South Carolina Offers Romney Rivals Best Chance to Slow Him Down

Mitt Romney’s victories in New Hampshire and Iowa mean his rivals need to knock him off the path to the 2012 Republican nomination in South Carolina (STO1SC), the next primary state, where conditions are ripe for their cause.

It’s a state where Romney’s Northern upbringing and Mormon faith are unnatural fits. South Carolina is also home to companies where workers lost jobs after a private equity firm that Romney helped found, Bain Capital LLC, made investments, a business practice that has become a premier argument against his candidacy for his opponents.

Texas Governor Rick Perry, who will be making what may be his last stand in South Carolina, hit that theme at a town hall meeting yesterday in a Fort Mill retirement community.

Companies such as Bain “come in and loot people’s jobs, loot their pensions, loot their ability to take care of their families,” Perry said. “They’re just vultures sitting out there on the tree limb waiting for the company to get sick. And then they swoop in, they eat the carcass, they leave with that, and they leave the skeleton.”

It’s a message being echoed in the third contest of the nomination fight, which offers the best -- and possibly the last -- chance for Romney’s rivals to derail his White House bid. The outcome of the Jan. 21 primary could also help determine whether the race remains competitive or becomes a protracted inevitability.

‘It’s Personal’

“In other states, it’s not as personal as it is here,” said Katon Dawson, a former state Republican Party chairman who is backing Perry. “It’s personal. It’s hard hitting.”

Senator John McCain’s 2000 presidential campaign was derailed in South Carolina in part because of automatic phone calls to voters falsely accusing him of fathering a black baby.

The political advertising in South Carolina is likely to dwarf anything seen in New Hampshire and perhaps even Iowa. Candidates have already reserved at least $5 million in broadcast time, and the race is just beginning.

Still, Romney, 64, a former Massachusetts governor, enters the 11-day run to the primary with key assets.

He began advertising in South Carolina before his rivals. Romney spent more than $311,000 on television ads in the state through Jan. 8, according to data from New York-based Kantar Media’s CMAG, which tracks advertising. A political action committee that backs him, Restore Our Future, spent another $100,000, all of it negative in tone.

Leading in Polls

Romney is ahead in the polls. He was backed by 37 percent of those likely to vote in the South Carolina primary, according to a CNN/Time/ORC International poll taken Jan. 4-5. Former Pennsylvania Senator Rick Santorum was second with 19 percent, followed by onetime U.S. House Speaker Newt Gingrich at 18 percent, U.S. Representative Ron Paul of Texas at 12 percent and Perry at 5 percent, in a survey that had a margin of error of plus or minus 4.5 percentage points.

The two-time presidential hopeful has been endorsed by Governor Nikki Haley, a Republican who was elected in 2010 with the support of anti-tax Tea Party activists. His candidacy also could benefit -- as it did in Iowa -- from a crowded primary field that may fracture the votes of social conservatives motivated by such issues as abortion and gun rights. In 2008, 60 percent of Republican primary voters in South Carolina said they considered themselves “born again,” or evangelical Christians, exit polling showed.

‘Last Stand’

Still, Romney should expect even more intense attacks than he has seen as he attempts a history-making win, said South Carolina political veterans. No non-incumbent has captured Iowa, New Hampshire and South Carolina in a Republican primary.

“This will be the last stand for some candidates, and they will go down fighting,” said Adam Temple, a South Carolina Republican strategist who worked for McCain’s presidential primary campaign in the state four years ago.

The state’s social conservatives are “very suspicious” of Romney because they view him as a moderate New Englander, said Mark Tompkins, a political scientist at the University of South Carolina in Columbia.

The contest will play out in an economic environment that’s worse than the national average. The state’s unemployment rate was 9.9 percent in November, the most recent month available, compared with December’s national rate of 8.5 percent. That was high enough to put South Carolina in the top 10 states for the most unemployment in November.

Tough Economy

In the Bloomberg Economic Evaluation of States index, which measures the relative health of state economies, it ranks 43rd.

South Carolina’s overall economic health fell 3.4 percent from the third quarter of 2010 through the third quarter of last year, led by a 4.9 percent decline in home prices and a 4.1 percent drop in the stock prices of companies headquartered or with major facilities in the state, according to the BEES index.

The candidates are trying to find political advantage here by criticizing President Barack Obama’s handling of the nation’s economy. They’re also taking aim at his decision this month to make three National Labor Relations Board appointments without congressional approval.

Such attacks appeal to Republican voters upset about the labor board’s complaint against Boeing Co. (BA), which employs more than 5,000 in North Charleston, charging the company with setting up an airplane plant in South Carolina to avoid dealing with unionized workers in Washington State. The board dropped the complaint last month.

Government Over-reach

“People see it as another example of the federal government’s over-reach into state issues,” Temple said. “Boeing is a huge boon for the South Carolina economy, and for someone to threaten that for political reasons is staking out an extremely vulnerable position. It’s a win-win for any Republican candidate.”

Standing on airport property next to the Boeing plant, John Ledford said he plans to vote for Romney because he thinks he has the best resume for the job.

“He has the ability to get our economy going and I think he has the experience,” said Ledford, 81, a retired insurance company lawyer who lives in Charleston.

To appeal to the state’s active and veteran military community, Romney is touting his endorsement from McCain, the party’s 2008 presidential nominee who was a Navy pilot and prisoner of war in Vietnam.

Outside Groups

As was the case in Iowa, outside groups backing certain candidates are expected to play a significant role in the primary.

Political action committees known as Super PACs that can accept unlimited donations from corporations and individuals are already buying television time in the state. The pro-Romney group, Restore Our Future, said it has reserved $2.4 million in ad time and the pro-Gingrich organization, Winning Our Future, said it bought $3.4 million.

Winning Our Future is planning to release a 28-minute television documentary in South Carolina commissioned by a Perry supporter that accuses Romney of being a “corporate raider” motivated by greed.

In recent days, Gingrich, like Perry, has taken to criticizing Romney’s past leadership at Bain, suggesting that he exploited companies and fired workers to make millions for himself and his investors.

“He has broad shoulders and thick skin,” said South Carolina Treasurer Curtis Loftis, who is Romney’s state chairman. “He will be able to take whatever is thrown at him.”

To contact the reporter on this story: John McCormick in Charleston, South Carolina at Or jmccormick16@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

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