President Barack Obama’s campaign has set a target on Mitt Romney’s tenure at the helm of Bain Capital LLC. What’s missing are high profile surrogates from the Democratic Party and the business community who will hit that theme in interviews and appearances on political talk shows.
In fact, some Obama backers are undermining a core argument the president is making against the presumed Republican Party nominee as they try to avoid criticizing the investment community.
Newark, New Jersey Mayor Cory Booker yesterday called the private-equity debate “nauseating to the American public” and likened it to potential Republican attacks tying Obama to his former pastor, Reverend Jeremiah Wright Jr., who once urged blacks to sing “God damn American” instead of “God Bless America.”
“Enough is enough. Stop attacking private equity. Stop attacking Jeremiah Wright,” Booker said on NBC’s “Meet the Press” program. “This stuff has got to stop because what it does is it undermines to me what this country should be focused on.” After Romney’s campaign highlighted his comments, Booker later backtracked in a Twitter message and a web video.
Booker’s comments came on the heels of those from Steven Rattner, who headed the president’s auto task force and last week called “unfair” an Obama campaign ad about a Kansas City, Missouri steel mill that was taken over by Bain in 1993.
“I don’t think Bain Capital did anything they need to be embarrassed about,” Rattner said May 14 on MSNBC’s “Morning Joe” program. “It did it superbly well, acting within the rules, acting very responsibly, and was a leading firm.”
While Booker and Rattner weren’t speaking as official campaign surrogates, their comments reflect a broader reluctance of top business leaders and elected officials to sound the campaign criticism of Romney’s Bain performance, in part, because they don’t want to vilify an industry that makes positive contributions to the economy. As a private-equity firm, Bain has made successful investments and many of its customers are pension funds, said Steven Kaplan, a professor at the University of Chicago Booth School Business.
“The fact is, a number of the private-equity investors, even some of the big names, are Democrats,” said Kaplan. “You can always find a deal that didn’t work.”
Romney’s campaign jumped on Booker’s and Rattner’s remarks, putting up a new ad replaying their comments along with a quote from former Representative Harold Ford, a Tennessee Democrat, saying “private equity’s not a bad thing.”
“Have you had enough of Obama’s attacks on free enterprise? His own key supporters have,” the ad says.
Earlier this month, Boeing Co. (BA:US) CEO Jim McNerney, chairman of Obama’s Export Council, defended the role of private equity in the economy, saying the wealth-creation-versus-job-creation distinction the campaign is trying to make is “too easy.”
“Even within Boeing you’re growing some elements, you’re winding down others to fuel, to provide resources, to provide the growth,” McNerney said in a May 8 interview. “That’s what makes this country great, because we can redeploy capital and labor more quickly than other societies. And I think private equity plays a role in that.”
The Obama campaign says the Bain focus isn’t an indictment of the sector. Instead, it is specifically highlighting Romney’s economic philosophy and Bain’s track record.
“We’re not questioning the purpose of the private equity business as a whole,” Ben LaBolt, a campaign spokesman, told reporters on a conference call today. “One of the key questions, I think, the American people have is why do Romney and his partners succeed even if the company failed.”
The Bain argument is part of a $25 million ad-blitz this month financed by the Obama campaign which paints Romney as a corporate raider, focused on wealth creation, not job creation. Obama for America began a new round of attacks today with a web video about another company acquired by Bain -- American Pad & paper, or Ampad, an office-supplies plant in Marion, Indiana -- that closed in 1995.
“You don’t come in and just take everything, everybody’s job and destroy a business. I mean, that’s what they did,” Jerry Rayburn, a former employee of SCM Office Supplies Inc., says in the five and a half minute video.
Bain, in an e-mailed statement today, said Ampad’s business grew during the years the firm controlled the company.
“The Marion plant was a challenging situation in a business that was performing well overall, growing revenues and adding jobs,” Bain said. “Our control of Ampad ended in 1996, fully four years before it encountered financial difficulties due to overwhelming pressure from ‘big box’ retailers, declines in a paper demand and intense foreign price pressures.”
Brushing aside “political attacks that emphasize the few companies that have struggled,” Bain said revenues grew in 80 percent of the more than 350 companies in which the firm invested.
While saying the industry plays a positive role in the economy, Lawrence Fish, the former chief executive officer of Citizens Financial Group, Inc. and a top Obama campaign donor and surrogate, last week questioned Romney’s role at Bain.
“The question about private equity -- and this applies to Mitt Romney and his partners -- specifically is,” when jobs are eliminated, “whether they have behaved fairly and whether they’ve behaved responsibly. Was fair and complete severance provided to displaced workers? Were their pensions honored?” he said on Bloomberg Television’s “Political Capital.”
Vice President Joe Biden has emerged as the Obama campaign’s Romney attack dog, saying in Youngstown last week that after GST Steel was taken over by Bain, Romney made sure his executives “got to play by a separate set of rules.”
“But not everyone got hurt. The top 30 executives walked away with $9 million,” Biden said May 16. “And Romney and his partners walked away with at least $12 million.”
For his defense, Romney has a roster of surrogates to defend his business background, including Tom Stemberg, the founder of Staples Inc. (SPLS:US); former Minnesota Governor Tim Pawlenty, Senator Rob Portman of Ohio and Wisconsin Representative Paul Ryan, chairman of the House Budget Committee.
The former Massachusetts governor has been dodging private- equity attacks since he began seeking political office almost two decades ago. And still, he had trouble responding effectively to them in the Republican primary and in recent weeks.
He has repeatedly claimed that under his tenure at Bain, the firm created 100,000 jobs. Neither the private-equity firm nor his campaign have been able to document that figure in response to repeated requests by Bloomberg News. Bain Capital doesn’t track jobs lost or gained as a result of their investments.
Last week, Romney responded to the Bain attacks by charging, in a May 16 podcast with blogger Ed Morrissey of Hot Air, that under Obama’s watch “about 100,000 jobs were lost in the auto industry and auto dealers and auto manufacturers, so he’s hardly one to point a finger.”
That claim is “untenable,” according to the Washington Post’s “Fact Checker” column, which labeled it “four Pinocchios” -- its highest rating for falsity.
Booker yesterday released a YouTube video explaining why Romney’s business record is fair game.
“Let me be clear: Mitt Romney has made his business record a centerpiece of his campaign,” he said. “Therefore, it is reasonable, and in fact I encourage it, for the Obama campaign to examine that record and to discuss it. I have no problem with that.”
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