Before I get started today, I’d just like to bid George Tierney Jr. of Greenville, South Carolina a good morning and hope that things are going well with him and his Google problem. I’m sure he’ll get it all sorted out soonish. Maybe Alan Derschowitz is already on the case. One can hope.
On a depressingly similar note, another star has fallen. Perhaps too low, perhaps not. Just remember, it’s not Cory Booker’s fault if he’s not who you thought he was.
A ThinkProgress examination of New Jersey campaign finance records for Booker’s first run for Mayor — back in 2002 — suggests a possible reason for his unease with attacks on Bain Capital and venture capital. They were among his earliest and most generous backers.
Contributions to his 2002 campaign from venture capitalists, investors, and big Wall Street bankers brought him more than $115,000 for his 2002 campaign. Among those contributing to his campaign were John Connaughton ($2,000), Steve Pagliuca ($2,200), Jonathan Lavine ($1,000) — all of Bain Capital. While the forms are not totally clear, it appears the campaign raised less than $800,000 total, making this a significant percentage.
Not to invite the left-wing’s version of the Dick Lugar treatment, but people might want to acquaint themselves a little bit with the record of Cory Booker’s predecessor, the history of Newark, New Jersey, and Booker’s performance in office before they jump to the conclusion that his relationship to Wall Street is the worst thing since the repeal of Glass-Steagall. I’d argue that the prerequisite for bringing Newark back from the depths of hell was to win the confidence of Wall Street investors and get capital flowing back into the city. Since Facebook just had an IPO, I guess Mark Zuckerberg’s $100 million donation to Newark’s schools can now be retroactively considered a Wall Street donation.
None of this is to say that his performance on Meet the Press wasn’t ridiculous. Both the points he made and the job he did were pathetic. I just thought, you know, someone might point out that the Mayor of Newark has reasons beyond ambition and venality for palling around with Wall Street folks.
If Think Progress wants to blast him out of the water…well, I think there’s another side to the argument.
Sackcloth should be unnecessary.
It might be more appropriate for people like Mark Negrin at ABC News, who accuses the president of attacking private equity without understanding what it is. Let me paint you a picture based on the reporting in this Politico article:
Bain Capital made a $5 million investment in a company called Ampad. Seven years later, it had made a $100 million profit off that investment. How did they do it? The company itself was in bankruptcy with over $400 million in debt. Creditors to the company received two-tenths of a cent on the dollar.
But a final bankruptcy filing on the firm in last December also shows what happened to Ampad creditors. Out of a debt load of $170 million owed to unsecured creditors, Ampad ended up paying out less than $330,000, the filings show.
That amounts to two-tenths of a cent for every dollar owed in that case.
Among those owed money was the pension fund for Niagara Envelope, a New York-based company that Ampad picked up during Bain’s tenure, and where there were a number of job losses. It was owed over $700,000, but was on track to get back under $1,500, the records show.
Ampad also owed more than $240,000 to the Pension Benefit Guaranty Corp., but it was granted a recoup of only $458.07.
They stiffed unsecured creditors for over $169 million. They stiffed a pension fund for almost $700,000. How hard is it to make a $100 million return on investment when you sell off all the assets, eliminate salaries, destroy pensions, and refuse to pay anyone the company has worked with?
And how is this not just robbery? How does Mitt Romney’s firm walk away with a $100 million while a pension fund is robbed of $700,000?
This isn’t hyperbole. It’s a serious question. And the answer, I suspect, is hidden in the complexities of tax and bankruptcy laws which the geniuses at Bain Capital had mastered.
We shouldn’t be talking about whether Romney’s fortune is evidence that he knows how to make America rich. We should be asking why what he did wasn’t against the law.
Maybe someone can Tweet George Tierney Jr. of Greenville, South Carolina and see if he has an answer.