In the latest act of America’s best-funded reality series, The Continuing Reinvention of Governor Romney, he’s been reborn as a stalwart fighter for America’s jobs

Fresh from his victory in Michigan, Mitt Romney rolled into South Carolina on Wednesday as he continued to his focus on the economy but also tried to play down expectations of how he would fare in the state’s Republican primary on Saturday. (The Democratic primary here is a week later.)

Before an enthusiastic crowd of several hundred at a retirement community here, Mr. Romney declared that he would “fight for every job we have in this country” and that he was “unwilling to declare defeat in any industry.”

Mr. Romney, the former Massachusetts governor, is continuing the pattern he began last week campaigning in economically downtrodden Michigan, where he often sounded more like a statewide candidate when he promised to work tirelessly to revive the state’s auto industry…

At his first event here on Wednesday morning, Mr. Romney trotted out his private sector background — he began his career in consulting and then earned millions of dollars as one of the founders of Bain Capital, a leveraged buyout firm — as proof of his expertise in transforming industries, even though he failed to mention that in some cases his company caused hundreds of layoffs.

“We fought every time to grow employment,” he said. “I will do so in this country.”

…

Afterward, when a reporter asked Mr. Romney if he was worried about making unrealistic promises, he said his posture should be to “fight for every job,” although he conceded some jobs will inevitably be lost “from time to time.”

He also said that executives often layoff workers as a way of rebuilding and growing again.

unfortunately, often that’s not quite how it works out

”Bain Capital is the model of how to leverage brain power to make money,” said Howard Anderson, a professor at MIT’s Sloan School of Management. ”They are real first-rate financial engineers.”

But, he says, ”They will do everything they can to increase the value. The promise to [investors] is to make as much money as possible. You don’t say we’re going to make as much money as possible without going offshore and laying off people.”

Not that Anderson has a problem with this approach. In addition to being a business school professor, he has also been a Bain Capital investor.

although there are certainly other ways to make a profit

Perhaps the most legally thorny was Bain Capital’s 1989 purchase of Damon Corp., a Needham medical testing firm that later pleaded guilty to defrauding the federal government of $25 million and paid a record $119 million fine.

Romney sat on Damon’s board. During Romney’s tenure, Damon executives submitted bills to the government for millions of unnecessary blood tests. Romney and other board members were never implicated.

More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O’Brien accused him of lax oversight at Damon and failing to report the fraud. Romney replied that he had helped uncover the illegal activity at Damon, asking the board’s lawyers to investigate. As a result, he said, the board took ”corrective action” before selling the company in 1993 to Corning Inc.

But court records suggest that the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation. Bain, meanwhile, tripled its investment.

Romney personally reaped $473,000.

lots of other ways

In 1992, Bain Capital acquired American Pad & Paper, or Ampad, from Mead Corp., embarking on a ”roll-up strategy” in which a firm buys up similar companies in the same industry in order to expand revenues and cut costs.

Through Ampad, Bain bought several other office supply makers, borrowing heavily each time. By 1999, Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings.

Sales grew, too – for a while. But by the late 1990s, foreign competition and increased buying power by superstores like Bain-funded Staples sliced Ampad’s revenues.

The result: Ampad couldn’t pay its debts and plunged into bankruptcy. Workers lost jobs and stockholders were left with worthless shares.

Bain Capital, however, made money – and lots of it. The firm put just $5 million into the deal, but realized big returns in short order. In 1995, several months after shuttering a plant in Indiana and firing roughly 200 workers, Bain Capital borrowed more money to have Ampad buy yet another company, and pay Bain and its investors more than $60 million – in addition to fees for arranging the deal.

Bain Capital took millions more out of Ampad by charging it $2 million a year in management fees, plus additional fees for each Ampad acquisition. In 1995 alone, Ampad paid Bain at least $7 million. The next year, when Ampad began selling shares on public stock exchanges, Bain Capital grabbed another $2 million fee for arranging the initial public offering – on top of the $45 million to $50 million Bain reaped by selling some of its shares.

Bain Capital didn’t escape Ampad’s eventual bankruptcy unscathed. It held about one-third of Ampad’s shares, which became worthless. But while as many as 185 workers near Buffalo lost jobs in a 1999 plant closing, Bain Capital and its investors ultimately made more than $100 million on the deal.

”The private equity business is like sex,” says Anderson, the MIT professor. ”When it’s good, it’s really good. And when it’s bad, it’s still pretty good.”

(hey – bonus fact – Mitt Romney’s compensation from Bain Capital was structured so he paid capital gains tax and not income tax on it, which means that you almost certainly paid a higher percentage of your income in taxes than he spent on that up-to-$250 million)

Not that he didn’t have other, better ways of protecting his money from that whole tiresome supporting the government business

While in private business, Mitt Romney used shell companies in two offshore tax havens to help eligible investors avoid paying US taxes, federal and state records show.

Romney gained no personal tax benefit from the legal operations in Bermuda and the Cayman Islands. But aides of the Republican presidential hopeful and former colleagues acknowledged that the tax-friendly jurisdictions helped attract billions of additional investment dollars to Romney’s former company, Bain Capital, and thus boosted profits for Romney and his partners.

Romney has based his White House bid, in part, on the skills he learned as cofounder and chief of Bain Capital, one of the nation’s most successful private equity groups. His campaign cites his record while governor of Massachusetts of closing state tax loopholes; his involvement with foreign tax havens had not come to light before.

In the Cayman Islands, Romney was listed as a general partner and personally invested in BCIP Associates III Cayman, a private equity fund that is registered at a post office box on Grand Cayman Island and that indirectly buys equity in US companies. The arrangement shields foreign investors from US taxes they would pay for investing directly in US companies.

Romney still retains an investment in the Cayman fund through a trust. Campaign disclosure forms show the investment paid him more than $1 million last year in dividends, interest, and capital gains.

In Bermuda, Romney served as president and sole shareholder for four years of Sankaty High Yield Asset Investors Ltd. It funneled money into Bain Capital’s Sankaty family of hedge funds, which invest in bonds and other debt issued by corporations, as well as bank loans.

Like thousands of similar financial entities, Sankaty maintains no office or staff in Bermuda. Its only presence consists of a nameplate at a lawyer’s office in downtown Hamilton, capital of the British island territory.

"It’s just a mail drop, essentially," said Marc B. Wolpow, who worked with Romney for nine years at Bain Capital and who set up Sankaty Ltd. in October 1997 without ever visiting Bermuda. "There’s no one doing any work down there other than lawyers."

…

Romney first purchased a 3.25 percent share of the Cayman fund and was listed as a "general partner (passive)" before his retirement from Bain Capital in late 2001, records show. He put his financial assets into a blind trust in January 2003, when he took office as governor of Massachusetts.

…

Romney is the wealthiest candidate running for president, with a personal fortune of as much as $250 million, according to financial disclosure forms he filed in August. His financial trust retains investments in at least 32 Bain and Sankaty equity, hedge, and debt funds, among other assets, the documents disclosed.

Under his retirement agreement, Romney retains a share of the profits at Bain Capital, as well as the right to make new investments in Bain funds through his trust, until February 2009.

Malt said he repeatedly had increased Romney’s stake in the Cayman fund since 2003. He said he was unaware of the specific figures, but added that he knew he "wrote a lot of checks" and that it pays a return of 20 percent to 30 percent a year.

on the other hand, Olympics Olympics union busting Olympics!

Mr. Romney learned the perils of campaigning on his business career in his first run for office, when accusations that Bain Capital had fired union workers at an Indiana company it controlled derailed his effort to unseat Senator Edward M. Kennedy, a Democrat, in 1994. “Basically, he cut our throats,” a laid-off worker said in a commercial attacking Mr. Romney. (He has said he had nothing to do with the firings.)

Mr. Romney, in an interview, acknowledged that Bain Capital’s acquisitions had sometimes led to layoffs but said that he could explain them to voters.

“Sometimes the medicine is a little bitter but it is necessary to save the life of the patient,” he said. “My job was to try and make the enterprise successful, and in my view the best security a family can have is that the business they work for is strong.”

But he said he did have some second thoughts about elements of his Bain Capital career.

“The experience of the last eight years, running the Olympics and being a governor, would make me take an even more sensitive look at the impact of business decisions on the lives of suppliers and employees and others who are involved,” he said.

Another bit of relevant experience that doesn’t appear in the bio on his website, from 1991:

Bain & Company, the Boston-based consulting firm, said yesterday that W. Mitt Romney would become chief executive, replacing William W. Bain Jr., who would remain chairman.

The appointment of Mr. Romney, 43, came in conjunction with a financial reorganization that Mr. Bain said would make the firm "a recapitalized and de-leveraged firm, well positioned to take advantage of emerging worldwide business opportunities."

Bain has been burdened by debt, which is to be reduced by using assets from the liquidation of Bain Holdings Inc., an investment fund created by Bain executives in 1987

Bain & Company is the consulting firm that launched Bain Capital, and Mitt Romney, on to the world stage, and dammit, he saved that company (without laying anyone off, except the 200 people who were fired after he got there) so they could go back to showing American business how to grow itself.

By, among other populist strategies, offering their keenly-honed technical assistance in "offshoring" jobs.

I’m certainly not the captain of industry Gov. Romney is, but I’m not terribly sure how relevant any of this is to the ability to save jobs and grow the economy.

I’d've said not at all. On the other hand, I hear he had some connection to the Olympics…

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