BUSINESS RECORD ROMNEY

EXECUTIVE SUMMARY
 Romney spent most of his business career as CEO of private equity firm Bain Capital – as of June 2007 he
maintained an investor’s stake in the company.
 Bain Capital has been criticized for relentless focus on bottom line at expense of workers and jobs.
 Romney describes himself as a “business legend” in his campaign ads and once said of himself: “I’m basically
in the investor’s Hall of Fame.”
 Bain Capital and Bain & Co. employees donated at least $171,000 to Romney’s presidential campaign in Q1
2007 and gave tens of thousands more in support of his previous political activities.
 Bain Capital financed 1988 buyout with junk bonds issued by Drexel Burnham – when SEC filed charges
against the firm and CEO Michael Milken, Bain Capital maintained their business relationship; Romney later
reminisced about “the glorious days of Drexel Burnham.”
 In 2004, Bain & Co. received a multi-million dollar contract from the National Iranian Oil Company.
 Romney sat on board of directors of Bain portfolio company Damon Clinical Laboratories, which in 1996 was
fined over $100 million for Medicare fraud committed during Romney’s tenure.
 Bain Capital owned company named Ampad that purchased an Indiana paper plant, fired its workers and
offered to bring them back at drastically reduced salary and benefits – the firings became an issue in the 1994
Senate race when workers blamed Romney for their situation and appeared in Kennedy campaign ads.
 After Romney became governor, Bain Capital teamed up with Chinese appliance maker Haier Group in 2005
in effort to purchase Newton, IA-based Maytag Corp. and send jobs overseas.
 At least two Bain Capital companies – Stream International and Modus Media – focused on outsourced
technical support services, expanding facilities abroad while contracting operations in the United States.
 Bain Capital operated steel company called GS Industries which went bankrupt in 2001 after years of labor
strife, closing a plant in Kansas City and laying off over 700 workers.
GENERAL BAIN OVERVIEW
Romney Remains An Investor In Bain Capital, The Private Equity Firm He Funded In 1984 – Partners
Running The Company Today Were Brought On Board During Romney’s Tenure
As Of June 2007, Romney “Remains An Investor In Bain Capital.” “Mr. Romney, who remains an investor in
Bain Capital, said he had not been involved in those decisions but acknowledged that such payments became
part of the buyout business ‘very early on.’” (David D. Kirkpatrick, “Romney’s Political Fortunes Tied To Riches He Gained In
Business,” The New York Times, 6/4/07)
“Romney Started Bain Capital In 1984, Made His Fortune There, And Ran It Before Moving Into The
Governor’s Office Four Years Ago.” (Brett Arends, “American Workers’ Bane,” Boston Herald, 6/22/05)
 Current Bain Capital Managing Partner Josh Bekenstein Founded Company With Romney In 1984.
“Mr. Bekenstein joined Bain Capital at its inception in 1984. He has been a Managing Director since 1986.
Prior to joining Bain Capital, Mr. Bekenstein spent several years at Bain & Company where he was involved
with companies in a variety of industries.” (Bain Capital Website, www.baincapital.com, Accessed 2/26/07)
Romney Ran Day-To-Day Operations At Bain Capital From Its Inception In 1984 Through Early 1999, When
He Left To Assume Control Of The Salt Lake Winter Games. “When Mr. Romney finally set up shop just
across the hall from Bain consulting in 1984, his initial plan centered on providing venture capital – seed money –
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for ideas spun off by Bain consultants. … By the time Mr. Romney left the firm in 1999, the investments it had sold
off had made enough money to deliver an average annual return that amounted to as much as 100 percent before
fees, several of its investors said.” (David Kirkpatrick, “Romney Political Fortunes Tied To Riches He Gained In Business,” The New
York Times, 6/4/07)
Romney Served As CEO Of Bain Capital Through August 2001, Even Though He No Longer Ran Daily
Operations. “Although he gave up running day-to-day operations at the venture capital firm in order to head the
Salt Lake Winter Olympics, he remained CEO and held his financial interest in the company through August
2001.” (Stephanie Ebbert and Yvonne Abraham, “Camps Spar Over Romney Word Choice,” The Boston Globe, 10/31/02)
Bain Capital Is “Remains Romney’s Creation” As Over Three-Quarters Of Its Partners Came On Board
During Romney’s Tenure, Joining The “Corporate Culture … He Nurtured Over 17 Years.” “Bain Capital
remains Romney’s creation. The corporate culture is one he nurtured over 17 years. A Herald analysis of the
firm’s leadership shows that more than three quarters of the managing partners joined when he was the boss.”
(Brett Arends, “American Workers’ Bane,” Boston Herald, 6/22/05)
Romney: “I’m Basically In The Investors’ Hall Of Fame.” (John McElhenny, “Romney, O’Brien Spar At Gubernatorial
Debate,” The Associated Press, 10/25/02)
Romney Relies On Employees At Bain Capital And Bain & Co. For Sizeable Campaign Contributions
Employees At Bain Capital And Bain & Co. Donated Over $171,000 To Romney’s Campaign In The First
Three Months Of 2007. According to the Center for Responsive Politics, persons affiliated with Bain Capital
donated at least $99,800 to Romney’s campaign in the first quarter of 2007 and he received another $71,250 from
employees of Bain & Co. (Center For Responsive Politics Website, www.opensecrets.org, Accessed 6/15/07)
“Republican Mitt Romney Received Almost $100,000 From Staff At Bain Capital, The Private Equity Group
That The Former Governor Of Massachusetts Founded.” (Alex Barker, “New Tycoons Are Taking A Not Entirely Altruistic
Interest,” Financial Times, 5/30/07)
Bain Executives Also Donated Tens Of Thousands Of Dollars To Support Romney’s Pre-Presidential
Campaign Activities. “[R]ecords of Mr. Romney’s political action committees indicate that he also accumulated a
valuable Rolodex during his years at Bain. Executives of Bain Capital and its sister firm, Bain Consulting,
contributed more than $64,000 over the last two years to Mr. Romney’s federal political action committee,
Commonwealth PAC, and in 2002 they gave more than $14,000 to his campaign for governor.” (David D. Kirkpatrick,
“Romney Reaps $20 Million To Top G.O.P. Rivals,” The New York Times, 4/3/07)
Romney’s Background As CEO And Corporate Dealmaker Seen As Influence On His Political Tactics
Romney’s “Flip-Flops And Business Success” Are Connected Because “Abandoning Deeply Held
Attitudes And Reversing Positions Are Job Requirements” For CEOs. “So, how are Romney’s flip-flops and
business success connected? People suspect, perhaps correctly, that Romney really doesn’t believe all the things
he’s saying. … [S]uch hypocrisy, which turns off voters, is something like a job requirement for CEOs. In the
executive suite, abandoning deeply held attitudes and reversing positions are job requirements. How often have
you seen a CEO proclaim that a struggling unit is not for sale, only to put it on the block a few months later? A
CEO will praise a product to the skies one day and then cancel it the next. He’ll boast, sincerely, that his company
is No. 1 in the industry and then, when he quits the next day to run a rival, claim that the new firm is tops.” (Daniel
Gross, “The CEO Candidate,” Slate.com, 2/26/07)
“Good CEOs … Devise New Business Strategies And Business Plans To Cope With Changing Market
Conditions.” “These business flips are fine, because in the corporate world, people don’t confuse advocacy of a
company’s strategy or products and services with personal honor or integrity. … Good CEOs don’t simply stake
out public positions and stick to them for 20 years. They devise new business strategies and business plans to
cope with changing market conditions.” (Daniel Gross, “The CEO Candidate,” Slate.com, 2/26/07)
Romney “Doesn’t Run In Elections, He Competes In Markets.” “It is clear that Romney approaches politics
not as a crusade but as a business case study. He doesn’t run in elections, he competes in markets. In 1994, the
former management consultant knew his market. … Today, Romney correctly recognizes that what is appropriate
for one market (Massachusetts voters) clearly is not appropriate for another market (Republican-primary voters).”
(Daniel Gross, “The CEO Candidate,” Slate.com, 2/26/07)
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Romney’s Business Acumen Was “Forged In The Often-Overheated 1980s.” “An examination of Romney’s
nearly 20-year business career in Boston – as a consultant, venture capitalist, entrepreneur and chief executive –
shows a man whose uncanny ability to smell a deal, take a risk and turn a profit was forged in the oftenoverheated
1980s.” (Mitchell Zuckoff and Ben Bradlee Jr., “Romney’s Business Record Gives Larger Picture,” The Boston Globe, 8/8/94)
As CEO, Romney “Insisted On Having Almost Dictatorial Powers. … That Was Essential.” “The Bostonbased
venture capitalist likes to be in control. ‘(At SLOC) I don’t have the kind of control I’m used to in the
business world,’ he said. ‘When I was involved in (the resurrection of the beleaguered international firm Bain
Consulting), I insisted on having almost dictatorial powers. … That was essential.’” (Lisa Riley Roche, “Mitt Exemplifies
The New Openness Sought For SLOC,” Deseret News, 2/12/99)
Former Business Colleague Said Romney Possessed “Ability To Identify People’s Insecurities And
Exploit Them To His Own Benefit.” “[S]ome colleagues found Romney to be manipulative. Romney had an
‘ability to identify people’s insecurities and exploit them to his own benefit,’ says a source who worked with
Romney but refused to be quoted for ‘fear of retribution.’ This source says that Romney would vary bonuses
among his partners just enough to put people on edge, giving $3.1 million to one, $3 million to another and $2.9
million to another.” (Evan Thomas et al, “Is Mitt Romney Ready For Prime-Time Politics?” Newsweek, 4/16/07)
Romney, On His Business Record: “I Won The Lottery … I Was Absolutely In The Right Place At The
Right Time.” “Romney said he can afford to do this because ‘I won the lottery. I got into something called venture
capital just when the stock market went from, I don’t know, a couple thousand to almost 10,000. I was absolutely
in the right place at the right time.’” (Lisa Riley Roche, “Mitt Exemplifies The New Openness Sought For SLOC,” Deseret News,
2/12/99)
Under Romney’s Leadership, Bain Capital Had History Of Relentless Focus On Bottom Line, Improving
Corporate Profits At Expense Of Local Workers
Under Romney’s Stewardship, “Bain Left Companies In Bankruptcy Or Near Collapse After Selling Off Its
Interests And Made Huge Profits.” “Romney was tremendously successful as CEO of Bain Capital and he
helped build many companies. But his work also involved controversial ventures … that resulted in downsizing or
layoffs. In some cases, Bain left companies in bankruptcy or near collapse after selling off its interests and made
huge profits. Some companies Bain invested in, such as American Pad & Paper of Dallas, Stage Stores of
Houston, and Dynamic Details (DDI) of Orange County, Calif., crashed after Bain went public with the company’s
stock, and then immediately sold its own interest.” (Frank Phillips, “Romney Profited On Firm Later Tied To Fraud,” The Boston
Globe, 10/10/02)
 Bain Culture: “Possessed By A Mission To Increase The ‘Total Economic Value’ Of Their Clients.”
“Notoriously secretive about itself and its work for clients, Bain has over the years been labeled the ‘KGB of
Consulting’ … Bain consultants seem possessed by a mission to increase the ‘total economic value’ of their
clients. Like religious zealots, they single-mindedly dedicate themselves to improving their customer’s
competitive position. Business is a holy war that the client must win and the competition must lose.” (Nancy
Perry, “A Consulting Firm Too Hot To Handle?” Fortune, 4/27/87)
“Bainies” Were Known For Company Songs And Secrecy, Compared To KGB. “Bain & Co. also was known
for the strict discipline, team spirit - including company songs - and relentless work ethic of its troops. With their
uniforms of white shirts and red power ties, the clean-cut Bain consultants were known as ‘Bainies,’ a knockoff of
the term ‘Moonies’ for followers of Rev. Sun Myung Moon. Bain & Co. also was known for its secrecy, earning
sobriquets like ‘the KGB of consulting.’” (Mitchell Zuckoff and Ben Bradlee Jr., “Romney’s Business Record Gives Larger Picture,”
The Boston Globe, 8/8/94)
 Code Names And More: “From the beginning, Bain cultivated a mystique around the secretive firm, which
was once dubbed ‘the KGB of consulting.’ Partners didn’t carry business cards and referred to clients by code
names. … And it inculcated in the recruits such a sense of mission that young consultants became known as
Bainies, a reference to the Unification Church’s Moonies.” (Paul Hemp, “Did Greed Destroy Bain & Co.?” The Boston
Globe, 2/26/91)
Bain Got “Their Hands Deep into The Trousers Of A Company,” According To One Executive. “How could
a respected, albeit highly aggressive, firm like Bain have left itself open to being tainted by the scandalous
behavior of a client? The answer may lie in Bain’s approach to business: ‘They get their hands deep into the
trousers of a company,’ says an executive who knows the firm well.” (Nancy Perry, “A Consulting Firm Too Hot To Handle?”
Fortune, 4/27/87)
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 “Like Religious Zealots … Business Is A Holy War That The Client Must Win And The Competition
Must Lose.” “Notoriously secretive about itself and its work for clients, Bain has over the years been labeled
the ‘KGB of Consulting,’ or a ‘Moonie commune’ run by the ‘Reverend’ Bain. Bain consultants seem
possessed by a mission to increase the ‘total economic value’ of their clients. Like religious zealots, they
single-mindedly dedicate themselves to improving their customer’s competitive position. Business is a holy
war that the client must win and the competition must lose.” (Nancy Perry, “A Consulting Firm Too Hot To Handle?”
Fortune, 4/27/87)
 “Stand Aside, Asshole. Here We Come.” “The real problem for Bain & Co., though, may be the firm’s
tendency to alienate and weaken lower-level managers at the companies where it works. … Notes the
chairman of another management consulting firm: ‘Their product is brilliant. It’s the package that has been a
problem. Five million Bainies saying, ‘Stand aside, asshole. Here we come.’” (Nancy Perry, “A Consulting Firm Too
Hot To Handle?” Fortune, 4/27/87)
Romney “Often” Tapped Bain Partners For Management Roles In Bain Capital-Funded Companies,
Raking In Millions In Fees For Bain & Co. “Romney still works very closely with his old company, often hiring
Bain partners to take over management of the outfits he invests in. Last December Bain Capital Partners paid $2
million for a 40% stake in GS Roofing Products, a division of GenStar Inc., which lost in excess of $10 million in
1986. The company, under direction of majority stockholders Berkshire Partners, immediately hired – you
guessed it – Bain & Co. to try to stem the losses. Fees so far: close to $2 million.” (Laura Jereski, “Putting It On The Line,”
Forbes, 11/30/87)
Romney Blasted Critics Of Bain Management Style For “Naivete,” Claiming “There Is Nothing Wrong With
Companies … Trying To Make Money” And “This Is Not Fantasy Land.” “Romney said yesterday that layoffs
can be a part of doing business. ‘This is not fantasy land,’ said Romney. ‘This is the real world and in the real
world there is nothing wrong with companies trying to compete, trying to stay alive, trying to make money.’ …
‘Clearly there is a naivete which sometimes exists in people who have not been in the real world, working with
real businesses with real competition trying to keep jobs and businesses alive,’ Romney said. ‘They live in a
never-never land where not all businesses get better, not all businesses grow.’” (Frank Phillips, “Romney Firm Tied To
Labor Fight,” The Boston Globe, 9/23/94)
Romney Defended Layoffs At Bain Capital-Controlled Indiana Paper Plant In 1994. “In July 1994, Ampad [a
paper company Bain Capital controlled] bought an Indiana paper plant, fired the existing workers, and gave most
employees their jobs back at reduced wages and benefits. Even though Romney was on leave from Bain for the
campaign, the workers came to Massachusetts and dogged his campaign. Romney initially tried to justify the
layoffs, defending them as necessary in corporate restructuring.” (Stephanie Ebbert, “Romney Seeks High Office With
Confidence, Pedigree,” The Boston Globe, 8/14/02)
Bain Capital Called “Bully On The Block,” Blamed For Closing Of Kansas City Steel Plant In 2002. “Out-ofwork
steelworkers in Kansas City, for example, blame Romney and Bain Capital for decisions that led to last
year’s bankruptcy of a steel mill that opened its doors in 1888. Bain bought the operation, GST Steel Co., in 1993.
Workers said the new owners cleaned house and brought in an inexperienced management team. Dan Misel,
who worked at GST Steel for 35 years, said Bain came in ‘like the bully on the block,’ assuming its managers
knew how to run the operation better than anyone already in place. … In 1997, two years before Romney left Bain
to run the Winter Olympics, the Kansas City plant endured its first strike in four decades. After a 10-week walkout,
union officials said they offered to work with managers to improve the plant’s competitiveness, but that the Bainimposed
managers weren’t interested. … When the plant closed earlier this year, amid a generally gloomy climate
for US steel companies, workers lost severance packages and health insurance coverage.” (Thomas Farragher and
Scott Bernard Nelson, “Business Record Helps, Hinders Romney,” The Boston Globe, 10/24/02)
BAIN CAPITAL AND DREXEL BURNHAM
Romney Used Drexel Burnham Junk Bonds To Finance 1988 Leveraged Buyout, Right Around The Time
SEC Officials Were Taking Formal Action Against The Company
Bain Capital Financed Mid-1988 Deal With Junk Bonds Issued By Drexel Burnham And Notorious
Financier Michael Milken. “Sometimes, when Bain Capital was looking to make a deal, the bulk of the money
came not from its investors but from other sources, such as junk bonds. In 1988, for instance, Bain Capital
decided to buy two Texas department store chains, Bealls and Palais Royale, in a deal valued at $300 million. To
fund the purchase, Bain sought out Drexel Burnham corporate financiers, based in Boston, who were working
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under junk bond impresario Michael Milken. Romney and the Bain Capital partner who oversaw the deal, Joshua
Bekenstein, said they never dealt with Milken.” (Mitchell Zuckoff and Ben Bradlee Jr., “Romney’s Business Record Gives Larger
Picture,” The Boston Globe, 8/8/94)
Two Months After Hiring Drexel, The SEC Filed Extensive Complaint Alleging Insider Trading And Market
Manipulation – Romney Defended The Decision To Keep Using Drexel In Transaction. “On Sept. 7, 1988 -
roughly two months after Bain Capital hired Drexel to issue junk bonds - the Securities and Exchange
Commission filed a 184-page complaint against Drexel, Milken and others alleging insider trading schemes,
manipulation of stock prices and other violations of federal securities laws. Bain Capital was put in the position of
trying to close a deal with junk bonds from a company being sued by the SEC. Romney and Bekenstein defended
their decision to hire Drexel before the SEC suit – at a time when rumors of the investigation were rife on Wall
Street – as well as after the suit was filed.” (Mitchell Zuckoff and Ben Bradlee Jr., “Romney’s Business Record Gives Larger
Picture,” The Boston Globe, 8/8/94)
 Romney: “We did not say, ‘Oh my goodness, Drexel has been accused of something, not been found guilty.
Should we basically stop the transaction and blow the whole thing up?’” (Mitchell Zuckoff and Ben Bradlee Jr.,
“Romney’s Business Record Gives Larger Picture,” The Boston Globe, 8/8/94)
Romney And Bain Capital Continued Using Drexel Burnham To Refinance Bonds Well After SEC Suit Was
Initiated. “Romney and Bekenstein said their main concern was whether the suit would damage Drexel so badly
that it would be unable to sell the bonds for Bain Capital. As it turned out, the bonds sold quickly. Bain Capital
then refinanced the bonds, also with Drexel, in mid-1989. Of 59 Bain Capital deals, only one involved Drexel.”
(Mitchell Zuckoff and Ben Bradlee Jr., “Romney’s Business Record Gives Larger Picture,” The Boston Globe, 8/8/94)
Romney Later Reminisced About “The Glorious Days Of Drexel Burnham,” Saying “It Was Fun While It
Lasted.” “The deal that jump-started Bain’s business came along in 1986, a $200 million buyout of Accuride
Corp., the wheel and rim manufacturing unit of Firestone Co., Phoenix. Bain financed the deal with just $5 million
of its own equity and borrowed the rest. Just 18 months later, Bain sold Accuride to Phelps Dodge Co. for $320
million. Its return on its investment: $130 million. ‘That was in the glorious days of Drexel Burnham,’ Mr. Romney
recalled. ‘It was fun while it lasted, but fortunately, it came to an end.’” (Jennifer Goldblatt, “Boston Buyout Firm Cashes In by
Adding Value,” The American Banker, 12/23/97)
BAIN & CO. AND IRAN
Bain & Company Was Hired By Iran’s National Oil Company In 2004 To Conduct Efficiency Study
In 2004, Bain & Co.’s Italian Branch Was Hired By National Iranian Oil Company To Conduct Study On
“How To Make The Bureaucratic State Company More Efficient.” “[A]s oil minister, Bijan Namdar Zanganeh,
an ally of powerful former president Ali Akbar Hashemi Rafsanjani, in the late 1990s pushed through billions of
dollars in agreements with Shell, France’s Total, Italy’s Eni, Schlumberger and Ha