Mitt W. Romney’s defeat in the Republican presidential primary earlier this year seemed to signal that private equity attacks would be left mostly out of the campaign. (The most direct recent critique was of Sen. John McCain’s fundraising ties to Henry R. Kravis of Kohlberg Kravis Roberts.)
But, according to Politico, Mr. Romney — a co-founder of Bain Capital — could again put a big bullseye on his former colleagues. This time, it’s because he is considered a potential candidate to become Mr. McCain’s running mate.
Last year, when Mr. McCain’s campaign was largely written off, Mr. Romney was regarded as a strong front-runner for the Republican presidential candidacy. With that sort of attention, of course, came a close look at his background and especially his ties to Bain Capital. The New York Times, for one, traced the arc of his fortune, one that dates back to his time at Bain & Company but was solidified at the consulting firm’s spinoff of its venture capital and private equity arm.
While private equity is not as under assault by pending legislation as it was last year — Congressional bills proposing tax hikes on private equity profits are considered dormant at best — it could remain a hot-button issue because of the worsened economy. Since Mr. Romney first ran for office, one of the main attacks on him was that he worked for an industry known for layoffs.
“There’s no doubt it will come up,” Mark Mellman, a strategist for Sen. John F. Kerry’s 2004 presidential campaign, told Politico. “This is an economy where people are on edge about things like downsizing and getting laid off and here’s a guy who has wielded that knife.”
Private equity has also come under fire from unions like the Service Employees International Union, which has conducted a widespread campaign against the industry. Bain Capital has been among its targets, along with Kohlberg Kravis and the Carlyle Group.
The industry has fought back, however, arguing that they create more jobs than they lay off, and that they have saved many ailing companies. Firms like Carlyle as well as the Private Equity Council, an industry lobbying group, also argue that the S.E.I.U. is picking on private equity to beef up their membership rolls.
http://dealbook.blogs.nytimes.com/2008/08/04/would-romney-resurrect-political-attacks-on-private-equity/