Cash, Advice on Tap at Romney's Old Firm
Sunday, October 21, 2007
At key moments during his rise in politics, Republican presidential candidate Mitt Romney has returned to the same reliable source for money, advice and corporate muscle: Bain Capital, the investment company he founded in the 1980s.
The business executives who helped him start the firm and cement its early investment deals were called back to duty when he ran for Senate in 1994, revived the 2002 Winter Olympics, won the Massachusetts governorship and launched his bid for the White House. They fully expect another call should he win the presidency.
"I'm on my fifth 'once in a lifetime opportunity' with Mitt," said Robert F. White, one of Romney's early partners at Bain whose latest assignment is as chairman of Romney's presidential campaign.
Romney frequently invokes his success at Bain, the team he assembled there and the shrewd decision-making that helped turn struggling businesses into gold mines. And in what he regards as perhaps his greatest personal triumph -- reviving the tarnished Salt Lake City Olympics -- his Bain colleagues played an important role.
When Romney was tapped to head the scandal-plagued Salt Lake City Olympic organizing committee, he lined up Bain's consulting arm to analyze the Olympics' accounting ledgers, and he summoned past and current Bain partners to offer their expertise, all at no charge. He targeted several companies that had been acquired by Bain or had installed Romney on their corporate boards for Olympic sponsorships, raising tens of millions of dollars. He also solicited Bain partners for $1 million in personal donations.
In his autobiography, Romney wrote that he severed ties with Bain in 1999 when he took the Olympic job and told his partners he wasn't coming back. But R. Bradford Malt, one of Bain's lawyers, who now manages Romney's personal finances, said Romney took a leave of absence, "partly because of the speed it all happened and partly because it was a limited gig." That meant Romney retained full, sole ownership of the firm for two more years as he worked on the Olympics.
Malt, who was designated by the campaign to address Romney's time at Bain, said Romney finally resigned and reduced his role at the company to that of a passive investor in 2001 when it became clear that he was going to run for Massachusetts governor after the Olympics. The campaign declined to comment further.
Romney started Bain Capital in 1984 in Boston and built it into one of the largest and most successful equity firms in the United States, with billions in assets and a successful record of leveraging buyouts of famed but struggling companies such as Domino's Pizza, Staples and the pharmacy chain Duane Reade. Under Romney, Bain earned a reputation for turning around companies through shrewd cost-cutting and growth strategies.
In the process, Romney's personal fortune soared to as much as a quarter-billion dollars. Though he left the company in 2001, Romney and his family still own a significant stake in the equity firm through his blind trust, which in 2006 and early 2007 earned him $7 million to $15 million.
"The people I know got involved with him because they believed in him, not because they were invested with him or depending on him for their financial support," said White, who took leaves from Bain to help Romney run for Senate in 1994 and to help run Romney's transition team when he won the Massachusetts governorship in 2002.
White said Romney asked him to leave the firm in February 1999 for several weeks to join him -- without pay -- in Salt Lake City to assess the Games' finances and management.
What they found was demoralizing, White said. Ten members of the International Olympic Committee had resigned or were expelled in the wake of a bribery scheme that engulfed the bid to bring the Games to Salt Lake City. The ledgers showed the Games were hundreds of millions of dollars in the red, and prior Olympic sponsors were reluctant to donate for fear of being associated with the problems.