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“Binding Family Ties”: Romney Family Investment Ties To Voting Machine Company That Could Decide The Election

It’s 3:00 a.m. on November 7, 2012.

With the painfully close presidential election now down to who wins the battleground state of Ohio, no network dares to call the race and risk repeating the mistakes of 2000 when a few networks jumped the gun on picking a winner.

As the magic boards used by the networks go ‘up close and personal’ on every county in the Buckeye State, word begins to circulate that there might be a snafu with some electronic voting machines in a number of Cincinnati based precincts. There have already been complaints that broken machines were not being quickly replaced in precincts that tend to lean Democratic and now, word is coming in that there may be some software issues.

The network political departments get busy and, in short order, discover that the machines used in Hamilton County, Ohio—the county home of Cincinnati— are supplied by Hart Intercivic, a national provider of voting systems in use in a wide variety of counties scattered throughout the states of Texas, Oklahoma, Hawaii, Colorado and Ohio.

A quick Internet search reveals that there may be reason for concern.

A test conducted in 2007 by the Ohio Secretary of State revealed that five of the electronic voting systems the state was looking to use in the upcoming 2008 presidential election had failed badly, each easily susceptible to chicanery that could alter the results of an election.

As reported in the New York Times, “At polling stations, teams working on the study were able to pick locks to access memory cards and use hand-held devices to plug false vote counts into machines. At boards of election, they were able to introduce malignant software into servers.”

We learn that one of the companies whose machines had failed was none other than Hart Intercivic.

With television time to fill and no ability to declare a winner so that the long night’s broadcast can be brought to a close, the staffs keep digging for relevant information to keep the attention of their viewers—and that is when it gets very real.

It turns out that Hart Intercivic is owned, in large part, by H.I.G. Capital—a large investment fund with billions of dollars under management—that was founded by a fellow named Tony Tamer. While it is unclear just how much H.I.G. owns of Hart Intercivic, we do learn that H.I.G. employees hold at least two of the five Hart Intercivic board seats.

A little more digging turns up a few tidbits of data that soon become ‘the story’.

Tony Tamer, H.I.G.’s founder, turns out to be a major bundler for the Mitt Romney campaign, along with three other directors of H.I.G. who are also big-time money raisers for Romney.

Indeed, as fate would have it, two of those directors—Douglas Berman and Brian Schwartz— were actually in attendance at the now infamous “47 percent” fundraiser in Boca Raton, Florida.

With that news, voters everywhere start to get this queasy feeling in the pits of their stomach.

But wait—if you’re feeling a bit ill now, you’ll want to get the anti-acids ready to go because it’s about to get really strange.

To everyone’s amazement, we learn that two members of the Hart Intercivic board of directors, Neil Tuch and Jeff Bohl, have made direct contributions to the Romney campaign. This, despite the fact that they represent 40 percent of the full board of directors of a company whose independent, disinterested and studiously non-partisan status in any election taking place on their voting machines would seemingly be a ‘no brainer’.

To Mr. Bohl’s credit, after giving a total of $4,000 to “Romney For President”, it must have occurred to him that it might not look so good for a board member of a company whose voting machines are to be a part of the presidential election to be playing favorites—so he gave $250 to Barack Obama to sort of balance the scales.

Mr. Tuch? Not so much.

Interestingly, Mr. Bohl lists himself as an investor at H.I.G. Capital for his Romney contributions but his far smaller donation to Obama was done as “Jeff Bohl, self-employed innkeeper”.

And finally, we learn that H.I.G. is the 11th largest of all the contributors to the Romney effort.

Did I say “finally”? My bad…because there is, indeed, more.

Can you guess who is reported to have a financial relationship with H.I.G. Capital?

Numerous media sources, including Truthout, are reporting that Solamere Capital—the investment firm run by Mitt Romney’s son, Tagg, and the home of money put into the closely held firm by Tagg’s uncle Scott, mother Anne and, of course, the dad who might just be the next President of the United States—depending upon how the vote count turns out, in our little tale, in the State of Ohio—have shared business interests with H.I.G. either directly or via Solamere Advisors which is owned, in part, by Solamere Capital, including a reported investment in H.I.G. by either Solamere Capital or Solamere Advisors.

Lee Fang, in his piece for The Nation exploring the government related activities of various companies in which Solamere has an interest writes-

“Meanwhile, HIG Capital—one of the largest Solamere partners, with nearly $10 billion of equity capital—owns a number of other firms that are closely monitoring the federal government. ”

While the Cincinnati scenario is —at this point—fiction, the rest of this story is all too true, including the part where the voting machines to be used in Hamilton County will be those provided by Hart Intercivic.

And while I am not suggesting conspiracies or that anyone would get involved in any foul play here, most particularly the GOP candidate for President, how is it possible that so many people could exercise so much bad judgment?

The sanctity of voting in America is supposed to be one of our most important virtues. So concerned are we with a ‘clean’ process that James O’Keefe has made a career entrapping, video taping and destroying those sympathetic to Democratic Party candidates and causes who cross the line when it comes to the voting process. And that’s just fine. If Mr. O’Keefe can legitimately expose someone engaging in voter fraud, he most certainly should call them out.

So, why would these individuals who serve on the board of directors of Hart Intercivic go out of their way to make a contribution to any political candidate given the critical importance of their company remaining above reproach when it comes to the political process? And why would those who run the company that owns Hart Intercivic be giving hundreds of thousands of dollars to a political candidate? And why would a political candidate and his family have a financial relationship with a company that owns a chunk of the voting machine company that will be counting the actual votes given to that political candidate or his opponent?

Keith Olbermann was suspended from his job at MSNBC for donating a couple hundred bucks to a local candidate that was a friend of his. Why? Because his employer required that journalists at the network stay free of having given such contributions to any candidate for all the obvious reasons.

Is it really too much to ask that those who control the voting machines that record and count the votes of our elections be held to at least the same standard?

Hopefully, everything will go swimmingly in Cincinnati on Election Day. And, if it doesn’t, it will no doubt be the result of honest error.

Yet, because of this uncomfortable chain of ownership, we now find ourselves with one more headache among the many headaches that accompany the important work of choosing an American president and believing that the process was a fair one—particularly when such an election comes down to a very few votes as may well be the case on Election Day, 2012.

Really, guys. You couldn’t find anything else to invest in? You couldn’t donate all those hundreds of thousands to charity rather than put it into political contributions so that your fellow countrymen would have no reason to ever doubt or question the results of so important an election—or any election for that matter, even if it’s the choice of a county dogcatcher?

I truly wonder sometimes just what these allegedly smart people have inside their heads—or, more importantly, their hearts.

By: Rick Ungar, Op-Ed Contributor, Forbes, October 20, 2012

October 22, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Incestuous Connections”: Will Federal Funds Subsidize Tagg Romney’s Private Equity Bonanza?

Nobody with the bad manners to ask the question would be likely to get the opportunity at the upcoming presidential debate, but someday—especially if Mitt Romney enters the Oval Office —someone will ask about his son Tagg’s privte equity firm.

Like the businesses operated by the first President Bush’s sons three decades ago, Tagg Romney’s Solamere Capital is rife with potentially embarrassing conflicts of interest. Founded in 2008, by eldest son Tagg and his father’s chief fundraiser Spencer Zwick, Solamere is a “fund of funds” representing more than a dozen private equity outfits, including Mitt’s Bain Capital.

What Solamere’s partnerships and investments also show is the stunning reliance of these rugged millionaire individualists on government contracts and programs. Their financial addiction to federal funds is almost amusing, especially given Romney’s infamous remarks about the “47 percent” who supposedly pay no taxes and depend on government largesse to meet all their needs.

Reporter Lee Fang closely scrutinizes those issues and Solamere’s incestuous connections with the Romney presidential campaign in the current issue of The Nation, with the support of the Investigative Fund (where National Memo editor-in-chief Joe Conason serves as editor-at-large).

Consider the man who hosted the $50,000-a-plate fundraiser where Romney made those comments in his huge, luxurious Boca Raton home. Marc Leder’s Sun Capital private equity firm is a partner in Solamere—and also owns part of the Scooter Store, a company that markets motorized wheelchairs, which Medicare beneficiaries buy with federal funds. Unfortunately the growth of the motorized scooter industry has relied heavily on as much as $500 million annually in improper and even fraudulent Medicare billing.

The Affordable Care Act—which Mitt Romney has vowed to repeal—contains a section requiring stringent reform of the motorized wheelchair benefit to prevent fraud. Would President Romney restore that reform to save Medicare funds even if his son’s business would suffer?

Another health sector suffering from rampant fraud is pediatric dentistry, with scandals in several states that involve very expensive, totally unnecessary treatments of poor children that are paid for by Medicaid—and earn huge profits for “dental management companies” owned by private equity firms. If Solamere is earning huge profits from dental mismanagement, would a Romney administration’s Medicaid agency crack down—or turn a blind eye?

Aside from exploiting Medicare and Medicaid, the private equity industry sees major profit opportunities in education—and in particular the for-profit colleges whose dubious practices and educational failures have become controversial in recent years. As Fang recalls, Mitt Romney himself promoted a for-profit institution called Full Sail University during a town hall event in New Hampshire last year, claiming that it could help students “hold down the cost of their eduation.”

Full Sail is actually the third most expensive college in the country—and happens to be owned by TA Associates, a private equity operation associated with the Romney financial empire. Would a Romney administration continue the current efforts to reform the for-profit colleges? Or would it coddle an industry that is becoming notorious for ripping off students and leaving them in debt and unemployed, after sucking down their federal loan funds?

Fang’s reporting may provide an instructive preview of the years to come in a Romney administration, with various Bush-like sons cashing in on White House connections. But the story of Solamere also suggests the hollowness of Romney’s anti-government rhetoric. More and more, the most apt description of private equity is “no, you didn’t build that.”

 

By: Joe Conason, The National Memo, October 16, 2012

October 17, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“An Unlevel Playing Field”: Lifestyles Of The Rich And Politically Connected

Mitt Romney made the case last week that young people looking for opportunities and success should rely on their parents’ wealth. If your folks don’t have much in the way of disposable income, well, good luck.

To drive home the significance of the Republican candidate’s vision, consider the tale of Tagg Romney, the former governor’s oldest son.

The New York Times had a fascinating report this week on Tagg getting together in 2008 with Spencer Zwick, a Romney campaign fundraiser, to create a private equity fund called Solamere Capital.

Neither had experience in private equity. But what the close friends did have was the Romney name and a Rolodex of deep-pocketed potential investors who had backed Mr. Romney’s presidential run — more than enough to start them down that familiar path from politics to profit.

Two years later, despite a challenging fund-raising climate for private equity, Solamere, named after a wealthy enclave in Utah’s Deer Valley where the Romneys have a winter home, finished raising its first fund. The firm blew past its $200 million goal, securing $244 million from 64 investors, including a critical, early $10 million from Mitt Romney and his wife, Ann, and hefty commitments from wealthy supporters of the campaign.

There’s no reason to think Solamere Capital did anything wrong. Rather, the point is, Tagg Romney, despite having no background in private equity, partnered with someone else who had no background in private equity, and they were able to put together a very successful financial operation, thanks in large part to Tagg’s father’s wealth, his last name, and Republican donors who probably assumed Mitt Romney would run for president in 2012.

Adding an interesting wrinkle to the story is the fact that Romney’s Solamere Capital invested in Allen Stanford’s Stanford Financial Group in 2009, hiring several of the firm’s employees. Stanford, of course, is now incarcerated, after getting caught running a $7 billion Ponzi scheme.

Stanford’s former employees, who became Tagg Romney’s employees, have been accused of ignoring widespread fraud, though Tagg says the staff wasn’t with Stanford long enough to learn of the boss’ wrongdoing.

Of course, the larger significance is what the story tells us about the Romney vision of economic opportunity.

To hear Tagg tell it, his political connections were irrelevant. “Our relationships with people got us in the door, but that did not get us investors,” he told the Times.

Paul Waldman offered a more compelling perspective.

Does Tagg Romney actually believe that his dad had nothing to do with his successful entry into the private equity game, and the millions he has made and will continue to make are the result only of his own merit? That his life is radically different from those of the millions of people struggling to get by only because they don’t work as hard as he does, or have his gumption and entrepreneurial spirit? Maybe he does. That may strike you and me as utterly insane, but it wouldn’t surprise me a bit. […]

There are a thousand ways in which wealth determines the opportunities available to you, in large part by making things easy. Yes, if you’re a poor kid being raised by a single parent who never finished high school, you can get to Harvard. But you’re going to have to be one in a million. It’s going to take extraordinary spirit, determination, and luck for you to make it. I’m sure Tagg Romney is a fine fellow, but the truth is that even if he was a lazy dolt he’d still do well. He went to the best schools, his parents gave him all kinds of enriching experiences, and he never had to worry about much of anything. He wasn’t going to get pulled out of college and have to take a job if one of his parents got sick. When he decided this private equity thing looked interesting, there was an escalator waiting, and all he had to do was hop on. That’s opportunity.

Well said.

Look again at what Mitt Romney said last week, while talking to college students, after condemning President Obama for an imaginary “attack” on “success”: “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”

In the Republican’s mind, this actually constitutes a vision of opportunity. If you work hard, get into a good school, but can’t afford the tuition, Romney believes you’ll have the opportunity to find some other college with cheaper tuition. If you’re innovating, come up with an idea for a new business, but can’t afford the start-up costs, Romney believes you’ll have the opportunity to ask your parents for money they may or may not have.

It’s not the job of public institutions to create a level playing field; it’s the job of individuals to find an unlevel playing field and “take a shot.”

It worked out well for Tagg Romney, right?

 

By: Steve Benen, The Maddow Blog, May 2, 2012

May 4, 2012 Posted by | Election 2012 | , , , , , , | Leave a comment

“From Politics To Profit”: The Republican Opportunity Society

Whenever the subject of inequality comes up, conservatives usually say the same thing: Barack Obama wants equality of outcome, while we want equality of opportunity. The first part is ridiculously disingenuous, of course—no one could honestly argue that Obama’s major goals, like raising income taxes from 35 percent to 39.6 percent, would bring us to some kind of pure socialistic society where everyone has precisely the same income and no one is wealthier than anyone else. But the second part is, I think, offered sincerely. Conservatives not only seek a world where everyone has the same opportunities, most of them think that’s pretty much what we have already, so major changes aren’t necessary, except in the area of getting government off your back. After all, this is America, where any kid, no matter where he comes from, can achieve whatever he wants if he’s willing to work hard. Right? Which brings me to the story of Tagg Romney.

Today’s New York Times has a story about the private equity firm Tagg and the chief fundraiser from his dad’s 2008 presidential run started after that campaign ended, called Solamere Capital. They didn’t do anything illegal or unethical, so it isn’t an exposé of wrongdoing or a potential problem for the current Romney campaign, just a somewhat interesting tale about how “that familiar path from politics to profit” works. But here’s the portion that jumps out. Though neither of the two original founders had any experience in private equity, using their contacts among people who had donated to the Romney campaign they quickly found investors who gave them $244 million to play with:

Solamere’s founders dispute any notion that they have cashed in on their political connections, arguing that Solamere, like any fund, has had to persuade investors on its merits.

“No one we went to as an investor said, ‘Oh, your dad is Mitt Romney, I’m going to give you $10 million,” Tagg Romney said, noting that his father’s political future was uncertain when the firm began. He added, “Our relationships with people got us in the door, but that did not get us investors.”

Even so, Mitt Romney was the featured speaker at Solamere’s first investor conference in Deer Valley in January 2010. Mr. Romney, who made his fortune in private equity at Bain Capital, also gave early strategic advice.

Does Tagg Romney actually believe that his dad had nothing to do with his successful entry into the private equity game, and the millions he has made and will continue to make are the result only of his own merit? That his life is radically different from those of the millions of people struggling to get by only because they don’t work as hard as he does, or have his gumption and entrepreneurial spirit? Maybe he does. That may strike you and me as utterly insane, but it wouldn’t surprise me a bit.

I’m not privy to the private conversations among folks like Tagg, but in public anyway, it seems that conservatives have become particularly vehement in defending inequality since the meltdown of 2008, insisting that in America, there is no such thing as privilege, money comes only from merit, wealth is a sign of virtue, and if we raise taxes a smidge on those at the top of the income ladder, we’re only “punishing success.” Repeat that to yourself and others often enough, and you can easily come to believe that we really do have equality of opportunity. But true equality of opportunity is actually nearly as radical an idea as equality of outcome. True equality of opportunity would mean that every public school would be equally good, for instance. But of course they aren’t—people with means move to towns with good schools precisely so they can give their kids more opportunity than other kids get.

There are a thousand ways in which wealth determines the opportunities available to you, in large part by making things easy. Yes, if you’re a poor kid being raised by a single parent who never finished high school, you can get to Harvard. But you’re going to have to be one in a million. It’s going to take extraordinary spirit, determination, and luck for you to make it. I’m sure Tagg Romney is a fine fellow, but the truth is that even if he was a lazy dolt he’d still do well. He went to the best schools, his parents gave him all kinds of enriching experiences, and he never had to worry about much of anything. He wasn’t going to get pulled out of college and have to take a job if one of his parents got sick. When he decided this private equity thing looked interesting, there was an escalator waiting, and all he had to do was hop on. That’s opportunity.

So when conservatives begin arguing that we don’t want equality of outcome, just equality of opportunity, look closely at what it is they’re arguing against. More often than not it’s the most modest of efforts to make things a just a bit easier for people who aren’t at the top. Not a full scholarship to an Ivy League school, just some student loans you’ll have to pay back. Not free nose jobs, just a guarantee of health insurance, so you know you won’t lose your home if you get sick. Not enough money to buy that Cadillac, just a minimum wage high enough that you’ll be able to feed your family. Not anything like real equality of opportunity, in other words. But even that is too much.

 

By: Paul Waldman, The American Prospect, May 1, 2012

May 3, 2012 Posted by | Election 2012 | , , , , , , , | Leave a comment

   

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