Mercury Rising 鳯女

Politics, life, and other things that matter

Willard’s Stash

Posted by Charles II on July 3, 2012

A good article on Bain by Nicholas Shaxson of Vanity Fair.

Offshore bank accounts. Failure to disclose these shady holdings. Unclear whether taxes were paid on these holdings. Blind trusts which aren’t blind. Abuse of use of stock options by putting them into tax free accounts at super-low valuations. Abuse of the carried interest tax gimmick by which hedge fund operators pay taxes at sweetheart rates, about which Shaxson says:

The assertion that he broke no laws is widely accepted. But it is worth asking if it is actually true. The answer, in fact, isn’t straightforward. Romney, like the superhero who whirls and backflips unscathed through a web of laser beams while everyone else gets zapped, is certainly a remarkable financial acrobat. But careful analysis of his financial and business affairs also reveals a man who, like some other Wall Street titans, seems comfortable striding into some fuzzy gray zones.

And Bain went to extraordinary lengths to screw employees:

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Cindy Hewitt, [Bain subsidiary] Dade’s human-resources manager, remembers how the firm closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation, and relocated some staff to Miami, then the company’s most profitable plant. Based on re­a­ssur­ances she had received from her superiors, she told those uprooting themselves from Puerto Rico that their jobs in Miami were safe for now—but then Bain closed the Miami plant.

Bain engaged in startling penny-pinching with the laid-off employees. Their contracts stipulated that if they left early they would have to pay back the costs of relocating to Miami—but in spite of all that Dade had done to them, it refused to release the employees from this clause. “They said they would go after them for that money if they left before Bain was finished with them,” Hewitt recalls. Not only that, but the company declined to give workers their severance pay in lump sums to help them fund their return home.

So, see: you spend $50K to re-locate, you get laid off, and then you have to wait around for months and months paying COBRA out of your severance pay or they’ll outright steal the money you put up to re-locate for their convenience.

Oh, and did you notice? Bain got $7M from Puerto Rico, a poor territory, and then walked out on them.

And then there’s this question about whether the kind of shroud of secrecy under which Bain operates could possibly facilitate criminal enterprises (which we assume, perhaps naively, that Bain is not):

The money sucked into Tax Haven U.S.A., often via the “feeder” tax havens, is frequently tax-evading and other criminal foreign money, in the spirit of Hudson’s 1966 memo, and it is predominantly channeled not into productive investment but into real estate and financial business.
… private equity is one channel for this secrecy-shrouded foreign money to enter the United States, and a filing for Mitt Romney’s first $37 million Bain Capital Fund, of 1984, provides a rare window into this.

This is the guy that Republicans think should represent America. Considering how SIFUABS America is becoming, maybe they’re right.

4 Responses to “Willard’s Stash”

  1. Mark Gisleson said

    The good stuff is coming out. Not in this article, but I loved learning that Mitt acquired a company that made its money by disposing of aborted fetuses.

    This atheist is beginning to think that the best campaign we could run against these guys would be First Commandment based: money is their god, and everything they do proves it.

    • Charles II said

      A long term goal has been to split the Triangular Trade, as Michael Lind called it, into its component pieces.

      The right consists of its generally libertarian intellectuals, the religious right, and the corporate right. These are largely incompatible. The objectives of the religious right are in direct opposition to those of the other parts of the triangle.

      The corporate right is libertarian only to the point of allowing corporations to do what they want to, plus drugs, gay marriage, and abortions, which the corporate right is all in favor of. They do not support genuine libertarianism, so there’s always an uncomfortable dance with their intellectuals–and the Tea Party types, people who may have even read more of the Bill of Rights than the Second Amendment. Occasionally one of the intellectuals, like Lind, will decide that the pay is not good enough to eat all that manure.

      If even the corporate right can be split from the religious right, the movement will be unable to hold power.

  2. And I was just coming here to post this. Thanks, Charles!

  3. MarkH said

    It’s getting “curiouser and curiouser”.

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