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December 19, 2011 10:35 AM Romney still profiting from Bain era

By Steve Benen

We know a fair amount about Mitt Romney’s tenure at his private-equity firm, Bain Capital, where he was a successful vulture capitalist, breaking up companies and laying off American workers. By all appearances, Romney had considerable success orchestrating leveraged buyouts, seeking taxpayer subsidies, flipping companies quickly for large profits, and making money for investors “even when companies slid into bankruptcy.”

What we didn’t know is that Romney is still making an enormous amount of money from the firm he left more than a decade ago. The New York Times has a fascinating report on this today.

Almost 13 years ago, Mitt Romney left Bain Capital, the successful private equity firm he had helped start, and moved to Utah to rescue the Salt Lake City Olympic Games and begin a second career in public life.

Yet when it came to his considerable personal wealth, Mr. Romney never really left Bain.

In what would be the final deal of his private equity career, he negotiated a retirement agreement with his former partners that has paid him a share of Bain’s profits ever since, bringing the Romney family millions of dollars in income each year and bolstering the fortune that has helped finance Mr. Romney’s political aspirations.

The arrangement allowed Mr. Romney to pursue his career in public life while enjoying much of the financial upside of being a Bain partner as the company grew into a global investing behemoth.

Perhaps those jokes Romney told about being “unemployed” weren’t such a good idea. We are, after all, talking about a guy who inherited great wealth, then got even wealthier laying off thousands of Americans, and then continued to get even wealthier still thanks to seven-figure checks from his former firm.

Wait, it gets worse. Romney apparently continues to receive these millions and pays a lower tax rate than the middle class pays on their income thanks to “a tax provision favorable to hedge fund and private equity managers” — a break Romney intends to keep if elected.

A law professor who studies financial firms told the Times, “These are options that are not available to the ordinary taxpayer. You continue to take your carried interest — a return on labor, not capital invested — and you’re paying 15 percent on it instead of high marginal income rates.”

Taken together, Romney is still profiting handsomely from the layoffs he orchestrated over a decade ago, and he’s paying less in taxes that working families thanks to a special tax break he intends to keep. This probably won’t do much to bolster Romney’s “man of the people” credentials.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • Gov't Mule on December 19, 2011 10:42 AM:

    This is why Slick Willard is such a damn tool. He tries to be Malleable Mitt here. Note how he says," he personally didn't put together those deals" but nonetheless he will gladly profit from them. At the same time he performs this responsibility avoiding exercise, he will also try to play up his Job Destroying TM record at Bain as evidence of his business acumen. The guy is such a worm that he makes GWB seem like a mensch, which is pretty hard to do but somehow Slick Willard managed to do it, which in itself is a backhanded compliment.

  • bigtuna on December 19, 2011 10:46 AM:

    And all of this surprises us why?

  • Danp on December 19, 2011 10:49 AM:

    Romney pays a lower percentage in taxes for doing nothing than he did when he was "earning" his money. No wonder he thinks everyone else wants to be a welfare queen.

  • c u n d gulag on December 19, 2011 10:52 AM:

    Nice "not-work" if you can get it!

    And exactly how many Conservatives will this piss off?

    I mean, outside of those running against him, and those who dare to speak out, like, uhm... Huntsman.

    Outside of that?
    0
    Zero
    Zip
    Zilch
    Notta

  • Marko on December 19, 2011 10:59 AM:

    Sounds like the American Dream to me, but that doesn't necessarily make him a good presidential candidate. When you put the fox in charge of the hen house, you want some assurances that he won't eat all of the chickens. All Romney has done is guarantee he'll eat every one of them.

  • walt on December 19, 2011 11:00 AM:

    Romney won life's lottery, which as luck would have it, becomes an excuse to make life worse for the losers. You don't create a dysfunctional political system without some serious denial, and Romney perfectly embodies ours: the rich deserve to be rich, and the rest of us deserve to lose our houses and jobs.

    If Obama can't beat this plutocrat, America deserves everything coming to it. This nugget of information encloses the core of the 2012 battle.

  • Josef K on December 19, 2011 11:08 AM:

    Perhaps those jokes Romney told about being “unemployed” weren’t such a good idea.

    His opening his mouth in the first place was a bad idea.

    Again, this is the guy the Republicans want to be President? Where are their heads?

  • Mimikatz on December 19, 2011 11:09 AM:

    And this continues after he becomes President?

  • John Dillinger on December 19, 2011 11:20 AM:

    I wonder if he returns the checks, with a note "For pete sake, Im running for office, I can't cash these!"

  • Celui on December 19, 2011 11:30 AM:

    None of this surprises me. "Bain" Capital! The name, in itself, is a giveaway for its mission: to take what it can without consideration for the needs of the labor force which 'earned' the capital in the first place. FYI: "bain" is French for 'bath'. Bain Capital--Make'em take a bath in their losses. How aptly named. And, Willard continues to accept the money he negotiated on his way out the door! We learn a lot, here.

  • Sgt. Gym Bunny on December 19, 2011 11:44 AM:

    @ Celui

    I dunno... When I here "Bain" Capital, I think "Bane", the super bad-ass destructive evil-doer from Batman. Maybe that's more fitting. Just sayin...

  • Jan M on December 19, 2011 12:04 PM:

    The use of this special "hedge fund tax rate" is outrageous, and if it's explained clearly to the electorate (including our Republican friends and neighbors) I can't see why we can't get that part of the tax code overturned. That said, it's not correct to say Romney "paid less in taxes than working families". He more than likely paid a lower RATE of taxes, and obviously less than he would have if he'd paid tax on his income at the standard rates, but I'm pretty sure he paid more in total taxes than a lot of working families.

  • Marko on December 19, 2011 12:40 PM:

    ...but I'm pretty sure he paid more in total taxes than a lot of working families. - Jan M

    So are you suggesting that the more money you make, the lower tax rate you should pay?

  • Grumpy on December 19, 2011 12:44 PM:

    Positioning himself as a champion of the middle class, Romney told Fox News Sunday, "The people who have been hurt in the Obama economy are not the wealthy. The wealthy are doing just fine." In other words, it's Obama's fault Romney's so rich.

  • Kane on December 20, 2011 2:26 AM:

    If Bain had created anywhere near as many jobs as it has destroyed, don't you think Team Romney would have those numbers readily available for the media, and don't you think Romney would be boasting about those numbers ad nauseum?

    And where are the companies that Bain supposedly made stronger located? Are we to assume that those companies are all located in the U.S.? Bain is a multinatio­nal
    corporatio­n with global offices in London, Luxembourg­­, Munich, Mumbai, Hong Kong, Shanghai, and Tokyo. Is Romney continuing to profit (via his retirement package) off of foreign companies that are in direct competitio­n with American companies that provide American jobs?

    Wouldn't that raise a serious issue of conflict of interests for an individual seeking the office of the presidency­? Don't you think voters might be interested in knowing that Romney continues to make millions of dollars from a company that is investing in companies and workers abroad?

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