Obama Hits Romney on Bain as He Raises Wall Street Money
President Barack Obama’s campaign took aim at Republican Mitt Romney’s private equity experience on the same day the president is raising money at the New York apartment of Blackstone Group LP (BX) President Tony James.
A television advertisement scheduled to run in five swing states features interviews with former workers at a Kansas City, Missouri, steel mill that was taken over in 1993 by Boston-based Bain Capital LLC, the private equity firm co-founded by Romney.
“Bain Capital was the majority owner. They were responsible,” said David Foster, who is identified in the ad as the lead negotiator for workers at GST Steel, which filed for bankruptcy in 2001.
With the economy the dominant issue in the election, Obama’s campaign is seeking to turn Romney’s business background against him as Republicans assail the president for the sluggish recovery from the recession. The ad is being released amid renewed scrutiny of the financial industry following JPMorgan Chase & Co. (JPM)’s disclosure of a $2 billion trading loss.
Romney’s campaign spokeswoman said the former Massachusetts governor welcomes a debate about the economy.
“Mitt Romney helped create more jobs in his private sector experience and more jobs as governor of Massachusetts than President Obama has for the entire nation,” Andrea Saul said in an e-mail. “If the Obama administration was less concerned about pleasing their wealthy donors and more concerned about creating jobs, America would be much better off.”
Bain Capital, which Romney left in 1999 to serve as chief executive of the 2002 Olympics in Salt Lake City, Utah, released a statement saying GST Steel was slated to close without an outside investor and that Bain had an “ambitious plan” to turn it around even as the U.S. steel industry was under pressure.
“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 the statement.
Obama also has ties to Bain Capital. Jonathan Lavine, a managing director at Bain, has raised between $100,000 and $200,000 for Obama’s re-election effort, according to the Center for Responsive Politics.
The Obama advertisement will run in Iowa, Ohio, Pennsylvania, Virginia and Colorado, said campaign spokesman Ben LaBolt, who declined to say how much airtime was reserved for the spot.
Romney has called for repeal of the Dodd-Frank law, which was intended to strengthen financial regulations. He’s called it one of the laws backed by Obama that has increased the burden on businesses, costing jobs.
At the fundraiser at James’s Park Avenue apartment, Obama said it’s critical to ensure that there are “basic rules of the road in place so that the markets function in a transparent, clear way.”
In an interview for ABC’s program “The View” taped earlier in the day, Obama said JPMorgan’s trading loss shows the necessity of keeping Wall Street regulation strong.
“JPMorgan is one of the best managed banks there is,” Obama said in the interview scheduled for broadcast tomorrow. He questioned whether a weaker bank might have required government help in the same circumstances. “That’s why Wall Street reform is so important,” he said.
The criticism in Obama’s campaign ad mirrors attacks leveled at Romney during the Republican primaries. Former House Speaker Newt Gingrich and Texas Governor Rick Perry, who have since endorsed Romney, previously called the Republican front-runner a corporate raider who stripped businesses, loaded them with debt and fired their workers for profit.
At the time, James said such attacks may slow buyouts.
“Pension funds have boards, they don’t want to be giving money to an industry that has a taint,” James, 61, said Feb. 7 in an interview on Bloomberg Television’s ‘InsideTrack’ with Erik Schatzker. “Similarly, boards of directors don’t want to sell their company to organizations they don’t view as respectable. So it could be very damaging for the industry.”
Stephen Schwarzman, chairman and co-founder of Blackstone, the world’s largest private equity firm, endorsed Romney last year and held a fundraiser for the candidate at his Park Avenue apartment on Dec. 14.
Jim Messina, Obama’s campaign manager, told a gathering of Democratic donors from the financial industry in February that the president wouldn’t seek to demonize Wall Street.
Before attending the fundraiser at James’s apartment, Obama spoke at the Rubin Museum of Art at an event hosted by pop singer Ricky Martin. It was his first fundraiser targeting gay rights activists since he announced last week that he supports same-sex marriage.
“I want everybody treated fairly in this country,” Obama told about 200 donor who paid a minimum of $5,000 to attend. “We have never gone wrong when we expanded rights and responsibilities to everybody. That doesn’t weaken families, that strengthens families.”
To contact the editor responsible for this story: Steven Komarow at email@example.com