2008 Politics » Candidates | Issues | Calendar | Dispatches | Schedules | Polls | RSS

Romney's Old Ties To Firm Pay Off

Network News

X Profile
View More Activity
By John Solomon and Matthew Mosk
Washington Post Staff Writers
Tuesday, August 14, 2007

Republican Mitt Romney, the wealthiest candidate in the presidential race, earned as much as $15 million in 2006 and early 2007 from the private equity firm he left eight years ago, helping him expand his personal fortune and bankroll his campaign.

The extent of Romney's continuing relationship with Boston-based Bain Capital Partners, which has also supplied him with scores of savvy fundraisers and well-heeled donors, was detailed in a financial disclosure report filed yesterday with the Office of Government Ethics. The report revealed the holdings of Romney's blind trust and provided the most complete accounting of his wealth, estimated at between $190 million and $250 million.

The filing, which listed 47 pages of investments spanning the globe, estimated that Romney earned between $17 million and $69 million last year.

Romney resigned from Bain in 1999 to take over the Salt Lake City Winter Olympics and, after winning the Massachusetts governorship in 2002, he placed his investment portfolio in a blind trust to avoid conflicts of interest. Nonetheless, Romney is now tapping the money and connections he gained in the private-equity world -- best known for corporate ego clashes and cutthroat leveraged buyouts -- to help finance his presidential aspirations.

Even in a field of wealthy candidates, Romney's personal fortune stands out. Former New York mayor Rudolph W. Giuliani has reported assets between $18 million and $70 million. On the Democratic side, former trial lawyer John Edwards has reported assets worth approximately $30 million, while Sen. Hillary Rodham Clinton and her husband have reported assets between $10 million and $50 million.

The documents released yesterday, which require candidates to disclose only ranges of assets and earnings, show that Romney retained a lucrative "passive" investor relationship with Bain after he left the firm. Under a severance deal that runs through Feb. 11, 2009, Romney must abide by various "non-compete, non-hire and confidentiality obligations," and in return he retains a "passive profit share as a retired partner," the documents state.

The arrangement allowed Romney to collect between $7.1 million and $15.5 million in dividends, interest and capital gains from Bain entities in 2006 and early 2007 alone. Advisers sought to distance Romney from his investments in Bain and other entities -- such as numerous foreign companies and funds -- by emphasizing that the candidate has had no control over his financial assets since he placed them in the blind trust on Jan. 1, 2003.

Romney's business success runs in the family. His father, George Romney, amassed a fortune as chairman of the now-defunct automaker American Motors before becoming Michigan governor in the 1960s.

The younger Romney secured a job in the 1970s with Boston Consulting Group before jumping to another management consulting firm called Bain & Co., where he became a vice president.

He quickly earned the trust of ownership and in 1984 was asked to co-found Bain Capital, which would play in the emerging private equity marketplace. By the time Romney stepped down in 1999, he had built Bain into one of the world's largest and most successful private equity firms, with billions in assets.

Romney struck early success by investing in emerging companies such as the upstart Staples, which promised customers they could cut office supply costs by up to half.

"He is a really cheap guy, and he was immediately attracted to that notion," said Thomas Stemberg, the former head of the Staples chain who is now an executive with Highland Capital Partners. "He has a really good gut feel for things, and he combines that with reliance on terrific analysis done by very, very smart people."

CONTINUED     1        >

More in the Politics Section

Campaign Finance -- Presidential Race

2008 Fundraising

See who is giving to the '08 presidential candidates.

Latest Politics Blog Updates

© 2007 The Washington Post Company

Network News

X My Profile
View More Activity