Obama targets Romney’s private equity past

President Barack Obama’s reelection campaign has released an advertisement highlighting Mitt Romney's and Bain Capital’s investment in GST Steel.

The reelection campaign of President Barack Obama has set its crosshairs on Bain Capital

The firm, which was co-founded by presumed Republican Party nominee Mitt Romney, is the subject of a new advertisement and website that showcases the firm’s investment in the now-bankrupt GS Industries. 

A two-minute advertisement featuring interviews with former steel workers, all of whom are critical of Bain’s

Romney

management of the company, will run in battle ground states like Iowa, Ohio, Pennsylvania, Virginia and Colorado. A six-minute extended version is available at www.romneyeconomics.com.

In the advertisement, GS labor negotiator David Foster says: “Private equity is not, per se, bad. But what Bain Capital did was not capitalism, it was bad management. The decision makers were governed by a different set of rules than the rest of us played by.”

Along with GS Industries, the new website also targets Bain’s investments in medical diagnostics company Dade Behring and Stage Stores. 

“We are not a political organization, and take no public position on any candidate. Mitt Romney retired from Bain Capital over 13 years ago, but we understand that in a political campaign our exemplary 28-year record will be distorted and complex business situations will be portrayed in a simplistic way,”  Bain said in a statement on the ad.

The firm's $100 million investment in the company came at a time when the US steel industry was struggling, and that nearly half of all US steel companies went into bankruptcy, according to a statement. 

The Romney campaign could not be reached for comment, but issued the following statement on its website: “We welcome the Obama campaign’s attempt to pivot back to jobs and a discussion of their failed record. President Obama has many questions to answer as to why his Administration used the stimulus to reward wealthy campaign donors with taxpayer money for bad ideas like Solyndra, but 23 million Americans are still struggling to find jobs.”

The Obama campaign did not respond to requests for comment. 

Romney’s background in private equity has been a mixed blessing over the course of his political career. While the former Massachusetts Governor has been quick to tout his background as a successful businessman and a jobs creator, his track record also includes several high-profile instances of layoffs and difficult restructurings, which have provided fodder for his opponents over the years. 

What [attacking his PE background] tends to do is, if the Obama campaign goes in that direction, then it’s going to be a debate about Romney and business and I don’t know if that’s necessarily a debate they want to have.

Tad Devine

The recent Obama ads bear a strong resemblance to those ran by Senator Ted Kennedy’s campaign in 1994, when Romney posed a viable threat to the long-tenured legislator’s reelection. To respond to the challenger, Kennedy campaign strategist Tad Devine created an advertisement using interviews with laid-off workers from former Bain investments. The tactic worked, and Romney eventually lost what was his first campaign for national office. 

In a recent interview with Private Equity International, Devine cautioned against engaging Romney too intensely on private equity, as he’s made great strides as a campaigner since 1994. 

“Romney’s been around a couple of times now. And he’s been through a pretty grueling primary process. And I think the arguments against him, that the President and his campaign are going to make, are not going to centre on what Romney did or didn’t do as an investment banker or something involved in banking. I think that’s going to be a piece of the story,” Devine said. 

“What [attacking his PE background] tends to do is, if the Obama campaign goes in that direction, then it’s going to be a debate about Romney and business and I don’t know if that’s necessarily a debate they want to have.”