News / USA

Bain Capital Becomes an Issue in US Presidential Campaign

Republican presidential candidate Romney speaks in Hillsborough, New Hampshire, May 18, 2012.Republican presidential candidate Romney speaks in Hillsborough, New Hampshire, May 18, 2012.
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Republican presidential candidate Romney speaks in Hillsborough, New Hampshire, May 18, 2012.
Republican presidential candidate Romney speaks in Hillsborough, New Hampshire, May 18, 2012.
Ken Bredemeier
Private corporations seldom assume a prominent role in U.S. presidential election campaigns.  But analysts say that could be the case this year as attention is focused on Bain Capital, an investment company headquartered in the northeastern city of Boston. 

It was founded by the presumptive Republican Party presidential nominee, Mitt Romney, and his profits from operating the company have made him a very wealthy man.  And ahead of the November election, his Democratic opponent, incumbent President Barack Obama, is questioning Romney's role in the company when he was at Bain. 

Bain Capital is a private equity firm.  At such investment companies, wealthy individuals and financial institutions pool their capital to buy corporations and then try to increase their profitability before selling them, typically at a considerable profit.  Bain is one of the most prominent venture capital companies in the United States.  And the firm says its partners manage about $60 billion in assets in 65 companies.

The company says its mission is "produce superior investment returns for our investors."  This week, Bain, along with several other U.S. private equity firms, sold the second-largest movie theater chain in America - AMC Entertainment Holdings - to a Chinese conglomerate for $2.6 billion.

Bain was started by Mitt Romney and others in 1984, and he headed the company until he left it in 1999.  He says the companies Bain bought and nurtured during his tenure created some 100,000 jobs.  Now, Romney says his experience at Bain, more than his tenure as governor of the northeastern state of Massachusetts, gives him the background and skills needed to boost America's sluggish economy.

At a recent campaign rally, Romney told voters that President Obama has failed in trying to resurrect the U.S. economy from its worst downturn since the Great Depression of the 1930s.

"This is the longest recovery from a recession in American history," said Romney. "And people are suffering because of the policies of this administration."

Romney said that if he is elected, he will transform the deficit-ridden U.S. government. "With my vision, we're going to finally have a balanced budget in this country," he said. "I'll get us on track and finally stop spending more than we take in."

Mr. Obama and his campaign have a sharply different view of Romney's tenure at Bain.  They are airing commercials in politically key states, outlining how some of Bain's investments went sour - costing thousands of workers their jobs, even as Bain turned massive profits on its investments.

Although the president this week described private equity as a "healthy part of the free market," he emphasized its downside.

"I will say today, I think there are folks who do good work in that area and there are times where they identify the capacity for the economy to create new jobs or new industries, but understand that their priority is to maximize profits and that's not always going to be good for communities or businesses or workers," said President Obama.

Mr. Obama dismissed Romney's contention that his years at Bain made him qualified to fix the American economy.

"And so if your main argument for how to grow the economy is, 'I knew how to make a lot of money for investors,' then you're missing what this job [being president of the United States] is about," said Obama. "It doesn't, it doesn't mean you weren't good at private equity, but that's not what my job is as president.  My job is to take into account everybody, not just some.  My job is to make sure that the country is growing not just now, but 10 years from now and 20 years from now."

Many U.S. voters might not have heard of Bain Capital or maybe know little about the company's operations during the time Mitt Romney headed the company.  But with less than six months until Election Day, analysts say it is almost certain that Bain will play a major role in this year's presidential campaign.

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