The great criticism of Mitt Romney, from both sides of the aisle, has always been that he doesn't stand for anything. He's a flip-flopper, they say, a lightweight, a cardboard opportunist who'll say anything to get elected.
The critics couldn't be more wrong. Mitt Romney is no tissue-paper man. He's closer to being a revolutionary, a backward-world version of Che or Trotsky, with tweezed nostrils instead of a beard, a half-Windsor instead of a leather jerkin. His legendary flip-flops aren't the lies of a bumbling opportunist – they're the confident prevarications of a man untroubled by misleading the nonbeliever in pursuit of a single, all-consuming goal. Romney has a vision, and he's trying for something big: We've just been too slow to sort out what it is, just as we've been slow to grasp the roots of the radical economic changes that have swept the country in the last generation.
The incredible untold story of the 2012 election so far is that Romney's run has been a shimmering pearl of perfect political hypocrisy, which he's somehow managed to keep hidden, even with thousands of cameras following his every move. And the drama of this rhetorical high-wire act was ratcheted up even further when Romney chose his running mate, Rep. Paul Ryan of Wisconsin – like himself, a self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who'd be honored to tell Oliver Twist there's no more soup left. By selecting Ryan, Romney, the hard-charging, chameleonic champion of a disgraced-yet-defiant Wall Street, officially succeeded in moving the battle lines in the 2012 presidential race.
Like John McCain four years before, Romney desperately needed a vice-presidential pick that would change the game. But where McCain bet on a combustive mix of clueless novelty and suburban sexual tension named Sarah Palin, Romney bet on an idea. He said as much when he unveiled his choice of Ryan, the author of a hair-raising budget-cutting plan best known for its willingness to slash the sacred cows of Medicare and Medicaid. "Paul Ryan has become an intellectual leader of the Republican Party," Romney told frenzied Republican supporters in Norfolk, Virginia, standing before the reliably jingoistic backdrop of a floating warship. "He understands the fiscal challenges facing America: our exploding deficits and crushing debt."
Debt, debt, debt. If the Republican Party had a James Carville, this is what he would have said to win Mitt over, in whatever late-night war room session led to the Ryan pick: "It's the debt, stupid." This is the way to defeat Barack Obama: to recast the race as a jeremiad against debt, something just about everybody who's ever gotten a bill in the mail hates on a primal level.
Last May, in a much-touted speech in Iowa, Romney used language that was literally inflammatory to describe America's federal borrowing. "A prairie fire of debt is sweeping across Iowa and our nation," he declared. "Every day we fail to act, that fire gets closer to the homes and children we love." Our collective debt is no ordinary problem: According to Mitt, it's going to burn our children alive.
And this is where we get to the hypocrisy at the heart of Mitt Romney. Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a "turnaround specialist," a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm. But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.
By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It's almost enough to make you think he really is qualified for the White House.
The unlikeliness of Romney's gambit isn't simply a reflection of his own artlessly unapologetic mindset – it stands as an emblem for the resiliency of the entire sociopathic Wall Street set he represents. Four years ago, the Mitt Romneys of the world nearly destroyed the global economy with their greed, shortsightedness and – most notably – wildly irresponsible use of debt in pursuit of personal profit. The sight was so disgusting that people everywhere were ready to drop an H-bomb on Lower Manhattan and bayonet the survivors. But today that same insane greed ethos, that same belief in the lunatic pursuit of instant borrowed millions – it's dusted itself off, it's had a shave and a shoeshine, and it's back out there running for president.
Mitt Romney, it turns out, is the perfect frontman for Wall Street's greed revolution. He's not a two-bit, shifty-eyed huckster like Lloyd Blankfein. He's not a sighing, eye-rolling, arrogant jerkwad like Jamie Dimon. But Mitt believes the same things those guys believe: He's been right with them on the front lines of the financialization revolution, a decades-long campaign in which the old, simple, let's-make-stuff-and-sell-it manufacturing economy was replaced with a new, highly complex, let's-take-stuff-and-trash-it financial economy. Instead of cars and airplanes, we built swaps, CDOs and other toxic financial products. Instead of building new companies from the ground up, we took out massive bank loans and used them to acquire existing firms, liquidating every asset in sight and leaving the target companies holding the note. The new borrow-and-conquer economy was morally sanctified by an almost religious faith in the grossly euphemistic concept of "creative destruction," and amounted to a total abdication of collective responsibility by America's rich, whose new thing was making assloads of money in ever-shorter campaigns of economic conquest, sending the proceeds offshore, and shrugging as the great towns and factories their parents and grandparents built were shuttered and boarded up, crushed by a true prairie fire of debt.
Mitt Romney – a man whose own father built cars and nurtured communities, and was one of the old-school industrial anachronisms pushed aside by the new generation's wealth grab – has emerged now to sell this make-nothing, take-everything, screw-everyone ethos to the world. He's Gordon Gekko, but a new and improved version, with better PR – and a bigger goal. A takeover artist all his life, Romney is now trying to take over America itself. And if his own history is any guide, we'll all end up paying for the acquisition.
Willard "Mitt" Romney's background in many ways suggests a man who was born to be president – disgustingly rich from birth, raised in prep schools, no early exposure to minorities outside of maids, a powerful daddy to clean up his missteps, and timely exemptions from military service. In Romney's bio there are some eerie early-life similarities to other recent presidential figures. (Is America really ready for another Republican president who was a prep-school cheerleader?) And like other great presidential double-talkers such as Bill Clinton and George W. Bush, Romney has shown particular aptitude in the area of telling multiple factual versions of his own life story.
"I longed in many respects to actually be in Vietnam and be representing our country there," he claimed years after the war. To a different audience, he said, "I was not planning on signing up for the military. It was not my desire to go off and serve in Vietnam."
Like John F. Kennedy and George W. Bush, men whose way into power was smoothed by celebrity fathers but who rebelled against their parental legacy as mature politicians, Mitt Romney's career has been both a tribute to and a repudiation of his famous father. George Romney in the 1950s became CEO of American Motors Corp., made a modest fortune betting on energy efficiency in an age of gas guzzlers and ended up serving as governor of the state of Michigan only two generations removed from the Romney clan's tradition of polygamy. For Mitt, who grew up worshipping his tall, craggily handsome, politically moderate father, life was less rocky: Cranbrook prep school in suburban Detroit, followed by Stanford in the Sixties, a missionary term in which he spent two and a half years trying (as he said) to persuade the French to "give up your wine," and Harvard Business School in the Seventies. Then, faced with making a career choice, Mitt chose an odd one: Already married and a father of two, he left Harvard and eschewed both politics and the law to enter the at-the-time unsexy world of financial consulting.
"When you get out of a place like Harvard, you can do anything – at least in the old days you could," says a prominent corporate lawyer on Wall Street who is familiar with Romney's career. "But he comes out, he not only has a Harvard Business School degree, he's got a national pedigree with his name. He could have done anything – but what does he do? He says, 'I'm going to spend my life loading up distressed companies with debt.'?"
Romney started off at the Boston Consulting Group, where he showed an aptitude for crunching numbers and glad-handing clients. Then, in 1977, he joined a young entrepreneur named Bill Bain at a firm called Bain & Company, where he worked for six years before being handed the reins of a new firm-within-a-firm called Bain Capital.
In Romney's version of the tale, Bain Capital – which evolved into what is today known as a private equity firm – specialized in turning around moribund companies (Romney even wrote a book called Turnaround that complements his other nauseatingly self-complimentary book, No Apology) and helped create the Staples office-supply chain. On the campaign trail, Romney relentlessly trades on his own self-perpetuated reputation as a kind of altruistic rescuer of failing enterprises, never missing an opportunity to use the word "help" or "helped" in his description of what he and Bain did for companies. He might, for instance, describe himself as having been "deeply involved in helping other businesses" or say he "helped create tens of thousands of jobs."
The reality is that toward the middle of his career at Bain, Romney made a fateful strategic decision: He moved away from creating companies like Staples through venture capital schemes, and toward a business model that involved borrowing huge sums of money to take over existing firms, then extracting value from them by force. He decided, as he later put it, that "there's a lot greater risk in a startup than there is in acquiring an existing company." In the Eighties, when Romney made this move, this form of financial piracy became known as a leveraged buyout, and it achieved iconic status thanks to Gordon Gekko in Wall Street. Gekko's business strategy was essentially identical to the Romney–Bain model, only Gekko called himself a "liberator" of companies instead of a "helper."
Here's how Romney would go about "liberating" a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it's called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.
Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company's management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.
But here's the catch. When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.
Now your troubled firm – let's say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.
"That interest," says Lynn Turner, former chief accountant of the Securities and Exchange Commission, "just sucks the profit out of the company."
Fortunately, the geniuses at Bain who now run the place are there to help tell you whom to fire. And for the service it performs cutting your company's costs to help you pay off the massive debt that it, Bain, saddled your company with in the first place, Bain naturally charges a management fee, typically millions of dollars a year. So Tricycle Inc. now has two gigantic new burdens it never had before Bain Capital stepped into the picture: tens of millions in annual debt service, and millions more in "management fees." Since the initial acquisition of Tricycle Inc. was probably greased by promising the company's upper management lucrative bonuses, all that pain inevitably comes out of just one place: the benefits and payroll of the hourly workforce.
Once all that debt is added, one of two things can happen. The company can fire workers and slash benefits to pay off all its new obligations to Goldman Sachs and Bain, leaving it ripe to be resold by Bain at a huge profit. Or it can go bankrupt – this happens after about seven percent of all private equity buyouts – leaving behind one or more shuttered factory towns. Either way, Bain wins. By power-sucking cash value from even the most rapidly dying firms, private equity raiders like Bain almost always get their cash out before a target goes belly up.
This business model wasn't really "helping," of course – and it wasn't new. Fans of mob movies will recognize what's known as the "bust-out," in which a gangster takes over a restaurant or sporting goods store and then monetizes his investment by running up giant debts on the company's credit line. (Think Paulie buying all those cases of Cutty Sark in Goodfellas.) When the note comes due, the mobster simply torches the restaurant and collects the insurance money. Reduced to their most basic level, the leveraged buyouts engineered by Romney followed exactly the same business model. "It's the bust-out," one Wall Street trader says with a laugh. "That's all it is."
Private equity firms aren't necessarily evil by definition. There are many stories of successful turnarounds fueled by private equity, often involving multiple floundering businesses that are rolled into a single entity, eliminating duplicative overhead. Experian, the giant credit-rating tyrant, was acquired by Bain in the Nineties and went on to become an industry leader.
But there's a key difference between private equity firms and the businesses that were America's original industrial cornerstones, like the elder Romney's AMC. Everyone had a stake in the success of those old businesses, which spread prosperity by putting people to work. But even private equity's most enthusiastic adherents have difficulty explaining its benefit to society. Marc Wolpow, a former Bain colleague of Romney's, told reporters during Mitt's first Senate run that Romney erred in trying to sell his business as good for everyone. "I believed he was making a mistake by framing himself as a job creator," said Wolpow. "That was not his or Bain's or the industry's primary objective. The objective of the LBO business is maximizing returns for investors." When it comes to private equity, American workers – not to mention their families and communities – simply don't enter into the equation.
Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in "management" fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren't crying: They'd made more than $100 million on a $5 million investment.
To recap: Romney, who has compared the devilish federal debt to a "nightmare" home mortgage that is "adjustable, no-money down and assigned to our children," took over Ampad with essentially no money down, saddled the firm with a nightmare debt and assigned the crushing interest payments not to Bain but to the children of Ampad's workers, who would be left holding the note long after Romney fled the scene. The mortgage analogy is so obvious, in fact, that even Romney himself has made it. He once described Bain's debt-fueled strategy as "using the equivalent of a mortgage to leverage up our investment."
Romney has always kept his distance from the real-life consequences of his profiteering. At one point during Bain's looting of Ampad, a worker named Randy Johnson sent a handwritten letter to Romney, asking him to intervene to save an Ampad factory in Marion, Indiana. In a sterling demonstration of manliness and willingness to face a difficult conversation, Romney, who had just lost his race for the Senate in Massachusetts, wrote Johnson that he was "sorry," but his lawyers had advised him not to get involved. (So much for the candidate who insists that his way is always to "fight to save every job.")
This is typical Romney, who consistently adopts a public posture of having been above the fray, with no blood on his hands from any of the deals he personally engineered. "I never actually ran one of our investments," he says in Turnaround. "That was left to management."
In reality, though, Romney was unquestionably the decider at Bain. "I insisted on having almost dictatorial powers," he bragged years after the Ampad deal. Over the years, colleagues would anonymously whisper stories about Mitt the Boss to the press, describing him as cunning, manipulative and a little bit nuts, with "an ability to identify people's insecurities and exploit them for his own benefit." One former Bain employee said that Romney would screw around with bonuses in small amounts, just to mess with people: He would give $3 million to one, $3.1 million to another and $2.9 million to a third, just to keep those below him on edge.
The private equity business in the early Nineties was dominated by a handful of takeover firms, from the spooky and politically connected Carlyle Group (a favorite subject of conspiracy-theory lit, with its connections to right-wingers like Donald Rumsfeld and George H.W. Bush) to the equally spooky Democrat-leaning assholes at the Blackstone Group. But even among such a colorful cast of characters, Bain had a reputation on Wall Street for secrecy and extreme weirdness – "the KGB of consulting." Its employees, known for their Mormonish uniform of white shirts and red power ties, were dubbed "Bainies" by other Wall Streeters, a rip on the fanatical "Moonies." The firm earned the name thanks to its idiotically adolescent Spy Kids culture, in which these glorified slumlords used code names, didn't carry business cards and even sang "company songs" to boost morale.
The seemingly religious flavor of Bain's culture smacks of the generally cultish ethos on Wall Street, in which all sorts of ethically questionable behaviors are justified as being necessary in service of the church of making money. Romney belongs to a true-believer subset within that cult, with a revolutionary's faith in the wisdom of the pure free market, in which destroying companies and sucking the value out of them for personal gain is part of the greater good, and governments should "stand aside and allow the creative destruction inherent in the free economy."
That cultlike zeal helps explains why Romney takes such a curiously unapologetic approach to his own flip-flopping. His infamous changes of stance are not little wispy ideological alterations of a few degrees here or there – they are perfect and absolute mathematical reversals, as in "I believe that abortion should be safe and legal in this country" and "I am firmly pro-life." Yet unlike other politicians, who at least recognize that saying completely contradictory things presents a political problem, Romney seems genuinely puzzled by the public's insistence that he be consistent. "I'm not going to apologize for having changed my mind," he likes to say. It's an attitude that recalls the standard defense offered by Wall Street in the wake of some of its most recent and notorious crimes: Goldman Sachs excused its lying to clients, for example, by insisting that its customers are "sophisticated investors" who should expect to be lied to. "Last time I checked," former Morgan Stanley CEO John Mack sneered after the same scandal, "we were in business to be profitable."
Within the cult of Wall Street that forged Mitt Romney, making money justifies any behavior, no matter how venal. The look on Romney's face when he refuses to apologize says it all: Hey, I'm trying to win an election. We're all grown-ups here. After the Ampad deal, Romney expressed contempt for critics who lived in "fantasy land." "This is the real world," he said, "and in the real world there is nothing wrong with companies trying to compete, trying to stay alive, trying to make money."
In the old days, making money required sharing the wealth: with assembly-line workers, with middle management, with schools and communities, with investors. Even the Gilded Age robber barons, despite their unapologetic efforts to keep workers from getting any rights at all, built America in spite of themselves, erecting railroads and oil wells and telegraph wires. And from the time the monopolists were reined in with antitrust laws through the days when men like Mitt Romney's dad exited center stage in our economy, the American social contract was pretty consistent: The rich got to stay rich, often filthy rich, but they paid taxes and a living wage and everyone else rose at least a little bit along with them.
But under Romney's business model, leveraging other people's debt means you can carve out big profits for yourself and leave everyone else holding the bag. Despite what Romney claims, the rate of return he provided for Bain's investors over the years wasn't all that great. Romney biographer and Wall Street Journal reporter Brett Arends, who analyzed Bain's performance between 1984 and 1998, concludes that the firm's returns were likely less than 30 percent per year, which happened to track more or less with the stock market's average during that time. "That's how much money you could have made by issuing company bonds and then spending the money picking stocks out of the paper at random," Arends observes. So for all the destruction Romney wreaked on Middle America in the name of "trying to make money," investors could have just plunked their money into traditional stocks and gotten pretty much the same returns.
The only ones who profited in a big way from all the job-killing debt that Romney leveraged were Mitt and his buddies at Bain, along with Wall Street firms like Goldman and Citigroup. Barry Ritholtz, author of Bailout Nation, says the criticisms of Bain about layoffs and meanness miss a more important point, which is that the firm's profit-producing record is absurdly mediocre, especially when set against all the trouble and pain its business model causes. "Bain's fundamental flaw, at least according to the math," Ritholtz writes, "is that they took lots of risk, use immense leverage and charged enormous fees, for performance that was more or less the same as [stock] indexing."
'I'm not a Romney guy, because I'm not a Bain guy," says Lenny Patnode, in an Irish pub in the factory town of Pittsfield, Massachusetts. "But I'm not an Obama guy, either. Just so you know."
I feel bad even asking Patnode about Romney. Big and burly, with white hair and the thick forearms of a man who's stocked a shelf or two in his lifetime, he seems to belong to an era before things like leveraged debt even existed. For 38 years, Patnode worked for a company called KB Toys in Pittsfield. He was the longest-serving employee in the company's history, opening some of the firm's first mall stores, making some of its canniest product buys ("Tamagotchi pets," he says, beaming, "and Tech-Decks, too"), traveling all over the world to help build an empire that at its peak included 1,300 stores. "There were times when I worked seven days a week, 16 hours a day," he says. "I opened three stores in two months once."
Then in 2000, right before Romney gave up his ownership stake in Bain Capital, the firm targeted KB Toys. The debacle that followed serves as a prime example of the conflict between the old model of American business, built from the ground up with sweat and industry know-how, and the new globalist model, the Romney model, which uses leverage as a weapon of high-speed conquest.
In a typical private-equity fragging, Bain put up a mere $18 million to acquire KB Toys and got big banks to finance the remaining $302 million it needed. Less than a year and a half after the purchase, Bain decided to give itself a gift known as a "dividend recapitalization." The firm induced KB Toys to redeem $121 million in stock and take out more than $66 million in bank loans – $83 million of which went directly into the pockets of Bain's owners and investors, including Romney. "The dividend recap is like borrowing someone else's credit card to take out a cash advance, and then leaving them to pay it off," says Heather Slavkin Corzo, who monitors private equity takeovers as the senior legal policy adviser for the AFL-CIO.
Bain ended up earning a return of at least 370 percent on the deal, while KB Toys fell into bankruptcy, saddled with millions in debt. KB's former parent company, Big Lots, alleged in bankruptcy court that Bain's "unjustified" return on the dividend recap was actually "900 percent in a mere 16 months." Patnode, by contrast, was fired in December 2008, after almost four decades on the job. Like other employees, he didn't get a single day's severance.
I ask Slavkin Corzo what Bain's justification was for the giant dividend recapitalization in the KB Toys acquisition. The question throws her, as though she's surprised anyone would ask for a reason a company like Bain would loot a firm like KB Toys. "It wasn't like, 'Yay, we did a good job, we get a dividend,'" she says with a laugh. "It was like, 'We can do this, so we will.'?"
At the time of the KB Toys deal, Romney was a Bain investor and owner, making him a mere beneficiary of the raping and pillaging, rather than its direct organizer. Moreover, KB's demise was hastened by a host of genuine market forces, including competition from video games and cellphones. But there's absolutely no way to look at what Bain did at KB and see anything but a cash grab – one that followed the business model laid out by Romney. Rather than cutting costs and tightening belts, Bain added $300 million in debt to the firm's bottom line while taking out more than $120 million in cash – an outright looting that creditors later described in a lawsuit as "breaking open the piggy bank." What's more, Bain smoothed the deal in typical fashion by giving huge bonuses to the company's top managers as the firm headed toward bankruptcy. CEO Michael Glazer got an incredible $18.4 million, while CFO Robert Feldman received $4.8 million and senior VP Thomas Alfonsi took home $3.3 million.
And what did Bain bring to the table in return for its massive, outsize payout? KB Toys had built a small empire by targeting middle-class buyers with value-priced products. It succeeded mainly because the firm's leaders had a great instinct for what they were making and selling. These were people who had been in the specialty toy business since 1922; collectively, they had millions of man-hours of knowledge about how the industry works and how toy customers behave. KB's president in the Eighties, the late Saul Rubenstein, used to carry around a giant computer printout of the company's inventory, and would fall asleep reading it on the weekends, the pages clasped to his chest. "He knew the name and number of all those toys," his widow, Shirley, says proudly. "He loved toys."
Bain's experience in the toy industry, by contrast, was precisely bupkus. They didn't know a damn thing about the business they had taken over – and they never cared to learn. The firm's entire contribution was $18 million in cash and a huge mound of borrowed money that gave it the power to pull the levers. "The people who came in after – they were never toy people," says Shirley Rubenstein. To make matters worse, former employees say, Bain deluged them with requests for paperwork and reports, forcing them to worry more about the whims of their new bosses than the demands of their customers. "We took our eye off the ball," Patnode says. "And if you take your eye off the ball, you strike out."
In the end, Bain never bothered to come up with a plan for how KB Toys could meet the 21st-century challenges of video games and cellphone gadgets that were the company's ostensible downfall. And that's where Romney's self-touted reputation as a turnaround specialist is a myth. In the Bain model, the actual turnaround isn't necessary. It's just a cover story. It's nice for the private equity firm if it happens, because it makes the acquired company more attractive for resale or an IPO. But it's mostly irrelevant to the success of the takeover model, where huge cash returns are extracted whether the captured firm thrives or not.
"The thing about it is, nobody gets hurt," says Patnode. "Except the people who worked here."
Romney was a prime mover in the radical social and political transformation that was cooked up by Wall Street beginning in the 1980s. In fact, you can trace the whole history of the modern age of financialization just by following the highly specific corner of the economic universe inhabited by the leveraged buyout business, where Mitt Romney thrived. If you look at the number of leveraged buyouts dating back two or three decades, you see a clear pattern: Takeovers rose sharply with each of Wall Street's great easy-money schemes, then plummeted just as sharply after each of those scams crashed and burned, leaving the rest of us with the bill.
In the Eighties, when Romney and Bain were cutting their teeth in the LBO business, the primary magic trick involved the junk bonds pioneered by convicted felon Mike Milken, which allowed firms like Bain to find easy financing for takeovers by using wildly overpriced distressed corporate bonds as collateral. Junk bonds gave the Gordon Gekkos of the world sudden primacy over old-school industrial titans like the Fords and the Rockefellers: For the first time, the ability to make deals became more valuable than the ability to make stuff, and the ability to instantly engineer billions in illusory financing trumped the comparatively slow process of making and selling products for gradual returns.
Romney was right in the middle of this radical change. In fact, according to The Boston Globe – whose in-depth reporting on Romney and Bain has spanned three decades – one of Romney's first LBO deals, and one of his most profitable, involved Mike Milken himself. Bain put down $10 million in cash, got $300 million in financing from Milken and bought a pair of department-store chains, Bealls Brothers and Palais Royal. In what should by now be a familiar outcome, the two chains – which Bain merged into a single outfit called Stage Stores – filed for bankruptcy protection in 2000 under the weight of more than $444 million in debt. As always, Bain took no responsibility for the company's demise. (If you search the public record, you will not find a single instance of Mitt Romney taking responsibility for a company's failure.) Instead, Bain blamed Stage's collapse on "operating problems" that took place three years after Bain cashed out, finishing with a $175 million return on its initial investment of $10 million.
But here's the interesting twist: Romney made the Bealls-Palais deal just as the federal government was launching charges of massive manipulation and insider trading against Milken and his firm, Drexel Burnham Lambert. After what must have been a lengthy and agonizing period of moral soul-searching, however, Romney decided not to kill the deal, despite its shady financing. "We did not say, 'Oh, my goodness, Drexel has been accused of something, not been found guilty,'?" Romney told reporters years after the deal. "Should we basically stop the transaction and blow the whole thing up?"
In an even more incredible disregard for basic morality, Romney forged ahead with the deal even though Milken's case was being heard by a federal district judge named Milton Pollack, whose wife, Moselle, happened to be the chairwoman of none other than Palais Royal. In short, one of Romney's first takeover deals was financed by dirty money – and one of the corporate chiefs about to receive a big payout from Bain was married to the judge hearing the case. Although the SEC took no formal action, it issued a sharp criticism, complaining that Romney was allowing Milken's money to have a possible influence over "the administration of justice."
After Milken and his junk bond scheme crashed in the late Eighties, Romney and other takeover artists moved on to Wall Street's next get-rich-quick scheme: the tech-Internet stock bubble. By 1997 and 1998, there were nearly $400 billion in leveraged buyouts a year, as easy money once again gave these financial piracy firms the ammunition they needed to raid companies like KB Toys. Firms like Bain even have a colorful pirate name for the pools of takeover money they raise in advance from pension funds, university endowments and other institutional investors. "They call it dry powder," says Slavkin Corzo, the union adviser.
After the Internet bubble burst and private equity started cashing in on Wall Street's mortgage scam, LBO deals ballooned to almost $900 billion in 2006. Once again, storied companies with long histories and deep regional ties were descended upon by Bain and other pirates, saddled with hundreds of millions in debt, forced to pay huge management fees and "dividend recapitalizations," and ridden into bankruptcy amid waves of layoffs. Established firms like Del Monte, Hertz and Dollar General were all taken over in a "prairie fire of debt" – one even more destructive than the government borrowing that Romney is flogging on the campaign trial. When Hertz was conquered in 2005 by a trio of private equity firms, including the Carlyle Group, the interest payments on its debt soared by a monstrous 80 percent, forcing the company to eliminate a third of its 32,000 jobs.
In 2010, a year after the last round of Hertz layoffs, Carlyle teamed up with Bain to take $500 million out of another takeover target: the parent company of Dunkin' Donuts and Baskin-Robbins. Dunkin' had to take out a $1.25 billion loan to pay a dividend to its new private equity owners. So think of this the next time you go to Dunkin' Donuts for a cup of coffee: A small cup of joe costs about $1.69 in most outlets, which means that for years to come, Dunkin' Donuts will have to sell about 2,011,834 small coffees every month – about $3.4 million – just to meet the interest payments on the loan it took out to pay Bain and Carlyle their little one-time dividend. And that doesn't include the principal on the loan, or the additional millions in debt that Dunkin' has to pay every year to get out from under the $2.4 billion in debt it's now saddled with after having the privilege of being taken over – with borrowed money – by the firm that Romney built.
If you haven't heard much about how takeover deals like Dunkin' and KB Toys work, that's because Mitt Romney and his private equity brethren don't want you to. The new owners of American industry are the polar opposites of the Milton Hersheys and Andrew Carnegies who built this country, commercial titans who longed to leave visible legacies of their accomplishments, erecting hospitals and schools and libraries, sometimes leaving behind thriving towns that bore their names.
The men of the private equity generation want no such thing. "We try to hide religiously," explained Steven Feinberg, the CEO of a takeover firm called Cerberus Capital Management that recently drove one of its targets into bankruptcy after saddling it with $2.3 billion in debt. "If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person," Feinberg told shareholders in 2007. "We will kill him. The jail sentence will be worth it."
Which brings us to another aspect of Romney's business career that has largely been hidden from voters: His personal fortune would not have been possible without the direct assistance of the U.S. government. The taxpayer-funded subsidies that Romney has received go well beyond the humdrum, backdoor, welfare-sucking that all supposedly self-made free marketeers inevitably indulge in. Not that Romney hasn't done just fine at milking the government when it suits his purposes, the most obvious instance being the incredible $1.5 billion in aid he siphoned out of the U.S. Treasury as head of the 2002 Winter Olympics in Salt Lake – a sum greater than all federal spending for the previous seven U.S. Olympic games combined. Romney, the supposed fiscal conservative, blew through an average of $625,000 in taxpayer money per athlete – an astounding increase of 5,582 percent over the $11,000 average at the 1984 games in Los Angeles. In 1993, right as he was preparing to run for the Senate, Romney also engineered a government deal worth at least $10 million for Bain's consulting firm, when it was teetering on the edge of bankruptcy. (See "The Federal Bailout That Saved Romney")
But the way Romney most directly owes his success to the government is through the structure of the tax code. The entire business of leveraged buyouts wouldn't be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets. This is the same universally beloved tax deduction you can use to write off your mortgage interest payments, so tampering with it is considered political suicide – it's been called the "third rail of tax reform." So the Romney who routinely rails against the national debt as some kind of child-killing "mortgage" is the same man who spent decades exploiting a tax deduction specifically designed for mortgage holders in order to bilk every dollar he could out of U.S. businesses before burning them to the ground.
Because minus that tax break, Romney's debt-based takeovers would have been unsustainably expensive. Before Lynn Turner became chief accountant of the SEC, where he reviewed filings on takeover deals, he crunched the numbers on leveraged buyouts as an accountant at a Big Four auditing firm. "In the majority of these deals," Turner says, "the tax deduction has a big enough impact on the bottom line that the takeover wouldn't work without it."
Thanks to the tax deduction, in other words, the government actually incentivizes the kind of leverage-based takeovers that Romney built his fortune on. Romney the businessman built his career on two things that Romney the candidate decries: massive debt and dumb federal giveaways. "I don't know what Romney would be doing but for debt and its tax-advantaged position in the tax code," says a prominent Wall Street lawyer, "but he wouldn't be fabulously wealthy."
Adding to the hypocrisy, the money that Romney personally pocketed on Bain's takeover deals was usually taxed not as income, but either as capital gains or as "carried interest," both of which are capped at a maximum rate of 15 percent. In addition, reporters have uncovered plenty of evidence that Romney takes full advantage of offshore tax havens: He has an interest in at least 12 Bain funds, worth a total of $30 million, that are based in the Cayman Islands; he has reportedly used a squirrelly tax shelter known as a "blocker corporation" that cheats taxpayers out of some $100 million a year; and his wife, Ann, had a Swiss bank account worth $3 million. As a private equity pirate, Romney pays less than half the tax rate of most American executives – less, even, than teachers, firefighters, cops and nurses. Asked about the fact that he paid a tax rate of only 13.9 percent on income of $21.7 million in 2010, Romney responded testily that the massive windfall he enjoys from exploiting the tax code is "entirely legal and fair."
Essentially, Romney got rich in a business that couldn't exist without a perverse tax break, and he got to keep double his earnings because of another loophole – a pair of bureaucratic accidents that have not only teamed up to threaten us with a Mitt Romney presidency but that make future Romneys far more likely. "Those two tax rules distort the economics of private equity investments, making them much more lucrative than they should be," says Rebecca Wilkins, senior counsel at the Center for Tax Justice. "So we get more of that activity than the market would support on its own."
Listen to Mitt Romney speak, and see if you can notice what's missing. This is a man who grew up in Michigan, went to college in California, walked door to door through the streets of southern France as a missionary and was a governor of Massachusetts, the home of perhaps the most instantly recognizable, heavily accented English this side of Edinburgh. Yet not a trace of any of these places is detectable in Romney's diction. None of the people in any of those places bled in and left a mark on the man.
Romney is a man from nowhere. In his post-regional attitude, he shares something with his campaign opponent, Barack Obama, whose background is a similarly jumbled pastiche of regionally nonspecific non-identity. But in the way he bounced around the world as a half-orphaned child, Obama was more like an involuntary passenger in the demographic revolution reshaping the planet than one of its leaders.
Romney, on the other hand, is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here in America but all over the world. Forget about the Southern strategy, blue versus red, swing states and swing voters – all of those political clichés are quaint relics of a less threatening era that is now part of our past, or soon will be. The next conflict defining us all is much more unnerving.
That conflict will be between people who live somewhere, and people who live nowhere. It will be between people who consider themselves citizens of actual countries, to which they have patriotic allegiance, and people to whom nations are meaningless, who live in a stateless global archipelago of privilege – a collection of private schools, tax havens and gated residential communities with little or no connection to the outside world.
Mitt Romney isn't blue or red. He's an archipelago man. That's a big reason that voters have been slow to warm up to him. From LBJ to Bill Clinton to George W. Bush to Sarah Palin, Americans like their politicians to sound like they're from somewhere, to be human symbols of our love affair with small towns, the girl next door, the little pink houses of Mellencamp myth. Most of those mythical American towns grew up around factories – think chocolate bars from Hershey, baseball bats from Louisville, cereals from Battle Creek. Deep down, what scares voters in both parties the most is the thought that these unique and vital places are vanishing or eroding – overrun by immigrants or the forces of globalism or both, with giant Walmarts descending like spaceships to replace the corner grocer, the family barber and the local hardware store, and 1,000 cable channels replacing the school dance and the gossip at the local diner.
Obama ran on "change" in 2008, but Mitt Romney represents a far more real and seismic shift in the American landscape. Romney is the frontman and apostle of an economic revolution, in which transactions are manufactured instead of products, wealth is generated without accompanying prosperity, and Cayman Islands partnerships are lovingly erected and nurtured while American communities fall apart. The entire purpose of the business model that Romney helped pioneer is to move money into the archipelago from the places outside it, using massive amounts of taxpayer-subsidized debt to enrich a handful of billionaires. It's a vision of society that's crazy, vicious and almost unbelievably selfish, yet it's running for president, and it has a chance of winning. Perhaps that change is coming whether we like it or not. Perhaps Mitt Romney is the best man to manage the transition. But it seems a little early to vote for that kind of wholesale surrender.
This story is from the September 13, 2012 issue of Rolling Stone.
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Professor of Economics at the Mercatus Center at George Mason University Chris Coyne (whose excellent book, Doing Bad by Doing Good: Why Humanitarian Action Fails was reviewed on this blog) and Abigail R. Hall, a second year Mercatus PhD Fellow, have come up with original research that shows the dangers...
Peter Van Buren | Fire Dog Lake 03 Aug 2014 Hits:836 EWO Articles
We met Carolina while visiting a “welcome center” for recently-processed immigrants at Sacred Heart Catholic Church in McAllen, Texas. She emerged from a sweltering relief tent that sheltered a handful of other fatigued travelers, most of whom, like her, had been released by Border Patrol just hours prior. She stood...
Jack Jenkins and Esther Yu-Hsi Lee | Think Progress 03 Aug 2014 Hits:1109 ESJ Articles
In May, Vietnam became the 35th and decisive signatory of the 1997 United Nations Convention on the Law of the Non-Navigational Uses of International Watercourses. As a result, 90 days later, on August 17, the convention will enter into force.
The fact that it took almost 50 years to draft and finally achieve the...
Mikhail Gorbachev | Nation of Change 03 Aug 2014 Hits:845 SGW Articles
On June 3, Jodey Waldrop, a 36-year-old inmate at the St. Clair Correctional Facility in rural Springville, Alabama, was lying in his bed when somebody entered his cell and stabbed him in the neck with a shank. Prison officials say they got Waldrop, who was bleeding profusely, to a hospital...
Ray Downs | Vice 03 Aug 2014 Hits:963 EMC Articles
When a coup removed the democratically-elected leftist president of Honduras in June 2009, receiving tacit support from the U.S. State Department, the American people barely took notice. Then when the United States increased military funding in its little protectorate to reinforce the new right-wing regime installed there, the American public still...
Hector Luis Alamo, Jr | Latino Rebels 03 Aug 2014 Hits:2332 ESJ Articles
A Colorado lawmaker wants to end a long-running practice that fuels mistrust of the federal government.
After retiring from office or losing re-election, many congressional lawmakers — Republicans and Democrats alike — launch lucrative careers as lobbyists at law firms, lobbying shops, business and trade organizations, and other well-heeled interest groups,...
Raju Chebium | Coloradoan 03 Aug 2014 Hits:1245 ECR Articles
But will Greg Page’s call to arms influence business leaders? Or the Republicans his firm donates to?
The US economy could suffer damages running into the hundreds of billions of dollars by the end of the century due to climate change, according to a study released yesterday. The report, titled “Risky...
Robert S. Eshelman | The Nation 29 Jul 2014 Hits:879 SGW Articles
A Boulder district court judge has ruled that Longmont can’t ban hydraulic fracturing within its borders, but also issued a stay in the case.
District Judge D.D. Mallard on Thursday granted a motion for a summary judgment in the case, and enjoined Longmont from enforcing its voter-approved ban on fracking within the borders...
Cathy Proctor | Denver Business Journal 25 Jul 2014 Hits:1041 SGW Articles
The world just experienced its hottest June on record. The heat was driven in large by part by the hottest ocean temperatures since recordkeeping began more than 130 years ago. That makes this the third-warmest start to the year.
The global temperature was 1.3°F above the 20th century average in June...
Brian Kahn | Climate Central 22 Jul 2014 Hits:712 SGW Articles
Nevada Assemblyman Joe Hogan died Friday, about seven weeks after suffering a massive stroke, his son said.
Hogan, D-Las Vegas, died in Virginia “peacefully with his family around him,” said J. Michael Hogan Jr. He was 77.
“My dad was my hero, a great and wise father, smart civil rights lawyer, a...
Laura Myers | Las Vegas Review Journal 18 Oct 2014 Hits:610 Nevada
Most people already know or sense that Pennsylvania has dropped from 8th to 47th in job creation under Corbett. That’s an important issue that Corbett lies about in this campaign mailer.
The real message in this mailer is subliminal. “The effectiveness of subliminal messaging has been demonstrated to prime individual responses...
Randy Shannon | Beaver County Blue 05 Oct 2014 Hits:649 Pennsylvania
There's no question -- the midterm elections this fall are consequential. In Washington, they will determine not only whether Democrats retain control of the Senate, but also whether our nation has a chance to solve real problems for American families or if President Obama will have to veto his way...
Jeff Johnson, Rev. Jesse Jackson | The Huffington Post 24 Sep 2014 Hits:554 Ohio
An emergency appeal filed late Tuesday argues that reinstating the requirement to show a government-issued photo ID to vote in the Nov. 4 election “imposes a radical, last-minute change to procedures for conducting an election that is already underway.”
On Tuesday, the Government Accountability Board announced that voters who had already...
Dee J. Hall | Wisconsin State Journal 21 Sep 2014 Hits:853 Wisconsin
The standard Republican meme, that everything is better done by the private sector, has been debunked in almost every way imaginable (more on that in a bit), but there’s perhaps no more graphic an example of the private sector being much, much worse than the unionized public sector than the...
Justin Rosario | Proud to Be Filthy Liberal Scum 17 Sep 2014 Hits:1045 Illinois
“Family run businesses are a great investment. They are part-and-parcel of a community. Corporate raiders like Bruce Rauner will never understand that,” said Dr. Dupuis, co-owner of Wheatland Animal Hospital. Dupuis employs more than two dozen residents of DuPage and Will counties.
The billionaire GOP candidate who pledged to run Illinois...
Staff | Illinois Freedom 14 Sep 2014 Hits:802 Illinois
Manure is a potent fertilizer that does wonders for the crops that feed the cows that give the milk that makes Wisconsin America's Dairyland.
It's also making a mess of its waters.
While Green Bay holds a mere 1.4% of Lake Michigan's water, it receives one-third of the lake's nutrient load —...
Dan Egan | Journal Sentinel 14 Sep 2014 Hits:634 Wisconsin
As large swathes of the western United States continue to wither under the effects of record-breaking drought, longstanding local concerns over water use are becoming increasingly contentious, adding to the national debate over corporate right and common good.
In recent weeks, a desert area of Southern California has seen focus suddenly...
Carey L. Biron | Mint Press News 12 Sep 2014 Hits:783 California
Natural gas is widely touted as a 'green fuel'. But as Paul Thacker found in Colorado, fracking's national 'ground zero', it's anything but. Lives and health are being ruined by pollution from taxpayer-subsidized gas wells, flaring and refining plants, while property values collapse. Now a mass of environmental refugees are...
Paul Thacker | Ecologist 12 Sep 2014 Hits:790 Colorado
The U.S. Department of Justice is launching a broad civil rights investigation into the Ferguson Missouri police department after officer Darren Wilson shot to death unarmed African-American teenager Michael Brown last month.
The investigation was first reported by the Washington Post — which cited anonymous federal law enforcement officials — and...
Sarah Lazare | Common Dreams 04 Sep 2014 Hits:664 Missouri
After initially stating he would rule on an emergency appeal to stop water shutoffs at the end of Tuesday’s court session, US federal bankruptcy judge Steven Rhodes announced Wednesday he would issue no decision until at least September 17. This means the city, which has shut off water service to...
Lawrence Porter | World Socialist Web Site 04 Sep 2014 Hits:708 Michigan
RICHMOND — A federal jury Thursday found former Virginia governor Robert F. McDonnell and his wife, Maureen, guilty of public corruption — sending a message that they believed the couple sold the office once occupied by Patrick Henry and Thomas Jefferson to a free spending Richmond businessman for golf outings,...
Matt Zapotosky and Rosalind S. Helderman | The Washington Post 04 Sep 2014 Hits:850 Virginia
Sometimes you wake up from a bad dream. You pray it’s not real but when you open your eyes, the reality of the situation is staring you right in the face.
Harold Mitchell faced a similar situation and learned about environmental injustice when family, friends, and neighbors in his Spartanburg, South...
Timothy Fields | Greenversations 02 Sep 2014 Hits:645 South Carolina
The Final Day of the Moral Week of Action Commits Advocates and Activists to Take Anger over Regressive Policies and Turn It into Action at the Polls
Fifty one years after people gathered on the steps of the Lincoln Memorial to declare that a new America was possible, North Carolinians of...
NC NAACP 01 Sep 2014 Hits:706 North Carolina
RALEIGH, NC - Activists from across North Carolina protested with their feet and their voices yesterday at the state capitol as they challenged the flood of regressive policies passed by this state legislature over the past two years and committed themselves to turn their anger and discontent into action at...
Sarah Bufkin | NAACP 29 Aug 2014 Hits:716 North Carolina
Over one hundred Chicago public school students, parents, and community members marched to the city's Board of Education on Monday to demand an end to the school closures, mass lay-offs, and undemocratic political deal-making they say are devastating one of the largest public education districts in the country.
Organized by the...
Sarah Lazare | Common Dreams 28 Aug 2014 Hits:754 Illinois
While they carry signs “Thirsty For Justice” nearly 45% of Detroit’s 173,000 water accounts are considered past due, with 420 customers due to be denied service Tuesday.
The bankrupt Detroit lifted the month-long suspension of shutting off water to people who have not paid bills. Some 25,000 customers have reached payment...
Kaye Wonderhouse | The Global Dispatch 28 Aug 2014 Hits:630 Michigan
Trying to make sense of all the different court rulings in Wisconsin on their partisan Photo ID voting laws? We'll try to unpack that for you.
The short version: Two different state trial courts found the GOP's Photo ID restriction on voting to be a violation of the state constitution's right...
Ernest A. Canning | The Brad Blog 28 Aug 2014 Hits:661 Wisconsin
RALEIGH, NC - Day 5 of the Moral Week of Action mobilized women of all ages, races, creeds, and classes to march together around the NC state Capitol this afternoon to demand an end to the state legislature's regressive attacks on women, their rights, their health, their families and their...
Sarah Bufkin | NAACP 28 Aug 2014 Hits:723 North Carolina
RALEIGH, NC - Health advocates and environmental activists stood side by side to demand that the North Carolina General Assembly stop its attacks on the health of its most vulnerable communities, whether by refusing the Medicaid expansion, cutting back on health care services or giving corporations the green light to...
Sarah Bufkin | NAACP 28 Aug 2014 Hits:620 North Carolina
(Reuters) - The California State Senate passed legislation on Tuesday imposing strict regulations on how law enforcement and other government agencies can use drones, a move supporters said will protect privacy and prevent warrantless surveillance.
The bill attracted bipartisan support in the Senate, passing 25-8 during the evening vote in Sacramento.
Aaron Mendelson | Reuters 28 Aug 2014 Hits:806 California
FERGUSON, Missouri — The last moments of Michael Brown’s life were filled with shock, fear and terror, says a witness who stood just feet away as a police officer shot and killed the unarmed teen.
“I saw the barrel of the gun pointed at my friend,” said Dorian Johnson, 22. “Then...
Trymaine Lee | MSNBC 20 Aug 2014 Hits:1050 Missouri
Alarmed that fewer than one-fourth of voters are showing up for municipal elections, the Los Angeles Ethics Commission voted Thursday to recommend that the City Council look at using cash prizes to lure a greater number of people to the polls.
On a 3-0 vote, the panel said it wanted City...
David Zahniser | Governing 17 Aug 2014 Hits:706 California
Wisconsin taxpayers would have saved $206 million over two years — 73% more than previously estimated — if officials had fully expanded its main health care program for the poor under the federal Affordable Care Act, a new nonpartisan report shows.
If officials decide to change course and expand the program...
Patrick Marley | Journal Sentinel 17 Aug 2014 Hits:898 Wisconsin
AUSTIN — Gov. Rick Perry of Texas was indicted on two felony counts on Friday by a state grand jury examining his handling of a local district attorney’s drunken driving arrest and the state financing for a public corruption unit under the lawyer’s control.
The indictment was returned late Friday in...
Manny Fernandez | The New York Times 15 Aug 2014 Hits:636 Texas
Police violence broke out again in Ferguson, Missouri, Wednesday night, as the streets filled with tear gas, rubber bullets, heavily-armed SWAT teams and mine-resistant vehicles on the fourth night of unrest since Michael Brown, an unarmed African American teenager, was shot to death by police on Aug. 9.
Mostly peaceful protesters...
Ryan Grim, Braden Goyette | The Huffington Post 14 Aug 2014 Hits:674 Missouri
The federal judge who oversaw the political prosecution of former Democratic Alabama Gov. Don Siegelman was arrested over the weekend after allegedly beating his wife in a posh hotel room in Atlanta...
U.S. District Court Judge Mark Fuller was charged with misdemeanor battery and taken to the Fulton County jail around...
Brad Friedman | The Brad Blog 12 Aug 2014 Hits:1083 Alabama
Federal and state governments do not do enough to safeguard drinking water around the nearly 200,000 wells where fracking wastewater is injected deep underground, according to a federal report.
The U.S. Government Accountability Office investigation found that existing regulations do not adequately protect against contamination that could occur after earthquakes, which...
Laura Arenschield | The Columbus Dispatch 11 Aug 2014 Hits:771 Ohio
JACKSON, Miss. (AP) — Mississippi's Republican Party on Wednesday refused to hear challenger Chris McDaniel's effort to overturn his June 24 GOP runoff loss to U.S. Sen. Thad Cochran. The party said McDaniel would do better taking his challenge to court.
In a letter to McDaniel's lawyer, state Republican Party Chairman...
Jeff Amy | Associated Press 10 Aug 2014 Hits:742 Mississippi
The federal corruption trial of former Virginia Gov. Robert McDonnell illustrates the power held by prosecutors to destroy a defendant -- or, conversely, to grant a wrist slap.
As the trial finished its second week, looming large is the difference between the 14 counts McDonnell and his wife Maureen currently face...
Andrew Kreig | Justice Integrity Project 10 Aug 2014 Hits:909 Virginia
Escalating a fight with Mayor Rahm Emanuel, a company that stores enormous mounds of petroleum coke on Chicago's Southeast Side is threatening to sue unless city officials allow the gritty piles to remain uncovered for another four years.
KCBX Terminals, a firm controlled by industrialists Charles and David Koch, is pushing...
Michael Hawthorne | Chicago Tribune 03 Aug 2014 Hits:861 Illinois
A luxury condo building on New York City’s Upper West Side has gotten clearance from the city to have a separate entrance, or a “poor door,” for low-income tenants, according to the New York Post.
Extell, which is building the 33-story complex, will build a specific door for the 55 affordable...
Bryce Covert | Think Progress 03 Aug 2014 Hits:747 New York
As residents of California are urged to conserve water and the state considers placing a mandatory restriction on outdoor water usage, Nestlé is trucking away undisclosed amounts of the precious resource in the form of bottled water.
The Desert Sun has an in-depth report of controversy brewing around the company’s bottling plant,...
Lindsay Abrams | Salon 03 Aug 2014 Hits:1266 California
Pennsylvania officials have refused to disclose information that freight railroads provide about shipments of volatile crude oil through the state.
In the wake of several fiery accidents, the U.S. Department of Transportation in May issued an emergency order requiring railroads to report to state emergency management officials the number of trains...
Jon Schmitz | Pittsburgh Post-Gazette 03 Aug 2014 Hits:739 Pennsylvania
DETROIT, Mich. (WJLA/AP) -- Detroit's massive municipal water department, which has been widely criticized for widespread service shutoffs to thousands of customers, drew nationwide attention Thursday on Capitol Hill.
Due to public pressure, the department has temporarily suspended shutoffs for customers who were 60 days or more behind on bills for...
Scott Thurman | AP | ABC 7 News 01 Aug 2014 Hits:849 Michigan
Departing House Majority Leader Eric Cantor said he will quit Congress altogether in August, ending a once-promising political career in a bid to give his successor a chance for an early turn in office.
Cantor told the Richmond Times-Dispatch he will resign his seat in the House of Representatives effective Aug....
Catalina Camia | USA Today 01 Aug 2014 Hits:876 Virginia
Maude Barlow, Canadian author and national chairperson of the Council of Canadians, with a delegation of water rights advocates brought 260 gallons of water to Detroiters July 24.
Of the 15,000 homes that have had water shut off by Emergency Manager Kevyn Orr, it is estimated that only 48 percent are...
The Michigan Citizen 30 Jul 2014 Hits:781 Michigan
Columbus, Georgia – The Columbus Police Department, continuing its history of antagonizing the movement to close the US military training camp known as the SOA/WHINSEC (School of the Americas, renamed Western Hemisphere Institute for Security Cooperation), has this year placed unjust, unsafe and unconstitutional restrictions on the annual SOA Watch...
Hendrick Voss | SOA Watch 21 Jul 2014 Hits:1076 Idaho
With fewer than a dozen words Monday, President Barack Obama made his most definitive statement to date in favor of District statehood, delighting both loyal supporters and longtime advocates who have questioned his commitment to D.C. voting rights.
During a town hall-style event at a public school in Northwest Washington, Obama...
Mike DeBonis | The Washington Post 21 Jul 2014 Hits:763 DC
The Detroit Water and Sewerage Department is suspending its water shutoffs for 15 days starting today to give residents another chance to prove they are unable to pay their bills.
“In case we have missed someone who has legitimate affordability problems this will allow them to come to us to see...
Brent Snavely, Matt Helms | Detroit Free Press 21 Jul 2014 Hits:675 Michigan
Opponents of tar sands—the massive bituminous oil deposits in Alberta, Canada with a greenhouse gas impact four times greater than that of standard crude—have inched one step closer to a major victory.
On Wednesday night, the City Council of South Portland, Maine voted 6-1 to pass an early version of an ordinance...
Cole Stangler | In These Times 20 Jul 2014 Hits:656 Maine
Oh, make you wanna holler
The way they do my life
This ain't livin', this ain't livin'
No, no baby, this ain't livin'
No, no, no, no
--Marvin Gaye, "Inner City Blues"
On July 18 thousands of activists and dozens of organizations will converge on downtown Detroit to protest the privatization of the city’s assets and...
Ben Ptashnik and Victoria Collier | The Progressive 09 Jul 2014 Hits:788 Michigan
Detroit made international news this month when its municipal water board resumed cutting off water to residents with unpaid bills. With thousands of community members struggling in homes with no running water, local groups reached out (PDF) to the United Nations special rapporteur on the human right to safe drinking...
Anna Lappé | Al Jazeera English 02 Jul 2014 Hits:1249 Michigan
Charter school operators aren’t the only one’s not being held accountable—a major complaint of the Chicago Teachers Union—it’s the machine politicians angling for electoral support and continued political power.
The War on Independents Wages On
Battle lines were once again drawn between Chicago’s machine democrats and independent democrats when Ald. Toni...
RA Monaco | Sheffield Gazette 29 Jun 2014 Hits:829 Illinois
Geraldine Zenteno knew exactly where she wanted to go after graduation.
Researching universities, the 17-year-old T.C. Williams senior had fallen in love with The College of William and Mary. Zenteno wants to pursue a teaching career and the Williamsburg school’s education program ranks among the best in the country, according to...
Derrick Perkins | Alexandria Times 17 Jun 2014 Hits:1291 Virginia
Empowered by their new majority in the State Senate, Republicans have moved to checkmate Gov. Terry McAuliffe in a monthslong contest over Medicaid, passing a budget that does not include the Medicaid expansion the governor sought and forbidding him from unilaterally expanding the health care program for the poor.
Trip Gabriel | The New York Times 15 Jun 2014 Hits:830 Virginia
The Democratic Party is already signaling that they won’t be solidly backing Jack Trammell, the Democratic candidate for Eric Cantor’s old seat after Cantor announced that he won’t run as a write-in candidate.
Roll Call reported this morning that, “National Democrats are considering competing for House Majority Leader Eric Cantor’s House...
Jason Easley | Politicus 13 Jun 2014 Hits:1490 Virginia
In a stunning upset propelled by tea party activists, House Majority Leader Eric Cantor (R-Va.) was defeated in Tuesday’s congressional primary, with insurgent David Brat delivering an unpredicted and devastating loss to the second most powerful Republican in the House who has widely been touted as a future speaker.
Robert Costa | Washington Post 10 Jun 2014 Hits:869 Virginia
Ohio Gov. John Kasich’s (R) environmental record took a turn for the worse last week when he approved rolling back the state’s renewable energy standards. The Buckeye State became the nation’s first to go backwards in this area.
But it’s not the only trouble area for the Ohio governor as it relates to...
Steve Benen | The Maddow Blog 02 Jun 2014 Hits:795 Ohio
Primary season has begun to roll out across the country, including some hotly contested -- and some just plain bizarre -- races for governor, Congress and other local and state offices. One primary of note is in a State Senate race here in New York, and it has already attracted...
Pearl Korn | The Huffington Post 29 May 2014 Hits:1049 New York
PDA is organized around several core issues. These issues include:
Each team hosts a monthly conference call. Calls feature legislators, staffers and other policy experts. On these calls we determine PDA legislation to support as well as actions and future events.