Bloomberg News

Criticism of Romney’s Private-Equity Past Is Fair, Podesta Says

January 18, 2012

Jan. 13 (Bloomberg) -- John Podesta, a former Democratic White House chief of staff, said criticism of Mitt Romney by Republican rivals over his private-equity record at Bain Capital LLC is fair and will haunt him in November.

“The critique against Romney, really, is the way, under his leadership, Bain Capital operated, in the fact that so many companies went bankrupt under his tenure,” Podesta said on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “I think 22 percent of the investments went bankrupt. They put a lot of people out of work, shipped a lot of jobs overseas.”

Podesta, who was chief of staff to former President Bill Clinton and managed President Barack Obama’s transition team, predicted Obama will win re-election in November “going away” in a three-way race that includes a candidate from Americans Elect who will “siphon off” votes.

He predicted the third-party candidate would most likely be former Republican Senator Alan Simpson of Wyoming, who was co- chairman of the president’s deficit-cutting panel. Americans Elect is a nonpartisan group enlisting people to vote online to choose a third-party candidate to run in November.

“That John is a pesky rascal,” Simpson said in a telephone interview. “He’s having some fun, and he should. He’s a good egg.” The former senator added: “I don’t want to be president. I want to be a benign curmudgeon, or king.”

Gingrich, Perry

Romney’s rivals for the Republican presidential nomination, including former House Speaker Newt Gingrich and Texas Governor Rick Perry, have criticized the former Massachusetts governor’s role at Bain as they campaign in South Carolina ahead of that state’s primary election Jan. 21. Romney won the first two nominating contests in Iowa and New Hampshire.

Perry said companies like Bain are “just vultures sitting out there on the tree limb waiting for the company to get sick.”

Podesta said the private-equity criticism isn’t about putting capitalism or the free market on trial. “Private equity can build companies, and it may make appropriate investments,” he said.

He said Romney “hasn’t handled it very well by suggesting that a review of how he personally operated at Bain Capital or how Bain Capital operated under his leadership, you know, is an attack on the whole free enterprise system.”

Another issue Democrats will use against Romney in a general election matchup is his refusal to release his tax returns, Podesta said.

‘Fair Play’

Romney called on former Democratic Senator Ted Kennedy of Massachusetts to release his returns when the two battled in a Senate race in 1994, Podesta said. “Now turnabout’s a little fair play,” he said.

Podesta said the economy would be the main election issue. The national unemployment rate was 8.5 percent in December. While that is the lowest since February 2009, the month after Obama took office, it also extends the longest period of unemployment above 8 percent since the Great Depression.

Stocks have made a comeback since Obama was inaugurated Jan. 20, 2009. The Standard & Poor’s 500 Index has risen by 60 percent, the Dow Jones Industrial Average up by 56 percent.

Podesta said Romney’s strengths in the election include his argument that “I can just do better.”

“He’ll try to argue that I’m just a guy who can kind of level things out, be a calm person, operate in the middle, and try to put the economy back on track,” Podesta said.

‘Undusted Up’

“Left undusted up,” that could have some appeal, Podesta said. Still, he predicted Romney will lose on economic issues because he’s proposing “more tax cuts for the wealthy,” while Obama will win on the fairness argument of helping the middle class grow again.

Podesta praised Obama’s choice of White House Budget Director Jack Lew to be the president’s new chief of staff after Bill Daley announced his resignation this week.

“He’s got very, very deep Washington experience,” Podesta said. “He’ll be able to run the policy side of the White House, run the budget side, be able to talk to Republicans and Democrats on Capitol Hill.”

He said Obama has a robust policy agenda in an election year that includes a new strategy on defense and efforts to promote entrepreneurship and create jobs.

--Editors: Laurie Asseo, Mark Silva

To contact the reporter on this story: Catherine Dodge in Washington at

To contact the editor responsible for this story: Mark Silva at

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