’s not pretend it was something else.”Despite its labor problems in Indiana, AmPad thrived under Bain — at least at first. When it went public in June 1996, AmPad reported that sales had grown at an annual rate of 34 percent every year since 1992, when Bain purchased the company from the Mead Corp. In 1995, the company’s net sales were $617.2 million — up from $108 million in 1991.
However, AmPad debt grew even faster. The Globe reported that by 1999 “Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings.” The Wall Street Journal reported that Bain turned a profit of $102 million on a $5 million investment in AmPad. TheGlobe wrote that Bain made millions in management fees and acquisition fees, as well as tens of millions from the initial public offering. AmPad defaulted on its debt and filed for bankruptcy inJanuary 2000. At that time, Bain agreed to reduce its annual management fee from $2 million to $1.5 million. By December 2000, the company ceased public trading. At the time, Bain held about 35 percent of the company’s stock, which was now worthless.
AmPad emerged from bankruptcy in 2003 under the ownership of Crescent Capital Investments. The company had 3,198 full-time employees when it went public and 3,834 full-time employeeswhen it filed for bankruptcy, SEC documents show. It is now owned by Esselte, a privately owned company headquartered in Connecticut. We tried to obtain current employment figures for AmPad from Esselte, but have yet to hear back from the company. If we do, we will update this item.
Gingrich to PAC: Edit Out Inaccuracies
Two days after the release of the Winning Our Future video, Gingrich released a statement calling on his super PAC to edit any inaccuracies out of the film.“I am calling for the Winning Our Future Super-PAC supporting me to either edit its ‘King of Bain’ advertisement and movie to remove its inaccuracies, or to pull it off the air and off the internet entirely,” Gingrich wrote.
But it’s a two-way street, Gingrich wrote, and “I am once again calling on Governor Romney to issue a similar call for the Super-PAC supporting him to edit or remove its ads which have been shown to contain gross inaccuracies, something the Governor has thus far refused to do.”
Meanwhile, President Barack Obama’s deputy campaign manager, Stephanie Cutter, ripped out a four-page memo calling Romney a “corporate raider” at Bain.
“Taking advantage of an uneven playing field, where there was one rulebook for those at the top and another for everyone else, Mitt Romney and his friends made money hand over fist while working families lost their grip on the middle-class lifestyle they earned,” Cutter wrote.
In other words, if Romney wins the GOP nomination, expect to be hearing a lot more about Romney’s time at Bain.
– Robert Farley, Ben Finley, Scott Blackburn and Eugene Kiely
Sources
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Securities and Exchange Commission. Proxy Statement: DDi Corp. 30 Apr 2001.
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Big Lots Stores Inc. v. Bain Capital. Court of Chancery of Delaware. 28 Mar 2006.
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FACT CHECK: Flubs in Florida
Facts took a beating in Monday's GOP candidate debate
By FactCheck.Org
Updated:
The four remaining candidates debated once again, this time in Tampa, Florida — where facts took a beating.
Mitt Romney falsely claimed the Navy is smaller now than at any time since the start of World War I. (It had fewer ships as recently as four years ago.) And Newt Gingrich again claimed credit for balancing federal budgets that were voted on after he left the House.
The event was sponsored in part by NBC News, which broadcast it. We noted these incorrect or misleading claims:
According to the Defense Department’s Naval History and Heritage Command, there were 342 total active ships as of April 6, 1917, when the U.S. entered World War I. And there were 285 total active ships as of Sept. 30, 2011, the most recent month for which figures are available. So it’s true that the Navy has fewer ships now than it did then — but not fewer than at “any time” since then.
There were fewer active ships at the end of fiscal years 2005, 2006, 2007 and 2008, as follows:
The federal government had four consecutive balanced budgets from fiscal years 1998 to 2001. Gingrich announced in November 1998 that he would resign as speaker. He left the House in January 1999. He was speaker when Congress passed federal budgets in fiscal years 1998 and 1999, but not 2000 and 2001.
But the nonpartisan Congressional Budget Office has estimated that the Patient Protection and Affordable Care Act will reduce yearly deficits — by $119 billion over the 2012-2019 period — not add to them. Earlier this month at a debate in New Hampshire, Romney phrased this claim differently, saying that repealing the health care law would save “$95 billion a year.” That figure is the amount of new spending required by the law, but Romney didn’t factor in spending cuts and revenue provisions that, according to CBO, would more than cover the cost of the legislation.
This time, Romney took his claim a step further, wrongly saying that the law would increase the debt, not just spending. In fact, the CBO has said that the deficit would increase if the health care law was repealed, as Romney proposes.
As for the stimulus, the 2009 measure cost an estimated $825 billion. But Romney’s claim that it “didn’t create private-sector jobs” is wrong, according to nearly all economic estimates and the nonpartisan Congressional Budget Office. CBO states that at its peak, in the third quarter of 2010, there were between 0.7 million and 3.6 million more people working than would have been the case without the stimulus.
And some portion of those jobs were private-sector jobs. Since the stimulus was signed in February 2009, overall employment by federal, state and local government has gone down — by more than 600,000 jobs — not up.
In February 2010, Obama’s proposed budget for NASA called for killing Bush’s plan to return to the moon. In an April 15, 2010, speech in Florida, Obama unveiled his proposal for a deep-space exploration plan that included the goals of landing on an asteroid by 2025 and orbiting Mars by the middle of the 2030s — with the ultimate goal of landing on Mars. The proposal caused a rift among some of NASA’s most famous astronauts, with Neil Armstrong opposing it and Buzz Aldrin supporting it, as the Los Angeles Times reported at the time.
Nevertheless, Obama’s plans are moving forward. NASA announced a design for the heavy-lift launch vehicle that would make it possible to go beyond the Earth’s orbit. In making the announcement on the design plans, NASA administrator Charles Bolden said: “President Obama challenged us to be bold and dream big, and that’s exactly what we are doing at NASA. While I was proud to fly on the space shuttle, tomorrow’s explorers will now dream of one day walking on Mars.”
– by Eugene Kiely, Brooks Jackson, D’Angelo Gore and Lori Robertson
Mitt Romney falsely claimed the Navy is smaller now than at any time since the start of World War I. (It had fewer ships as recently as four years ago.) And Newt Gingrich again claimed credit for balancing federal budgets that were voted on after he left the House.
The event was sponsored in part by NBC News, which broadcast it. We noted these incorrect or misleading claims:
Romney flunks naval history
Romney claimed that “our Navy is now smaller than any time since 1917.” That’s not true — at least as measured by the number of active-duty ships. There are more Navy ships now than during the last four years of George W. Bush’s presidency.According to the Defense Department’s Naval History and Heritage Command, there were 342 total active ships as of April 6, 1917, when the U.S. entered World War I. And there were 285 total active ships as of Sept. 30, 2011, the most recent month for which figures are available. So it’s true that the Navy has fewer ships now than it did then — but not fewer than at “any time” since then.
There were fewer active ships at the end of fiscal years 2005, 2006, 2007 and 2008, as follows:
- 282 as of Sept. 30, 2005
- 281 as of Sept. 30, 2006
- 278 as of Sept. 30, 2007
- 282 as of Sept. 30, 2008
Gingrich on balanced budgets
Gingrich wrongly claimed “that, when I was speaker, we had four consecutive balanced budgets.” Only two of the four occurred while Gingrich was speaker.Gingrich: "Well, first of all, the case I make is that, when I was speaker, we had four consecutive balanced budgets, the only time in your lifetime, Brian, that we’ve had four consecutive balanced budgets. Most people think that’s good."This boast is something that we have refuted numerous times. He has claimed to have “helped” balance the federal budget for four consecutive years. This time, he went beyond that in claiming that all four occurred under his watch as speaker of the House.
The federal government had four consecutive balanced budgets from fiscal years 1998 to 2001. Gingrich announced in November 1998 that he would resign as speaker. He left the House in January 1999. He was speaker when Congress passed federal budgets in fiscal years 1998 and 1999, but not 2000 and 2001.
Romney: Gingrich resigned ‘in disgrace’
In a tense exchange early in the evening, Romney claimed Gingrich had resigned “in disgrace” after the House (including most Republicans) voted to reprimand him and penalize him $300,000 on January 17, 1997. In fact, as Gingrich later correctly noted, he didn’t announce his resignation until nearly two years later, on Nov. 5, 1998. His ouster was prompted by a poor showing in the 1998 elections, in which the GOP lost five House seats. It was the first time since 1934 that the party holding the White House had gained seats in a midterm election. That, more than any lingering effects of the ethics case, caused Gingrich to lose the support of his Republican colleagues in the House.Romney wrong on ‘Obamacare’ and deficit
Romney continued his attacks on the federal health care law, saying that the country has $15 trillion in debt and President Obama “adds another trillion on top for Obamacare and for his stimulus plan that didn’t create private-sector jobs.”But the nonpartisan Congressional Budget Office has estimated that the Patient Protection and Affordable Care Act will reduce yearly deficits — by $119 billion over the 2012-2019 period — not add to them. Earlier this month at a debate in New Hampshire, Romney phrased this claim differently, saying that repealing the health care law would save “$95 billion a year.” That figure is the amount of new spending required by the law, but Romney didn’t factor in spending cuts and revenue provisions that, according to CBO, would more than cover the cost of the legislation.
This time, Romney took his claim a step further, wrongly saying that the law would increase the debt, not just spending. In fact, the CBO has said that the deficit would increase if the health care law was repealed, as Romney proposes.
As for the stimulus, the 2009 measure cost an estimated $825 billion. But Romney’s claim that it “didn’t create private-sector jobs” is wrong, according to nearly all economic estimates and the nonpartisan Congressional Budget Office. CBO states that at its peak, in the third quarter of 2010, there were between 0.7 million and 3.6 million more people working than would have been the case without the stimulus.
And some portion of those jobs were private-sector jobs. Since the stimulus was signed in February 2009, overall employment by federal, state and local government has gone down — by more than 600,000 jobs — not up.
Romney wrong on NASA
Romney went too far when he claimed that Obama has “no plans” for NASA. Obama in 2010 set in motion a plan to build a heavy-lift launch vehicle to go beyond the Earth’s orbit. The president’s plan calls on NASA to land astronauts on an asteroid by 2025, orbit Mars by the mid-2030s and, ultimately, land on Mars.Romney: "His plans for NASA, he has no plans for NASA. The space coast is — is struggling. This president has failed the people of Florida."Some background: President Bush announced in January 2004 that he would retire the Shuttle program and return to the moon by 2020. The Shuttle program ended last year, leading to job losses along the so-called “space coast.” The question facing Obama early in his administration was whether he would continue Bush’s plan for NASA or come up with his own. Obama proposed a new course.
In February 2010, Obama’s proposed budget for NASA called for killing Bush’s plan to return to the moon. In an April 15, 2010, speech in Florida, Obama unveiled his proposal for a deep-space exploration plan that included the goals of landing on an asteroid by 2025 and orbiting Mars by the middle of the 2030s — with the ultimate goal of landing on Mars. The proposal caused a rift among some of NASA’s most famous astronauts, with Neil Armstrong opposing it and Buzz Aldrin supporting it, as the Los Angeles Times reported at the time.
Nevertheless, Obama’s plans are moving forward. NASA announced a design for the heavy-lift launch vehicle that would make it possible to go beyond the Earth’s orbit. In making the announcement on the design plans, NASA administrator Charles Bolden said: “President Obama challenged us to be bold and dream big, and that’s exactly what we are doing at NASA. While I was proud to fly on the space shuttle, tomorrow’s explorers will now dream of one day walking on Mars.”
– by Eugene Kiely, Brooks Jackson, D’Angelo Gore and Lori Robertson
Where The Hell Are All The Women?
Hillary’s historic run left “18 million cracks in the glass ceiling”
So where are the other female politicians who should be looking to shatter it? Here’s the real reason efforts to get women to run in greater numbers have largely failed—until now. Around a table at Phoenix hot spot Switch, a half dozen mostly young women had gathered for a strategy session of Emerge Arizona, the four-year-old political leadership training group that works to elect Democratic women to political office. With its hip wine bar and organic menu, Switch shares a parking lot with Durant’s, the longtime red-meat watering hole of state capital legislators and lobbyists. Which is not to say the state’s female political operatives don’t hang out there; goodness knows during my two decades heading Planned Parenthood in this conservative capital, I ate my share of Durant’s rib eye, medium.
But politics is, inescapably, about relationships. So when Phoenix Mayor Phil Gordon materialized from the shadows to shake hands, I understood why we were meeting here: Emerge wanted to be seen in plan-hatching mode. Picking Switch over Durant’s signaled the group’s intent to become the new face of politics.
They have a long way to go. Of the 10 candidates Emerge Arizona fielded during its first try in 2006, only three won, though “three others lost by less than 1,000 votes,” touts the group’s executive director, Dana Kennedy. Like Krista Pacion (“Pacion for the people”), 32, who campaigned for the state House of Representatives on, yes, Rollerblades across her sprawling rural district, all seven losing candidates plan to run again. Meanwhile, they’re attending party precinct meetings and doing the unsexy nuts-and-bolts work that builds name recognition and fund-raising contacts. One immediate payoff, according to Kennedy: “Six of us were elected delegates to the Democratic National Convention in Denver.”
In this historic election year, we can’t talk about women running for political office without considering the importance of being Hillary, who nearly won her party’s presidential nomination. But despite Clinton’s groundbreaking run, Nancy Pelosi’s preeminence as the first woman Speaker of the U.S. House of Representatives, and women like Secretary of State Condoleezza Rice holding top administrative positions, the dial for women in political leadership has moved excruciatingly slowly, from 3 percent of Congress in 1979 to 16 percent in 2008. Ninety-two years after Jeannette Rankin of Montana became the first woman elected to the House, America stacks up an embarrassing eighty-fourth among nations in the proportion of women holding national legislative office—far behind Rwanda, Austria, and Cuba. Men run City Hall in 90 of 100 largest cities; women make up just 16 percent of state governors and less than a quarter of state legislators. Even though women comprise the majority of voters, men, by and large, still decide the laws that govern our lives, from war and peace and equal pay policies to reproductive freedom. Just what is standing in the way of gender equality in political leadership? Where are all the women in this so-called representative democracy, and why aren’t they running?
Where The Hell Are All The Women?
Hillary’s historic run left “18 million cracks in the glass ceiling”
By Virginia Sole-Smith
Do all roads lead to Sarah Brewer? If you’re a female power player in DC, a helluva lot of them do; the American University lecturer you probably never heard of has formidable ties to Hillary Clinton, Kay Bailey Hutchison, Nancy Pelosi, and scores of other slightly less boldface but still very influential Washington women politicos.
In our survey of influence and power in the capital, we discovered that Brewer is a hub of ideas and policy, as is, not surprisingly, Clinton. The junior senator from New York’s 40-odd years in politics earn her the Most Connected Award (not always happily; the battle scars of the primary season have left her with more frenemies than any other woman charted). Coming in only a hair behind Clinton is Arianna Huffington, whose combined Huffington Post—helming, partygoing and -throwing, and incomprehensible levels of energy (she’s on the board of the Renaissance Weekends and headlines the annual “Take Back America” conference; she publishes a daily online newspaper; she ran for California governor against Arnold Schwarzenegger; she writes books) make her the doyenne of DC West. She, along with Pelosi, the San Franciscan Speaker of the House, even rated viciously funny impersonations by the comedienne Tracey Ullman. In fact, California girls are doing much political moving and shaking. Huffington’s pal, the Los Angeles-based environmentalist Laurie David—whom Maureen Dowd, anticipating a fun fight, mischievously introduced to Karl Rove at the 2007 White House Correspondents’ Dinner—advised Clinton and Barack Obama on global warming. California First Lady Maria Shriver famously broke with her husband and some Kennedy cousins in HRC’s camp to back Obama. Maybe the new administration should think about setting up a bureau out in L.A., where the fun and money are!
Whichever administration enters Washington in January, it will be doing business with the women on this power grid—dominated by Democrats but not to exclusion. Cathy McMorris Rodgers, Republican congresswoman from Washington, earned endorsements from Jessica Grounds’ and Sarah Brewer’s Women Under Forty Political Action Committee (and got a congratulatory call from Pelosi when her baby was born). Kay Bailey Hutchison, Republican senator from Texas, has ties to Anne Wexler, the most powerful female lobbyist in DC, who gave Clinton her first political job, on George McGovern’s campaign. (And according to Wonkette, Hutchison “treats Hillary like she’s just one of the girls.”)
You will notice that while Claire McCaskill and Clinton are in this network, it’s not for their vice presidential potential. John McCain famously described the duties of that job as “to inquire daily as to the health of the president and…to attend the funerals of third-world dictators.” Dick Cheney aside, that doesn’t sound too powerful, does it? Nor did we include women whose influence derives from being married to it. The women in this web—legislators and pollsters, journalists and academics, policy wonks and talk show hosts (if the medium is the message, Oprah Winfrey remains the go-to girl for any ambitious politician)—all work for their Washington muscle. And if you really want to know who’s got juice in DC, watch who walks into the restaurant Citronelle, and take note of where Mel Davis seats them.
Keystone XL pipeline rejection a setback for Canadian tar sands development
By Corbin Hiar
An Omaha protester who opposes the Keystone XL pipeline because of environmental reasons. Nati Harnik/AP Photo
The Obama administration's decision
Wednesday to reject a pipeline that would have carried crude from
Canada’s tar sands deposits to Texas oil refineries isn’t likely to end
investment in the carbon-rich fuel, industry analysts say.
In killing the controversial Keystone XL pipeline, President Obama blamed congressional Republicans, who he said “forced this decision” by requiring an expedited 60-day review of the pipeline as a provision of the recent payroll tax extension.
Obama also reaffirmed his support for domestic oil and gas exploration and expanding fossil fuel infrastructure. “In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security,” he said.
But industry analysts question this rationale. “If your objective is improving our energy security, then Keystone should have been built,” said Sarah Emerson, president of Energy Security Analysis, Inc., an energy forecasting firm.
Environmentalists have reason to temper their excitement over the pipeline's defeat. They opposed pipeline builder TransCanada's project because of fears about spills and the climate-change implications of refining tar sands, which give off more carbon dixoide than traditional crude oil. But Obama threw his support behind additional U.S. drilling. And analysts say production of tar sands in Canada will continue.
“Is it a setback? Yes,” Emerson said. “Does it spell the end of the oil sands development? No.”
She predicts that America’s northern neighbor will go forward with a stalled pipeline to its Pacific coast. “I suspect that [Canada looks] at this as a rejection and they’ll say ‘OK, well, you don’t want our oil? We’ll sell it to China.’”
In killing the controversial Keystone XL pipeline, President Obama blamed congressional Republicans, who he said “forced this decision” by requiring an expedited 60-day review of the pipeline as a provision of the recent payroll tax extension.
Obama also reaffirmed his support for domestic oil and gas exploration and expanding fossil fuel infrastructure. “In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security,” he said.
But industry analysts question this rationale. “If your objective is improving our energy security, then Keystone should have been built,” said Sarah Emerson, president of Energy Security Analysis, Inc., an energy forecasting firm.
Environmentalists have reason to temper their excitement over the pipeline's defeat. They opposed pipeline builder TransCanada's project because of fears about spills and the climate-change implications of refining tar sands, which give off more carbon dixoide than traditional crude oil. But Obama threw his support behind additional U.S. drilling. And analysts say production of tar sands in Canada will continue.
“Is it a setback? Yes,” Emerson said. “Does it spell the end of the oil sands development? No.”
She predicts that America’s northern neighbor will go forward with a stalled pipeline to its Pacific coast. “I suspect that [Canada looks] at this as a rejection and they’ll say ‘OK, well, you don’t want our oil? We’ll sell it to China.’”
Democracy 21 President Attacks Supreme Court Majority for One of Worst Decisions in Court’s History
Statement of Democracy 21 President Fred Wertheimer
On January 21, 2010, two years ago, five Supreme Court Justices issued a radical decision in the Citizens United case that is now wreaking havoc on the 2012 elections. The Citizens United decision has done enormous damage to our political system and our democracy.
The Citizens United decision fundamentally undermined the nation’s anti-corruption campaign finance laws.
The decision is beyond extreme in explicitly stating that the ability of the country to be protected from the corruption of our government is outweighed by the right of a corporation to make unlimited expenditures to influence elections. The decision is beyond the pale in flatly stating that it is perfectly OK to use campaign money to buy influence over our elected representatives in Washington.
The Founding Fathers were well aware of the dangers of corruption when they wrote the Constitution. The Court’s extreme position in Citizens United notwithstanding, the Founders did not create an overriding right for corporations that would leave the new nation unable to protect itself from corruption.
The five Justices who voted for the Citizens United decision – Chief Justice John Roberts and Justices Anthony Kennedy, Antonin Scalia, Clarence Thomas and Samuel Alito – will go down in history for issuing one of the worst and most misguided decisions in the history of the Supreme Court.
Citizens must and will overcome the damage done to the country by five Supreme Court Justices who valued the right of corporations to influence elections over the right of citizens to be protected from corruption of their government.
In the end, the Citizens United decision will not stand the test of time and history.
The eloquent dissenting opinion in Citizens United written by Justice John Stevens on behalf of four Justices will one day become the Supreme Court’s majority position.
A glance at Mitt Romney's Tax Returns for 2010 and 2011
The Links below will take you to my scrib account where you will see Romney's two tax returns, which he states is all he is showing.
INTRODUCTION
Mitt and Ann Romney have released their 2010 tax return and an estimate of their 2011 return, thus offering extensive information about their personal finances.
In approaching Romney’s taxes, a number of key points should be kept in mind.
First, as a successful businessman, Governor Romney has not only added value to our economy through his investment and business activity, but he has paid millions in taxes every year to the U.S. government.
Second, the Romneys take to heart “to whom much is given, of him shall much be required.” Accordingly, they have been extraordinarily generous in their charitable giving, donating over $7 million from 2010-2011, averaging over 16% of their income.
Third, Mitt Romney has been scrupulous about observing the requirements of the tax code. His income is reported and taxed in full compliance with U.S. law, and he has paid 100 percent of what he has owed. His good name means everything to him. Throughout his life in this and in other matters, he has conducted his personal and business affairs so as to be beyond reproach.
Governor Romney is proud of his success and of the accomplishments that created value for society as a whole and contributed to the generation of more than 100,000 jobs.
He favors a set of economic policies that will enable every American to get ahead through education, hard work, and a willingness to take risks. Accordingly, he opposes higher taxes that discourage investment and kill jobs. He believes that the tax code needs to be simpler, flatter and fairer. As President, he would work hard to make America once again a country where everyone who takes initiative can flourish.
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