Romney Hits Obama on Solyndra, But Bain Got Government Subsidies, Too

Mitt, doin' work. Brian Cahn/Zuma

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.


At Thursday night’s CNN debate, Mitt Romney attacked the Obama administration’s loan guarantees for the now-bankrupt solar panel manufacturer Solyndra as a prime instance of the government picking winners and losers in business, and losing big. But Bain Capital, the private equity firm Romney founded, frequently received similar help from state governments, including subsidies and tax breaks. The subsidy-tracking folks over at Good Jobs First compiled a vast database on just how much states have bailed out companies that were bought and—in a number of cases—gutted by Bain Capital. Some of the highlights:

Sealy. A year after the 1997 buyout of this leading mattress company by Bain and other private equity firms, Sealy received $600,000 from state and local authorities in North Carolina to move its corporate offices, a research center and a manufacturing plant from Ohio (Greensboro News & Record, March 31, 1998). In 2004 Bain and its partners sold Sealy to another private equity group.

GS Industries. In 1996 American Iron Reduction LLC, a joint venture of GS Industries (which had been taken private by Bain in 1993) and Birmingham Steel, sought some $20 million in tax breaks in connection with its plan to build a plant in Louisiana’s St. James Parish (Baton Rouge Advocate, April 6, 1996). As the United Steelworkers union noted recently, GS Industries later applied for a federal loan guarantee, but before the deal could be implemented the company went bankrupt.

AMC Entertainment. After being promised more than $40 million in subsidies, this movie chain (bought in 2004 by Bain and other private equity firms) agreed to move its headquarters from downtown Kansas City, Missouri to a nearby suburb across the state line in Kansas. The deal was criticized as an egregious case of taxpayer-financed sprawl. [Even though Romney left Bain in 1999, he’s continued reaping millions in lightly taxed investment income since then.]

As for the office supply store Staples, a supposed success Romney frequently touts? In 1996, the company chose to move its distribution center to Maryland in exchange for a healthy $4.2 million subsidy deal.

Romney says that President Obama’s record of aiding private enterprise proves the president doesn’t have a clue about how capitalism works—that, in the Obama’s view, capitalism necessarily relies on the generosity of government largesse. But if we’re to judge Romney’s understanding of capitalism based on how he ran the show at Bain, it’s tough to see how business success doesn’t often rely on government help.

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate