USA Today provides fraudulent criticism of pro Obama super pac ad on Bain's steel co. management
Last edited Thu Aug 16, 2012, 05:02 PM - Edit history (3)
USA Today took issue with Priorities USA ad which featured an interview with a steel worker, Joe Soptic, who lost his health insurance benefits thanks to Bain financially eviscerating GS Technologies (what BAin renamed the small, Kansas City, steel company).
The USA Today Editors said:
"the ad twists the story in grossly misleading ways. By the time Bain's investment went bad and the plant closed in 2001, Romney had long since given up day-to-day control of Bain."
This statement is nothing but a fraudulent argument. Let's stick to the facts here. Romney's Bain Capital and their appointed management team at the Kansas City steel firm made decisions LONG BEFORE Romney's "SO-CALLED" departure (I'll get to that next) which lead to GS Technologies eventual catastrophic bankruptcy(I say catastrophic in that companies to bankrupt every day and it doesn't lead to employees losing their pensions and health insurance coverage.
the information comes from a great article entitled: "Romney's Steel Skeleton in the Bain Closet" from Reuters.
Here is how it went: Bain, along with other investors bought the Kansas City steel company (renamed GS Technologies) in 1993 for $75 million - $8 million was put up by Bain. One year later, 1994, the Bain appointed management of the steel companey issued $125 MILLION in bonds
"Bain got its money back quickly. The new company issued $125 million in bonds and paid Bain a $36.1 million dividend in 1994."
NOte that $36 million went back to Bain - AFTER ONE YEARS OWNERSHIP (8/75 = 10.7% ownership for Bain).
That's a return of 451% on their $8 million investment -IN ONE YEAR!. NOte that that $36 million was therefore not available for
investing in new, more efficient machinery andor buildings - is something you might want to do if your objective was to build the company into something better than it was when you bought it.
There is much more to the story like the fact that in 1997 the union called for a strike because they didn't feel the company was putting enough aside to protect workers pensions and retirees health benefits. (uh-huh).
It should also be noted that despite these developments, a competitor steel company made an offer in 1997 to buy GS Tech for "a whole lot of money" according to the CEO of the company at the time, Roger Regelbrugge, but Bain turned them down (please note, 1997 was BEFORE the departure of Romney and the purported ending of any influence with Bain management). Apparently Bain thought they could get more money out of the company their way compared to what the competitor was willing to pay, which sounded like a very good offer, according to Regelbrugge.
Later on in 2001 the company declared bankruptcy. but firms go bankrupt every day and the workers retirement benefits are protected. BUT BAIN HAS CREATED SO MUCH DEBT AND COMBINED WITH BAD MANAGEMENT CAUSE THE COMPANY TO BE IN SUCH DECIMATED STATE THAT IT RENEGED ON THE PENSION AND HEALTH BENEFIT GUARANTEES ([font color="red"]"What's more, a federal government insurance agency had to pony up $44 million to bail out the company's underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees."[/font] {link}__presumably the $12 profit was in addition to the $35 million it skimmed from the bond issue in 1994_Bill USA).
so whether Romney 'left' Bain in 1999 or whatever, the bad judgements that lead to the downfall of this company were made much earlier while Romney was defiinitely there. As to Romney's 'departure', he was the sole major stockholder in BAin, the president and CEO. Does anybody believe anybody put in to manage Bain when Rmoney went to Olympics would manage BAin and its investments in any way that was NOT CONSISTENT with Romney's wishes. GIVE ME A BREAK.
The USAToday editors said: "Soptic's wife had her own health insurance, though she later lost it. And her death occurred not "a short time after" Soptic lost his job but five years later."
1) what does Soptic's wife's situation with regard to whether she had her own health insurance and unfortunately lost it when she was laid off - have anything to do with Mitt Romney's actiions and responsibilities in this matter. NOTHING! Yes, it would have been nice if she had had her own insurance, but does that relieve Romney of reckless profitmaking behavior - reckless with the lives of others? Fuck NO!
2) Regarding the use of "short time" to describe the interval between ... between what? I'm not sure what interval Soptic is referring to. But if he is referring to the five years from the time his steel employer went bust till his wife died -- guess what, I can certainly imagine to a man who would probably have been married about 36 to 40 yrs by that time....5 years probably did seem a short time.
BUT.. there is something more important to that interval. Five years is enough time that if in that interval they had had health insurance coverage and she had seen a doctor up to five years earlier --- that makes the possibility of fighting the cancer and achieving remission for at least some years more of life - MORE LIKELY THAN IF IT WAS A SHORT TIME --- SAY LIKE ONE YEAR.
The real point of the ad, which offered Soptic's story as one among thousands - is that when Romney acting as the manager (and let's not pretend when he was not in the office every day that he did not have influence on manaagement decisions - ANYBODY WHO HE PUT IN PLACE TO MANAGE BAIN WOULD UNDERSTAND NOT TO DO ANYTHING THAT WOULD NOT BE ENTIRELY ACCEPTABLE TO THE MAJOR STOCKHOLDER, PRESIDENT AND CEO OF BAIN CAPITAL) made decisions with the only concern being maximizing his profits without giving thought to how his decissions and actions affected all the people involved there were costs to be paid by people. People who Romney didn't give any thought to because his concern was his profits on his investments.
Romney's focus only on making profits for his investors (i.e. himself) lead to his making decisions that adversely, severely affected the lives of thousands of people and this does not seem to be of much concern to him. As a Private Equity Fund manager, that may be rationalizable but as the President of the U.S. that is not adequate and sufficient behaviour nor adequate and sufficient acquittal of your responsibilities to all the citizens of the country.
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