Group says Romney foes give private equity industry a bad name
Escalating criticism by political foes of Republican presidential candidate Mitt Romney for his work at Bain Capital is unfairly giving private equity a bad name, an industry trade association said Monday.
“There is a lot of misinformation being spread, purely for political purposes and on both sides of the aisle, as it pertains to private equity, said Steve Judge, interim head of the Private Equity Growth Capital Council. “While the business model has evolved over time, the fact of the matter is private equity provides capital and operational expertise to companies that are often underperforming or on the brink of failure.”
Romney has been under fire from Republican rivals as well as Democrats for his record as co-founder of Bain Capital, a private equity firm that made him rich but also presided over job cuts at several companies.
“There’s nothing wrong with being successful and making money. That’s the American dream,” GOP presidential candidate Rick Perry said during a campaign stop in South Carolina on Monday. “But there is something inherently wrong with getting rich off failure and sticking it to someone else.”
The political action committee Winning Our Future, which backs Republican candidate Newt Gingrich, has launched ads criticizing Romney’s time at Bain. And Democratic and liberal groups also have piled on.
“Romney’s Bain Capital Made Billions While Bankrupting Nearly One-Quarter of the Companies It Invested In,” was the headline Monday from Think Progress.
The attacks have been fueled by in-depth stories in The Times and elsewhere in recent weeks examining Romney’s record at Bain after he’s been touting his job-creation credentials.
“Bain expanded many of the companies it acquired,” The Times reported in December. “But like other leveraged-buyout firms, Romney and his team also maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits. Sometimes Bain investors gained even when companies slid into bankruptcy.”
Romney has been defending himself from the attacks, but he appeared to slip up Monday in saying that he liked to fire people who provide services to him as an incentive for others to provide better service.
The Private Equity Growth Capital Council is worried about the image the public is getting from all the attacks. It released a fact sheet Monday. And Judge said the industry, which invested $150 billion in U.S. companies in 2010, plays an important role in the economy, including “delivering more than a trillion dollars in investment returns to pension funds, endowments and charitable foundations,” he said.
