The Mitt Romney few know

Prior to the 2008 election very few people had ever heard of Mitt Romney. While Romney’s father, George W. Romney was a famous auto industry executive and twice-elected governor of Michigan, Mitt was a virtual unknown until his involvement as the President and CEO of the 2002 Salt Lake City Olympic Games Organizing Committee. Even today as Mitt runs to be the GOP presidential nominee most aren’t even aware his real name is Willard Mitt Romney.

Mitt worked for his father as an intern in the governor’s office, and was present at the 1964 Republican National Convention when his moderate father battled conservative party nominee Barry Goldwater over issues of civil rights and ideological extremism. The George Romney – Barry Goldwater battles of 1964 became a full-on battle for the soul of the Republican Party.

Mitt Romney

After graduating from college Mitt joined the Boston Consulting Group as a management consultant and two years later went to work for Bain and Company. Mitt quickly rose within Bain and in 1984 was given the opportunity to start a new venture with Bill Bain, the now infamous Bain Capital.

Initially Bain Capital focused on venture capital opportunities, but Mitt quickly changed Bain Capital’s focus from startups to the business of leveraged buyouts: buying existing firms with money mostly borrowed against their assets, partnering with existing management to apply the “Bain way” to their operations and then selling them off in a few years. Bain Capital lost most of its money in many early leveraged buyouts, but then found deals that yielded large returns. During the 14 years Mitt Romney headed the company Bain Capital’s average annual internal rate of return on realized investments was 113 percent, but much of this profit was earned from a relatively few deals. Bain Capital’s overall success and failure rate was about 50/50. The much vaunted success of Bain Capital is more a mirage than fact with all but a few deals making significant money for Mitt and Bain only through deconstructing and piecing out acquisitions.

Bain Capital’s leveraged buyouts sometimes led to layoffs, either soon after acquisition or later after the firm had sold out. How jobs added compared to those lost is unknown due to a lack of records and Bain Capital’s penchant for privacy on behalf of itself and its investors. In any case, maximizing the value of acquired companies and the return to Bain’s investors, not job creation, was the firm’s fundamental goal.

Bain Capital’s acquisition of Ampad exemplified a deal where it profited handsomely from early payments and management fees, even though the subject company itself ended up going into bankruptcy.

Dade Behring was another case where Bain Capital received an eightfold return on its investment, but the company itself was saddled with debt and laid off over a thousand employees before Bain Capital exited (the company subsequentl went into bankruptcy, with more layoffs, before recovering and prospering). Bain was among the private equity firms that took the most fees in such cases. Mitt said in retrospect, “It is one thing that if I had a chance to go back I would be more sensitive to. It is always a balance. Great care has got to be taken not to take a dividend or a distribution from a company that puts that company at risk.”

Mitt’s Bain Capital management is one of those great dilemmas for Conservatives. Is capitalism at any cost an ideal that Conservatives wish to align with? Does the GOP want to send a message of pro-capitalism of the sort made famous by Gordon Gekko as played by Michael Douglas in the 1987 film Wall Street? Is the GOP ready to say, “Greed is good. Greed works.” If Mitt is the nominee you can be certain that the Democrats will play out the Gordon Gekko similarities to the hilt.

Mitt’s father’s moderate conservative views were endowed upon Mitt, who demonstrated his penchant for what some would call liberal values in a failed attempt to unseat the late Edward Kennedy for Massachusetts Senator in 1994. During the run Mitt repeatedly separated himself from the views of Ronald Reagan and George H.W. Bush in what many called his run to the left of Ted Kennedy. Perhaps Mitt truly held these views or as a businessman skilled in charming his clientele he said the words he believed would appeal to the Massachusetts voters. No one really knows. In what was a near-draw approaching the election Kennedy was able to attack Mitt’s seemingly shifting political views on issues such as abortion and on the treatment of workers at the Ampad plant owned by Bain Capital, which resulted in Kennedy easily being re-elected to the U.S. Senate.

After his loss to Ted Kennedy in ’94 Mitt returned to Bain Capital where he remained until taking on the debt-plagued Salt Lake City Olympic Games Organizing Committee. Using his success with the Olympics as a springboard Mitt returned to the political battlegrounds beating Shannon O’Brien in the 2002 Massachusetts gubernatorial race. Romney ran as a political outsider, saying he was “not a partisan Republican” but rather a “moderate” with “progressive” views.

In the article Mitt Romney: RINO or Conservative, there are some troubling facts for Conservatives involving Mitt’s tenure as Massachusetts Governor. Mitt governed in a manner not inconsistent with his statements in the campaign. When he ran for the presidential nomination in 2008 Mitt argued that many of his policies were due to the fact that he faced a state legislature that was over 80 percent Democratic and he often vetoed bills knowing they would be overridden. Yet all too often Mitt bowed to the left-wing legislature and signed bills that are the anathema to conservative values; the most famous being the Massachusetts health care bill that was the basis for Obamacare.

After serving one term as Massachusetts Governor, Mitt returned to private life but with an eye on a bigger prize: the White House. On February 13, 2007, at the Henry Ford Museum in Dearborn, Michigan Mitt announced a run for the GOP nomination for president. The announcement turned out to be the highlight of Mitt’s 2008 presidential bid.

Romney gained a small amount of momentum after winning the Iowa Straw Poll, but once the primary season began things took a decidedly negative turn. Mike Huckabee’s win in the Iowa Caucus, followed by Mitt losing in his neighboring state of New Hampshire set a bad tone. While managing to win in Michigan, losses in South Carolina and Florida sealed his fate. While Mitt stayed in the race till after the Super Tuesday primaries he was little more than a dead man walking.

Altogether Mitt won 11 primaries and caucuses in 2008, received about 4.7 million total votes and garnered about 280 delegates. Mitt spent over $110 million during the campaign, including $45 million of his own money.

Mitt in 2012?

Since 2008 Mitt has stayed close to politics hoping to follow in the footsteps of many past GOP candidates: being the next in line. Mike Huckabee’s choice to stay out of the 2012 race made Mitt the next logical candidate. Broad support from establishment Republicans began to create an air of inevitability for Mitt, but as Hillary Clinton well knows, a message of inevitability is equal parts liability and advantage. The same questions that ensnared Mitt in 2008 followed him into the 2012 race.

While early polls showed Mitt matching up better against Obama than any of the other candidates those numbers have consistently diminished. Mitt’s ability to debate against the sharp skills of Newt Gingrich have made many question his ability to stand up to the onslaught of negative advertising certain to be part of the 2012 presidential race. Depending upon pro-Romney political action committee ads to attack his opponents while performing acceptably but not outstanding at any of the debates has all but evaporated any sense of inevitability.

The GOP finds itself embroiled in a true dilemma: are grass roots Conservatives willing to nominate someone that they don’t believe is a true Conservative? Will they nominate someone with even greater negatives than Mitt in belief that given Obama’s record they can beat him with anyone so why not choose someone who best matches up with their values? After more than 20 debates are Republicans ready to nominate someone with Mitt’s laid-back style of debating knowing that Obama is a skilled debater?

It’s a true dilemma that shall play out over the next few months.