Hardline Except For “Lucrative Investments”: Mitt Romney Profiting Off Chinese Surveillance
In a Wall Street Journal oped last month, Mitt Romney laid out “how I’ll respond to a China’s rising power” and criticized the Obama administration’s handling of relations with Beijing. Romney warns of a China as a regional hegemon:
The character of the Chinese government — one that marries aspects of the free market with suppression of political and personal freedom — would become a widespread and disquieting norm.
In the op-ed, the former Massachusetts governor also criticized Obama for failing to press Beijing on human rights and intellectual property violations.
While Romney is quick to criticize Beijing and the White House’s management of U.S.-China relations, an examination of the GOP frontrunner’s investments with Bain Capital — a company he co-founded and once led — suggest he has profited from Chinese surveillance of its own citizenry and from companies that have engaged in intellectual property theft.
The New York Times revealed yesterday that a Bain-run fund in which a Romney family blind trust had holdings purchased Uniview Technologies in December, a Chinese company that claims to be the biggest supplier of surveillance cameras to the Chinese government. Uniview produces “infrared antiriot” cameras and software that allow police to share images in real time and provided technology for an emergency command center in Tibet that “provides a solid foundation for the maintenance of social stability and the protection of people’s peaceful life,” according to Uniview’s Web site.
Human rights advocates say that the rapidly growing number of surveillance cameras in Chinese cities are used to intimidate political and religious activists. “There are video cameras all over our monastery, and their only purpose is to make us feel fear,” Loksag, a Tibetan Buddhist monk in Gansu Province told the Times. He said the cameras helped the authorities identify and detain nearly 200 monks who participated in a protest at his monastery in 2008.
Romney has said he has no role in Bain’s operations but a financial disclosure form filed last August showed that his wife, Ann Romney, held a $100,000 to $250,000 investment in the Bain Capital Asia Fund that purchased Uniview.
In his Wall Street Journal op-ed, Romney wrote, “In the economic arena, we must directly counter abusive Chinese practices in the areas of trade, intellectual property, and currency valuation.”
But Romney’s apparent hypocrisy between his hardline positions on China and his lucrative investment portfolio is on show once again with Bain Capital’s investment in Chinese YouTube competitor Youku. CBS Marketwatch co-founder Bill Bishop writes on his blog, Sinocism, that Romney’s talk of pressing Beijing to better enforce intellectual property rights is in direct contradiction with Bain Capital’s early investment in Youku, a “pirate’s den of copyright infringement” in the site’s early days. A Bain Capital VP now sits on the board of Youku and Youku has reportedly cracked down on copyright violating content. Its newly acquired partner, Tudou, still hosts a variety of pirated and copyright infringing videos.
But if Romney profited from Bain’s ties to Youku and Uniview Technologies, it’s worth examining how the GOP frontrunner’s tough-talk on China can happily coexist with Bain’s investments in companies that have constructed business models around Chinese human rights abuses and intellectual property theft.
By: Eli Clifton, Think Progress, March 16, 2012
Why Mitt Romney’s Tax Returns Undermine The GOP’s Investment Tax Argument
According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.
After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”:
Bain’s haul is further evidence that fair tax rates don’t hold back profit-seeking capitalists, at least until those rates reach a point that no one is proposing. From 1984 until 1999, the top rates on capital gains — the profit from investments as opposed to compensation for work — were often at 28 percent, and never lower than 20 percent. Indeed, in 1987, under President Ronald Reagan, the 20 percent rate rose to 28 percent — a 40 percent increase in potential taxation of Bain investment profit. (Yes, Reagan did raise taxes, even on capital.)
An analysis by the Wall Street Journal of 77 Bain deals in that time period showed that the firm “produced about $2.5 billion in gains for its investors,” on about $1.1 billion invested. Clearly, even with capital-gains rates almost double those today, fund managers such as Romney didn’t lack investors.
As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.
As Nobel Prize winning economist Paul Krugman has noted, the case for a lower capital gains tax is dubious at best. “Nothing in our history or experience says that unearned income has to be taxed this lightly,” he wrote.
By: Pat Garofalo, Think Progress, February 9, 2012
Mitt Romney Supervised Medical Testing Company Guilty Of Massive Medicare Fraud
In 1989, Bain Capital purchased controlling interest in Damon Corp., a medical testing company located in Needham, Massachusetts.
During the time that Bain held its ownership of the company, Mitt Romney personally sat on the Board of Directors. And during that same period, Damon Corp. was busy submitting fraudulent reimbursement claims to Medicare to the tune of millions of dollars charged for unnecessary blood tests.
According to federal government prosecutors, Damon was misleading physicians into ordering unnecessary blood tests, assuring the doctors that the testing would be covered by Medicare.
By the time Damon Corp. pleaded guilty to defrauding the United States Government of $25 million—and paid a total of $119 million in what was, at that time, the largest penalty of its kind in Massachusetts history—Bain was long gone having sold the company in 1993 to Corning, Inc.
Inasmuch as neither Romney nor Bain was ever implicated in the fraud, it would be reasonable to conclude that while the illegal activity was going on under Mr. Romney’s nose, Romney would, himself, bear only some responsibility for perhaps not being as on top of things as one might hope for a company’s director to be.
But, according to Romney, such a conclusion would be wrong.
When Mitt Romney was confronted with the matter during his campaign to become the Governor of Massachusetts, Romney acknowledged that he did have some awareness of the funky things going on at Damon.
According to The Deseret News–
More than a decade later, when Romney was in pursuit of the Massachusetts governorship, his Democratic opponent Shannon O’Brien accused him of lax oversight at Damon and failing to report the fraud.
Romney replied that he had helped uncover the illegal activity at Damon, asking the board’s lawyers to investigate. As a result, he said, the board took “corrective action” before selling the company in 1993 to Corning Inc.
So, then, the future Governor and candidate for his party’s nomination to run for the presidency, did fulfill his obligation as a great American and did report the fraud to the proper authorities, right?
Apparently not.
According to the court records, “…the Damon executives’ scheme continued throughout Bain’s ownership, and prosecutors credited Corning, not Romney, with cleaning up the situation.”
But there is an explanation – it turns out that the Damon experience was a foreshadowing of the Mitt Romney to come as he engaged in one of his now infamous episodes of flip-flopping.
You see, before Romney indicated that he was involved in conducting an investigation while he was on the board of directors, he said that he was completely unaware of any investigation.
Here’s another shocker. While the company eventually went bankrupt, with thousands losing their jobs, Bain Capital walked away with a $12 million profit—a little over $400,000 of that money ending up in Mitt’s pocket.
Expect to hear a lot more about this in the coming days as AFSCME has spent close to one million dollars in advertising buys throughout the state of Florida to highlight this misadventure.
By: Rick Ungar, Contributing Writer, Forbes, (Originally published, January 21, 2012).
“Empathy Gap”: Mitt Romney Rejects Concern For The “Very Poor”
Just two weeks ago, Mitt Romney told voters in South Carolina, “I’m concerned about the poor in this country.” This morning, Romney reversed course and said the exact opposite.
“I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich, they’re doing just fine. I’m concerned about the very heart of America, the 90%, 95% of Americans right now who are struggling and I’ll continue to take that message across the nation. […]
“You can focus on the rich, that’s not my focus. You can focus on the very poor, that’s not my focus. My focus is on middle-income Americans.”
The Republican frontrunner added, “We will hear from the Democrat Party, the plight of the poor.”
When Romney’s rivals were hammering him on Bain Capital — and the fact that he got extremely rich by firing American workers and leading a vulture-capitalist firm — he shifted rhetorical gears in order to seem sympathetic towards those struggling most.
With his new “I’m not concerned about the very poor” line, it appears Romney has abandoned this tack altogether.
Regardless, as a matter of substance, Romney’s line this morning is just a mess.
For one thing, it’s tone-deaf to a breathtaking degree. When a hyper-wealthy politician boasts about taking pleasure in firing people, he probably shouldn’t tell national television audiences he’s “not concerned about the very poor.”
For another, Romney’s candid admission underscores a larger policy problem: he’s not only unconcerned with the plight of the very poor, he also pursuing an agenda that would make their lives considerably more difficult. If elected, a Romney administration intends to slash public investments that benefit working families, while raising taxes on those at the bottom of the income scale.
Let’s also not forget that while Romney insisted this morning that he’s “not concerned about the very rich,” either, there’s ample evidence to the contrary. Indeed, the presidential hopeful has already presented a plan to give the very wealthy yet another massive tax break.
And as for Romney’s purported concern for the middle class, what the former governor neglected to mention this morning is that his tax plan largely ignores the middle class. By his own admission, Romney doesn’t plan to do much of anything for middle-income earners.
Taken together, in one interview, Romney managed to sound callous towards those struggling, lie about his agenda’s focus on the wealthy, and ignore the relevant details of his disregard for the middle class.
Not bad for a morning’s work.
By: Steve Benen, The Maddow Blog, February, 1, 2012
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