Unless you’ve been asleep for the last year, you know Mitt Romney was a pivotal figure in the creation and operation of Bain Capital. Willard, a.k.a. Mitt, touts this as his “private sector” experience, which undoubtedly qualifies him for the highest office in this land. He apparently feels being a man with any type of experience in the financial world is far more important than being a Constitutional Law Scholar, like our President, Barack Obama. Our President, unlike the Mormon Bishop, isn’t practiced in masterful money manipulation and debt creation. The Republican Party holds Mitt’s business acumen in such high esteem, they’re literally banking on it by throwing billions at this unsavory candidate.
I have learned of Bain’s questionable legal practices by following some of the companies raided by Willard and his gang at Bain and the tribulations faced by those whose life he destroyed. In addition to the information I’ve come across, Matt Taibbi’s Rolling Stone Article Greed and Debt: the true story of Mitt Romney and Bain Capital, and the PoliticusUSA’s (RMuse) The Vampire Squad: Meet Romney’s Bain Team that Sent Jobs Into the Twilight both elucidated aspects of Bain Capital’s corporate raider practices.
The concept is called “busting out”. White collar crooks described bust-outs as “the perfect crime.” They explained that, by using existing business laws and practices as a cover, they were able to loot and pillage, then pocket the booty without fear of criminal prosecution because, as they noted, it’s not illegal to fail in American business. “So we’re lousy businessmen,” they claim when authorities, regulators or judges would ask them what happened to all the money. Vulture capitalists, not satisfied with the loot alone from these scams have their standards. And what kind of professional bust-out artist would allow big chunks of their ill-earned dough to be siphoned off by – of all people – the feds, in form of taxes? So, total tax avoidance at the end of a successful bust-out is considered mandatory in order to maintain the first rule of a well-executed bust-out: nobody gets paid, not the banks, not the creditors and certainly not the feds. Which brings us to the world of off-shore banking and countries like Bermuda or Panama come into the picture. When full autopsies are performed on the more spectacular bust-outs you almost always find the “equity partners” hiding their identities behind opaque off-shore shell corporations (such as Sankaty High Yield Asset Investors) . Even the members of the boards of directors of these smoke-and-mirror paper corporations are “proxy directors,” these are off-shore lawyers who make a living doing nothing but pretending to sit on the boards of hundreds, even thousands, of paper corporations.
We know Bain saddles failing companies with debt, and somehow profits whether the company makes it or goes bust, as in the case of Kay Bee Toys. When they see they are going to fail, the manager (CEO Michael Glazer who was also with Mitt Romney’s Stage Stores) paid himself and Bain Capital $100 million and then filed bankruptcy. Then Bain Capital is represented by the attorney of eToys (whom sold eToys to Bain Capital/Kay Bee basically for free). The one who asked to prosecute the special bust out was Paul Traub (who was the creditors attorney in eToys and was also with Romney’s Stage Stores). Simple open and shut case, where Bain owns all the parties involved. In essence, no matter where they go or how they do it, even in literal “fire sales” to themselves, they never lose and everyone else gets fried. It’s a brilliant yet extremely insidious plan.
This is surely not the type of business model that is good for America. In fact, (using Taibbi’s words) Willard Romney is “one of the greatest and most irresponsible debt creators of all time.” Matt Taibbi, Rmuse and special councel Laser Haas have only scratched the surface. There’s a lot more if we just look. If this man and his corporate backers are going to try to do this to America, it is our obligation as patriotic citizens to stop them.
Special thanks to @Laserhaas01 for his valuable assistance with the eToys Petters Fraud case.
Recent development: the case has been reopened, this time not in Delaware but in the New York Supreme Court. See:eToys IPO Suit Against Goldman Moves to NY High Court for more information. Justice will be served! Great News.