Rolling Stone: The Secret Bailout That Saved Mitt Romney
Did someone say secret FDIC bailout...
New investigative piece from Rolling Stone. No wonder Romney tried so hard to keep this hidden.
"The federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million"
"Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding a bailout from the feds."
"The bonus loophole gave Romney a perverse form of leverage: If the banks and the FDIC didn't give in to his outrageous demands and forgive much of Bain's debts, Romney would raid the firm's coffers, and push it into the bankruptcy."
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Rolling Stone: The Federal Bailout That Saved Mitt Romney
By Tim Dickinson
Mitt Romney likes to say he won't "apologize" for his success in business. But what he never says is "thank you" – to the American people – for the federal bailout of Bain & Company that made so much of his outsize wealth possible.
According to the candidate's mythology, Romney took leave of his duties at the private equity firm Bain Capital in 1990 and rode in on a white horse to lead a swift restructuring of Bain & Company, preventing the collapse of the consulting firm where his career began. When The Boston Globe reported on the rescue at the time of his Senate run against Ted Kennedy, campaign aides spun Romney as the wizard behind a "long-shot miracle," bragging that he had "saved bank depositors all over the country $30 million when he saved Bain & Company."
In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.
The FDIC documents on the Bain deal – which were heavily redacted by the firm prior to release – show that as a wealthy businessman, Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm.
"None of us wanted to see Bain be the laughingstock of the business world," recalls a longtime Romney lieutenant who asked not to be identified. "But Mitt's reputation was on the line."
The trouble began in 1984, when Bain & Company spun off Bain Capital to engage in leveraged buyouts and put Romney in charge of the new operation. To free up money to invest in the new business, founder Bill Bain and his partners cashed out much of their stock in the consulting firm – leaving it saddled with about $200 million in debt. (Romney, though not a founder, reportedly profited from the deal.) "People will tell you that Bill raped the place clean, was greedy, didn't know when to stop," a former Bain consultant later conceded. "Did they take too much out of the firm? You bet."
The FDIC documents make clear what happened next: "Soon after the founders sold their equity," analysts reported, "business began to drop off." First came scandal: In the late 1980s, a Bain consultant became a key figure in an illegal stock manipulation scheme in London. The firm's reputation took a hit, and it fired 10 percent of its consulting force. By the time the 1989 recession began, Bain & Company found itself going broke fast. Cash flows weren't enough to service the debt imposed by the founders, and the firm could barely make payroll. In a panic, Bill Bain tapped Romney, his longtime protégé, to take the reins.
Continue reading at Rolling Stone...
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Related:
Mitt Romney's Federal Bailout: The Documents
From Matt Taibbi:
The True Story of Mitt Romney and Bain Capital
Oct 6, 2012 at 11:21 AM
Reader Comments (49)
http://www.cnbc.com/id/48826970
http://www.rawstory.com/rs/2012/08/29/romney-party-yacht-cracker-bay-flies-cayman-islands-flag-in-tampa/
http://www.breitbart.com/Big-Journalism/2012/08/29/NBC-Whites-Only-Speech-Policy
The leaders on GOP foreign policy are still all Bush alums
http://www.salon.com/2012/08/29/neocons_carry_bushs_banner/
Yes, and they all have dual U.S./Israeli citizenship
Mitt's supposed animosity toward debt, on the other hand, is a calculated fraud:
"what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth."
http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829
DB the FDIC story should be a story in itself I told J Koutoulas this should be posted here you could likely turn it into a great story listen to this video the FDIC is discussed in relation to the safety of your savings as well as the story out of the NY Slimes below
MFG, Injustice, & Your Bank Account w J Koutoulas
http://www.youtube.com/watch?v=jrbUqDl3uls&feature=youtu.be
Freeh Calls for Peace in Fight Over MF Global Money
snip
"But even as the trustees opened the door to a settlement, Mr. Freeh criticized Mr. Giddens for recently suing Jon S. Corzine and other top MF Global executives. Mr. Corzine, a former New Jersey governor, was MF Global’s chief executive. In the filing on Wednesday, Mr. Freeh formally objected to Mr. Giddens joining a lawsuit filed by the firm’s customers.
He accused Mr. Giddens of “attempting to assign claims that belong to and benefit the general estate to representatives of the customers.” Mr. Freeh is also considering legal action against some executives, which could be complicated by Mr. Giddens’s lawsuit. Some people close to Mr. Freeh would have preferred that Mr. Giddens join their case rather than teaming up with the customers.
But Mr. Jarrell argued that Mr. Freeh has “some inherent conflicts in opposing” Mr. Giddens’s actions. Some of the executives named as defendants in the case, including the chief financial officer, are currently employed by Mr. Freeh."
in full
http://dealbook.nytimes.com/2012/08/29/freeh-calls-for-peace-in-fight-over-mf-global-money/
Related
Report: Cronyism, political donations likely behind Obama, Holder failure to charge any bankers after 2008 financial meltdown
Read more: http://dailycaller.com/2012/08/07/report-cronyism-political-donations-likely-behind-obama-holder-failure-to-charge-any-bankers-after-2008-financial-meltdown/#ixzz252hzkrEO
FDIC STATISTICS: READ 'EM AND WEEP
snip
Just following up with citations and illumination on the whole propaganda meme that is the FDIC, because, as far as I can tell, the vast majority of people think that the FDIC is a magical, omnipotent entity that has infinite resources and will magically swoop in to "take care of them" like a magic flying unicorn.
This is what happens when you have a civilization filled with emotional children with exactly ZERO critical thinking skills. You have to hand it to the Communist infiltrators. They did a damn good job of brainwashing and psychologically destroying four generations of human beings.
Per the Q4 2011 FDIC Chief Financial Officer's report to the Board, published on March 30, 2012, the FDIC's Deposit Insurance Fund had a balance of $11.8 billion dollars.
HERE'S THE LINK.
Bank deposits in the United States at the same time are estimated to be between $8 TRILLION and $10 TRILLION. Let's be conservative and say the number is $8TTT.
11,800,000,000 divided by 8,000,000,000,000 equals 0.001475, which I will round UP to 0.0015.
That is read as "fifteen hundredths of one percent". It isn't one percent, it is fifteen hundredths of one percent. That is how much the FDIC is carrying to back all of those little signs on the teller windows that say "Each Depositor insured to at least $250,000. Backed by the full faith and credit of the United States government."
more
http://barnhardt.biz/
Corzine says MF trustee encroaching on his defense
http://newsandinsight.thomsonreuters.com/Legal/News/2012/08_-_August/Corzine_says_MF_trustee_encroaching_on_his_defense/
I hadn't seen that youtube clip. Thanks.
Still Think That Money Market Fund Is “Cash”?
http://dollarcollapse.com/capital-controls/still-think-that-money-market-fund-is-cash/
It's another great piece by Taibbi. Romney is a world-class dolt, and unfortunately so is Obama. F* the system. I'm voting for Ron Paul as a write-in.
Gary Johnson Campaign Fiscal Checkup
http://market-ticker.org/akcs-www?post=210827
The Johnson Deception
http://market-ticker.org/akcs-www?post=210803
Gary Johnson's ACTUAL Fiscal Record
http://market-ticker.org/akcs-www?post=210816
btw DB how about making the FDIC/Corzine info into a story of it's own? I used to blog but I don't anymore and hey that would be a huge story in/of itself
I'll be doing the same DB. My conscience will not allow me to vote for the 1% and thats who a Romney or Obama administration will serve and protect while flushing the rest of the country down the toilet.
Ol Dick Chainee, is the only person I can think of that did it more to the American People than Romnee...
And im going to go up flying in the skys looking for a voting ballot with my punch tool and vote for RP. And im not letting any lose chads hangin either. If I cant find a honest voteing machine im gona land and go home and have a drink.
Its not evan a "Dog & Pony Show" anymore. Just the sheep dont know it yeat......! Tex
Drexel Burnham Lambert if memory serves.
You're right Josie, there is no added value there, or at least very little. LBOs are work for vultures. Take out equity, add massive debt and get out leaving the company generally in ruins.
Regarding Mittens and his MA miracle...a friend of mine sent me this today. He's a carpenter from Massachusetts.
A Modest Proposal to the MA Commissioner of Banks August 30, 2012
http://www.foreclosurehamlet.org/profiles/blogs/a-modest-proposal-to-the-ma-commissioner-of-banks-august-30-2012
This will never even be considered (following the law? GASP!) because it makes too much sense.
http://www.youtube.com/watch?v=W_Z_PMfDFLg&feature=related
That's a nice piece of work, that letter. As I'm sure you know, however, the following language proposed for the model notice of default is going to present something of an issue:
"A statement under oath, that the foreclosing entity is in possession of the original wet ink Note and Mortgage and all intervening orginal wet ink assignments of both the Note and the Mortgage and that they contain valid indorsements and were executed in accordance with the statutes of fraud."
During the securitizaion craze, pretty much the entire sub-prime lending industry never conveyed the promissory notes to anyone (securitizer, depositor, trustee--NO ONE). Thus, the notes are long gone. I'm quite certain that Marley, the letter's author, knows this.
But why would he think that a bank wouldn't sign off on the language anyway, even under penalty of perjury? They have shown no hesitation in perpetrating fraud on the court everywhere (well, at least in the 23 judicial foreclosure states), which crime is so severe that no statute of limitations even applies. Like the guy says in Once Upon a Time in the West, once you've killed four, it's easy to make it five.
So, given the banksters' cavalier attitude toward jailable offenses, what's the purpose of the language quoted above?
Just wondering....
Further, attempts to "repair" their breech of their own contracts triggers significant negative tax consequences. Once the 90 day window defined in the contract is closed, the tax incentive that partly fueled this fraud goes out the window.
See IRS Bulletin on IRS forms 860A-G:
http://www.irs.gov/irb/2009-20_IRB/ar11.html
I'll bet a dollar to a donut the IRS is sound asleep on enforcing this as well...but it's there plain as day. So, throw tax-evasion on top of oll the other frauds/crimes committed without consequence.
I think what Bob is ultimately pleading for is enforcement, although since so few people actually raise their voices in protest, this will be one more pissing in the wind exercize.
His Amicus Curiae pasted below might also interest you. Supposedly, all this is too "complicated" for our judicial system to grasp. But again I emphasize that he is not a law professor or securities expert...he's a carpenter...and manages to grasp this quite ably.
http://www.scribd.com/doc/92702858/HSBC-et-al-vs-Jodi-Matt-Amicus-Curiae-of-Robert-P-Marley
I'll have to agree with you again that the perpetrators of this disaster will have no reluctance whatsoever to lie under oath about anything because there is no consequence to their bad acts.
The reason for this is that too few people actually do anything about it. I'm still steamed over the "Open Letter" I wrote, and the nearly negligable response to it. I think I took those two judges apart pretty good. Not with rhetoric but actual court transcripts right out of their own mouths. They should be recused as I called for. The only thing I got out of that was placing my own head firmly on the chopping block...for nothing.
Hamlet members, 5000 of them (who focus on this topic exclusively) especially pissed me off. RIght now there remains under 200 signatures on the petition. The vast majority of those who signed came from Zero Hedge.
Even though I have no personal business in that court that I bashed, it makes me feel like I'm "pimping" on DB's pages (and others) when I link it. So, DB I will not be offended if you yank this comment because I did link it here two or three times already. I won't do it again...it's almost a lost cause anyway.
The Honorable Presiding Justice Alice P. Gibney: Recuse Justice's Allen P. Rubine and Michael A. Silverstein.
(The secure protocol link below does not convert to clickable)
https://www.change.org/en-GB/petitions/the-honorable-presiding-justice-alice-p-gibney-recuse-justice-s-allen-p-rubine-and-michael-a-silverstein
An Open Letter to the State of Rhode Island Superior Court June 9 2012 Regarding Foreclosure Fraud
http://www.scribd.com/doc/96454240/An-Open-Letter-to-the-State-of-Rhode-Island-Superior-Court-June-9-2012-Regarding-Foreclosure-Fraud
The banking cartel knows that should they be required to follow the law (pick a law...any law) they are screwed. I found the remarks by the Illinois Bankers Association chilling.
http://www.scribd.com/doc/100413646/Illinois-Bankers-Association-Response-to-Supreme-Court-Committee-4-13-2102
Frankly, we can't survive much more of their financial junk "innovations".
In the U.S., the source of money is debt. That is, it is lent into existence by banks. A straightforward explanation is here:
http://agoodhuman.wordpress.com/2009/09/09/economy-1-how-money-is-created
What Sage is talking about is REAL money, i.e., gold and silver, which unlike debt-based money, (1) has no counterparty and can't be tracked, (2) has functioned as money for 5000 years throughout every society that it's ever been found in, and (3) does not by its mere existence enrich bankers for doing nothing.
Thanks for your comments. You touch on the fundamental issues/questions re: real money (precious metals), debt, fiat currency, asset value, junk commercial paper and the interaction of these. All of the corruption that we have seen recently and in history with financial schemes are traced to and explained by this interaction. Trading nothing of value for something of value. Usury. Junk for cash. Lower cash value for higher cash value, etc.
It seems to me, in this world, always living within your means, eschewing junk paper, holding some precious metals, having little or no debt, and remaining liquid (to a certain point) is the way to live your financial life. I always remind myself (especially when I get worked-up over the latest fraud on me and us) that, in the end, none of this will matter because life is finite, for everyone. And, this is not fresh news to most readers here, our Republic is finite as well. It will end. It's a certainty.
To quote Frank Costello (played by Jack Nicholson) from The Departed: "We all are [on our way out]. Act accordingly."
http://www.newadvent.org/summa/3078.htm
http://www.paulcraigroberts.org/2012/09/04/the-republicans-cross-the-rubicon-paul-craig-roberts
This is easily the most depressing thing I’ve read all year, even though parts of it made me bust out laughing. Roberts does not hold back on major false idols. His take on the RNC’s dynamic with Eastwood and Ron Paul is particularly interesting.
"The filing said that Citibank had extended Mr. Otillar the loan as part of a fraudulent scheme intended to benefit Citibank and Dewey [& LeBeouf]’s management. By recruiting him and other partners to join the financially troubled firm in the months leading up to its demise — and collecting millions of dollars from them — Dewey’s partners enriched themselves and kept the firm afloat."
http://dealbook.nytimes.com/2012/09/03/ex-partner-at-dewey-and-leboeuf-says-citibank-hid-firms-financial-troubles/?smid=tw-nytimesdealbook&seid=auto
http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_parks_their_cash_at_bain_88KSQrw8BXciEidja2ZQXN
http://occupycorporatism.com/audit-of-ny-fed-reveals-technocrats-creation-and-cover-up-of-global-financial-crash/
Sep 3, 2012 at 11:21 AM | Josie
....@ Josie, Its to bad, there is no shortage with people acting un-accordingly. They all have stole and cheated everyone and everything, till there is "Nothing Left".......
Now they are trying to tare each other down, and there is nothing left to tare down. So next, maby they will start to kill one an other. We are nothing anymore becouse they have long taken everything from us long time ago......
All "We" can do is sit by and watch it all cave in and sink.....They Prostatuted the system till its Empty.
That's an interesting but questionable link. The story reads as if the GAO audit of the Fed occurred in July of this year. It was actually last year, when we learned that the Fed had lent $16 TRILLION to the bailed out banks between 2007 and 2010.
http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
The story then discusses at length an anonymous Deutsche Bank source who talks about a Chinese connection to the TARP bailout 4 years ago.
That stories like this are still circulating without rebuttal underscores the fact that we STILL don't have any credible information as to precisely what lay behind that panic-fueled bailout. On the contrary, in the intervening four years, all of the data that's come out in fits and spurts, such as the GAO's revelation of $16 trillion in loans, tends only to expose the official TARP story--it saved the financial system!!!--as fucking ludicrous.
How, by way of but one example, can anyone without a bag over his head contend that Citigroup's $45 billion TARP injection saved that bank when it's undisputed that Citigroup got $2.5 TRILLION in loans from the Fed (which we know from the GAO)?
More and more, the data confirm what many of us suspected all along: TARP was passed so Wall Street could pay itself bonuses.
As for what the purpose of TARP was in the first place -- it beats me. The only thing I can figure is that Ben and Hank thought they had to DO SOMETHING and TARP was the best they could come up with. As we've documented on the Bail many times before, TARP didn't actually save anything, except, as you point out, banker bonuses. The moves that saved the system (and the status quo ante) came from the Fed for the most part --- not just loans, but TAF and TALF and the commercial paper facility that started up immediately after TARP was passed. My suspicion is that the effects of TARP were not intentional, at least on the government's part. It's amazing, though, to hear people talk about TARP on the tee-vee as if it actually saved the system --- and isn't it great we made a profit on it. Bizarre.
Mitt Romney is even worse than Sarah Palin, who's smart enough to know that $250K isn't a middle class income. Mitt Romney has set a new low standard and failed to achieve it in a single bound.
Romney held the system hostage. Did you read the whole article? Look, we aren't Obama fans around here, for many good reasons, but that doesn't mean we go quietly into the night supporting Romney. We expose the truth on all politicians, regardless of party. Here's a snip from later in the RS story. You should really read the whole thing.
"What's more, the bonus loophole gave Romney a perverse form of leverage: If the banks and the FDIC didn't give in to his demands and forgive much of Bain's debts, Romney would raid the firm's coffers, pushing it into the very bankruptcy that the loan agreement had been intended to avert. The losers in this game would not only be Bain's creditors – including the federal government – but the firm's nearly 1,000 employees worldwide."
http://www.rollingstone.com/politics/news/the-federal-bailout-that-saved-mitt-romney-20120829#ixzz29reW1DNE
http://www.youtube.com/watch?v=p6nYkDJWIPI
What a slime. I shudder how he is "going to fix America" We are already bankrupt. What trlck has he up in his sleeve?