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PE a target in latest attacks on Romney

by Ira Teinowitz in Washington | Published January 10, 2012 at 2:44 PM

Pity the poor private equity capitalist.

Already unloved by Democrats -- President Obama has made clear vilifying buyout artists and other Wall Street denizens will be a major theme of his re-election campaign -- the forlorn professional investor is now under attack from, of all places, Republicans, usually reliable defenders of private industry.

The ire being directed at the industry by longtime friends is entirely political--the industry is a target because Mitt Romney rose to the top of the industry and his slim victory in the Iowa caucus made him the undisputed front-runner in the primary, making him the candidate his rivals must knock off to prevent him from seizing the nomination quickly.

Already, the advertising for South Carolina's Jan. 21 GOP primary appears to be a telethon to find a cure for private equity.

The irony is that the attacks on the industry could have been copied from the Obama campaign playbook.

Winning Our Future, the political action committee that supports former House Speaker Newt Gingrich, has made a gigantic $3.4 million ad buy in South Carolina to air radio and TV spots starting Wednesday, Jan. 11. That ad buy is one of the biggest, if not the biggest, of the state's primary.

The ad's focus is former Massachusetts governor Romney's record as founder of Bain Capital LLC and Romney's assertion that he created 100,000 jobs in that post.

Rick Tyler, senior adviser to Winning Our Future, insists his group is not attacking private investors. "We're not attacking free enterprise or the free market system," he said. The target, rather, is Romney's claim that he is a job creator, based on his years at Bain.

"An essential part of his campaign is that he spent 20 years in Bain creating jobs. But no one knows anything about the record," said Tyler. "When we looked at the research and the record, we found he made a handsome living raiding employees of their pensions and engaging in corporate mugging. It's part of the Bain story.

"He may have created 100,000 new jobs, but if so, they were not American jobs. They were in Mexico, Southeast Asia and other places overseas."

The group bought a 27-minute film about Romney called "King of Bain: When Mitt Romney Came to Town" that features stories of four workers at Bain portfolio companies who lost their jobs. The PAC's 30- and 60-second ads feature excerpts. Tyler said the whole film may be shown at events and may yet be aired on cable, but no firm plans are in place.

While the ad starts Wednesday in South Carolina, Winning Our Future is already running a trailer on the Web.

Separately, both Gingrich and Texas Gov. Rick Perry on Monday started criticizing Romney and Bain in interviews and in speeches.

Appearing on NBC's "Today" show, Gingrich said Bain "apparently looted the companies, left people unemployed and walked off with millions of dollars."

Perry, campaigning in South Carolina, suggested on Monday Romney and Bain "looted" a Gaffney, S.C., company and got "rich off failures ... sticking someone else with the bill."

"I had to shake my head yesterday when one of the wealthiest men ever to run for president ... the son of a multimillionaire -- said 'I know what's it's like to worry whether you're going to get fired.' "

"I have no doubt that Mitt Romney worried about pink slips," said Perry. "With as many jobs as Bain Capital killed, I'm sure he was worried he would run out of them."

Romney's campaign office, which has dismissed the attacks as "an attack on free enterprise" in press accounts, didn't return a call requesting comment.

Steve Judge, interim president and CEO of the Private Equity Growth Capital Council, suggested the attacks mischaracterize the industry. "There is a lot of misinformation being spread, purely for political purposes and on both sides of the aisle, as it pertains to private equity," he said.

"What's been lost is an understanding of the critical role that private equity investment plays in growing the U.S. economy and delivering more than a trillion dollars in investment returns to pension funds, endowments and charitable foundations.

He said that through private equity investments, "many businesses grow and are strengthened, and often jobs are created over the long term."

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