The Bain of his existence: Romney’s money making ties to China and Russia

Posted by AzBlueMeanie:

Two investigative reports out today on Bain Capital and how Romney profited from business ties of which he has been critical on the campaign trail.

The New York Times reports Romney’s Trade Message and Bain’s China Ties:

[T]here is a twist to the Asimco story that would not fit neatly into a Romney stump speech: Since 2010, it has been owned by Bain Capital,
the private equity firm founded by Mr. Romney, who has as much as $2.25
million invested in three Bain funds with large stakes in Asimco and at
least seven other Chinese businesses, according to his 2012 candidate
financial disclosure and other documents.

That and other China-related holdings by Bain funds in which Mr. Romney
has invested are a reminder of how he inhabits two worlds that at times
have come into conflict during his campaign for the White House.

As a candidate, Mr. Romney uses China as a punching bag. He accuses
Beijing of unfairly subsidizing Chinese exports, artificially holding
down the value of its currency to keep exports cheap, stealing American
technology and hacking into corporate and government computers.

“How is it China’s been so successful in taking away our jobs?” he asked
recently. “Well, let me tell you how: by cheating.”

But his private equity dealings, both while he headed Bain and since, complicate that message.

Mr. Romney’s campaign insists he has no control over his investments
since they are held in a blind trust. That said, a confidential
prospectus for one of the Bain funds, obtained by The New York Times,
promotes China as a good investment for some of the same reasons that
Mr. Romney has said concern him: “Strong fundamentals” like
manufacturing wages 85 percent lower than what Americans earn, vast
foreign exchange reserves and the likelihood that China will surpass the
United States as the world’s largest economy.

“Accordingly, Bain Capital expects to see an increasing array of
high-growth companies available for investment,” the prospectus says,
noting the relative dearth of private equity in China.

Among the companies in which the Bain funds have invested is a global
auto parts maker that is in the process of closing a factory in Illinois
and moving most of the equipment and jobs to Jiangsu Province, where
the Chinese government has built it a new plant; a Chinese electronics
retailer accused by Microsoft of selling computers with pirated
software; and a Hong Kong-based Chinese appliance maker that was sued
for copying another company’s design for a deep-fat fryer.

The campaign said Mr. Romney put his fortune, estimated at $250 million,
in a “blind trust” when he became Massachusetts governor in 2003. “The
trustee of the blind trust has said publicly that he will endeavor to
make the investments in the blind trust conform to Governor Romney’s
positions, and whenever it comes to his attention that there is
something inconsistent, he ends the investment,” the statement said.

Mittens Romney in 1994 on so-called blind trusts: "The blind trust is an age old ruse, if you will, which is to say, you can always tell a blind trsut what it can and cannot do."

There is much more on Bain's China investments. Romney’s Trade Message and Bain’s China Ties.

The Huffington Post has an investigative report on how Romney profited from investments in tobacco companies in Russia, which puts him at odds with his Mormon faith that forbids smoking. Mitt Romney's Bain made millions on Big Tobacco in U.S., Russia:

As the Soviet Union splintered in the early-1990s, Sushovan Ghosh
packed his colleagues into a van and chugged across the collapsing
nation, hitting depressed towns and famished cities, busted up factories
and lonely kiosks. In each ragged destination, they stopped long enough
to interview cigarette smokers.

Ghosh plied the citizenry with free cigarettes and, sometimes, McDonald’s hamburgers.

They were pursuing a lucrative target: determining what Russian
smokers wanted out of a cigarette — specifically, a Western cigarette.
"We had to develop a brand the Russians would smoke," Ghosh explained to
The Huffington Post. For one study, they interviewed more than 1,000
smokers. "We stopped the bus and offered them cigarettes. And they all
queued."

Ghosh’s work for cigarette companies was chaotic, unbridled and,
ultimately, deadly. To Mitt Romney and his colleagues at Bain & Co.,
it was a chance to rake in money. Ghosh said he reported directly to
Romney, who was excited about the Russian market. "He was my boss,"
Ghosh said.

* * *

Although Romney's activities helming the private equity giant Bain
Capital have drawn significant attention, his role at Bain & Co. has
received almost no public scrutiny. A Huffington Post investigation
into Bain's tobacco work found that the consulting firm helped Philip
Morris increase its revenues in the U.S., and aided two other tobacco
titans as they vied to move forcefully into the Russian market.

* * *

Bain's Russian business wasn’t about family-friendly products. Those
deals were about cigarettes. And that work sent Bain into the shadows of
the post-Soviet economy -– including helping to orchestrate anonymous,
convoluted cash transactions to keep major deals hidden from regulators
and competitors. It was part of a free-for-all that involved wholesale
looting of major industries, as Western technocrats helped facilitate
the transfer of Russia's wealth into the hands of a few oligarchs. That
set in motion a populist backlash that helped sweep Vladimir Putin into
power, giving the Kremlin dominance over a country Romney has lately
called our "number one geopolitical enemy."

Bain was in the middle of all of this, putting to work the same
skills it had sharpened in the U.S. — using taxpayer money to help it
gain footholds in Russia. In March 1993, the American government gave
Bain & Co. a $3.9 million contract to advise Boris Yeltsin's
administration on the privatization of the Russian economy, according
records detailing the arrangement uncovered by The Huffington Post.
Romney's consultants helped foreign firms and aspiring oligarchs decide
how to corral Russia's riches — including writing an official manual
that outlined how best to navigate the process. At the same time, Bain
leveraged its contacts with senior Russian officials to arrange
sweetheart deals for its tobacco clients.

* * *

Documents chronicling Bain's tobacco work are housed at the University of California at San Francisco's Legacy Tobacco Documents library.
Following a tip from a reader who wrote to
OffTheBus@huffingtonpost.com, The Huffington Post reviewed hundreds of
Bain documents from Legacy's digital archives, along with materials
gathered from industry experts and government databases. The Huffington
Post also interviewed former Bain employees who worked on the tobacco
projects, additional American experts, tobacco control advocates in
Moscow, and those with experience with Russia's early, unbridled
privatization years.

There is much more on Bain's Russia investments. Mitt Romney's Bain made millions on Big Tobacco in U.S., Russia.