Romney and the Olympics

[Brainfade]

In my attempt to stir the pot on ICF (slow summer, you see), I am posting this. Did you all know this about Romney? Does it shed a positive light on his managerial and fiscal skills? Should we care? I'll sit back, grab a beer or 10, and see how the board responds. http://www.politifact.com/truth-o-meter/statements/2012/jan/06/mitt-romney/how-important-was-romney-fixing-troubled-salt-lake/

How important was Romney in fixing troubled Salt Lake Olympic games? In a campaign ad, Mitt Romney says he "helped save" the Olympics Mitt Romney portrays himself as an able manager as he campaigns for the Republican nomination for president. In addition to his tenure as governor of Massachusetts and two stints leading the buyout firm Bain Capital, he also has cited his role as chief executive officer of the Salt Lake City Olympic Committee in the run-up to the 2002 Winter Olympics. On the stump and in commercials, the Olympics are used to promote the image of Romney as a problem-solving turnaround specialist. In a campaign video titled "Leader," Romney says, "I worked at one company, Bain, for 25 years. And I left that to go off and help save the Olympic games." So, did Romney really "help save the Olympic games?" That's a broad claim. Was he successful at not just fixing the Salt Lake Olympics, but also saving the Olympic tradition? Romney left Bain in early 1999 to take over leadership of the games in the aftermath of a bribery scandal that ultimately exposed years of widespread corruption by members of the International Olympic Committee and their counterparts in host cities during the bidding process used to award the games. The initial focus in the late 1990s was on Salt Lake City, where the scandal forced several of the cityÃÔ Olympic officials to quit and the mayor to step down. It threatened to scare away corporate sponsors whose advertising dollars would be vital to helping to fund the games. An internal investigation pointed the finger at two key Olympic organizers who were among the officials who had been forced out, and the SLOC was reorganized. But with two years until the games were set to begin, officials needed someone who help restore credibility to the organization. Romney, a Mormon whose family has deep roots in the state and who attended Brigham Young University, was called in from Boston to clean up the mess. It was a pivotal moment for Romney, who had rejoined Bain after his failed 1994 bid to unseat Sen. Edward Kennedy, D-Mass. The Salt Lake assignment launched him into the national spotlight and helped reboot his political career. It also served as a springboard to his successful 2002 gubernatorial campaign. Next month will mark the 10th anniversary of the Salt Lake games, which turned a profit and were well-reviewed at the time. The Romney campaign points to that success as a prime example of his vaunted managerial acumen. Romney even wrote a book about it -- Turnaround: Crisis, Leadership and the Olympic Games. Many who worked closely with Romney in Salt Lake praise his Olympic work. One of them, Mike Leavitt, the former Utah governor who tabbed Romney to lead SLOC, now campaigns for Romney. Mark Lewis worked for the International Olympic Committee when Romney hired him to help recruit additional corporations to help fund the games. SLOCÃÔ effort to attract sponsors had come to a virtual standstill, Lewis said, with the bribery scandal and subsequent federal investigation casting a shadow over the organization. "Things were in pretty bad shape," Lewis said. "There was a significant budget deficit. There was also a crisis in confidence." Lewis, who now lives in Montana and is president of Jet Set Sports, which provides hospitality services at the Olympics for corporations, said he traveled with Romney to boardrooms and watched him make the pitch as to why the Salt Lake games were still a good bet. "ItÃÔ a pretty tough sell to go out to a company and say you should pay money to be associated with us," Lewis said. He said RomneyÃÔ sales job persuaded them to contribute. "I came into this not knowing Mitt," said Lewis, who is a state finance chairman for Romney in Montana. "I can tell you without hesitation he is one of the most amazing people IÃ×e ever worked with." Mark Tanner was the chief financial officer for the SLOC before Romney was hired. "The games werenÃÕ in shambles, but they needed more money," said Tanner, who left for a corporate position shortly after Romney was brought in and now works for an educational nonprofit in San Diego. Even though the games had attracted a number of sponsors, many had fulfilled pledges through in-kind donations instead of money. "It was very straightforward that we needed more cash," Tanner said. "Mitt was a really quick study." History intervened as well. Just five months before the games came the 9/11 attacks, which changed attitudes in Washington about supporting the games financially. Tanner said winning federal backing had been a tough sell during his tenure. "That was money that was not available before," he said. Under Romney's leadership, the Olympic committee, which had about a $1.3 billion operating budget, ultimately brought in tens of millions in profits, enough to set aside $40 million to create a fund that owns and maintains the Olympic facilities that were built for the games. Not everyone is ready to declare Romney a gold medal winner for his Olympic performance. David Wallechinsky is an author and the vice president of the International Society of Olympic Historians. He said the Romney improved the situation in Salt Lake, but that the claim in the Romney ad, that he "helped save the Olympics" is too broad. The bribery scandal was a low point for the Olympic movement, Wallechinsky said, but it wasnÃÕ an existential threat. "It wasnÃÕ going to threaten the Olympic movement, which survived two world wars, major boycotts and terrorist attacks," Wallechinsky said. Our ruling While it may be stretch to suggest the future of Olympics themselves were at stake during RomneyÃÔ time in Salt Lake, by all accounts, he did help the cityÃÔ moribund Olympic committee reverse its fortunes after an embarrassing scandal and brought the 2002 Winter Olympics to a successful conclusion. We rate Romney's claim Mostly True.

[ravishingravi]

Well one can read this and make a judgement or his record at restructuring companies. Again an example of great management skills if you count out laid off employees. I am indifferent either way.

[Brainfade]

Well one can read this and make a judgement or his record at restructuring companies. Again an example of great management skills if you count out laid off employees. I am indifferent either way.

Am not sure if you're implying that there were layoffs at the SLC Olympics under his watch. I don't know if that is true; I haven't seen any evidence of it (doesn't mean it doesn't exist). An alternative perspective on layoffs (in general) is that the jobs were redundant in the first place, and new management has to do what it has to do to cut personnel in order to make a profit. Here's a factcheck.org article regarding Bain and layoffs/job creation. http://www.factcheck.org/2012/05/lemon-picking-bain-capital-obama-style/

President Obama and a super PAC that supports him are stealing a page from Newt Gingrich and Ted Kennedy in running TV ads and web videos that slam Mitt Romney for his years at Bain Capital. And, like Gingrich and Kennedy before him, Obama is lemon-picking that is, highlighting the venture capital firmÃÔ failed businesses and ignoring its successful ones. Both Obama and the super PAC Priorities USA Action spotlight two businesses Ampad and GS Industries that filed for bankruptcy while under BainÃÔ control, leaving hundreds of workers unemployed. In the case of GS Industries, Bain took over a shrinking company in a difficult market and kept it operating for several years before it filed for bankruptcy (a bankruptcy that was arguably hastened by BainÃÔ hefty borrowing and self-enrichment). Bain purchased Ampad from a struggling parent company that was shedding jobs and assets, and then expanded it before a heavy debt burden forced it into bankruptcy. BainÃÔ portfolio also includes major successes, such as Staples Office and The Sports Authority. But you wonÃÕ see them here. Indeed, Romney responded to the TV ad about the bankruptcy of GS Industries, a Kansas City steel company, with his own ad about BainÃÔ investment in an Indiana steel company that has grown and added thousands of employees. And Bain itself issued a statement defending its overall record, saying that ÅÓevenues grew in 80 percent of the more than 350 companies in which we have invested. But private-equity firms are primarily focused on creating wealth for investors. Sometimes thatÃÔ accomplished by growth, and increased employment. And sometimes itÃÔ accomplished by cutting costs or eliminating poorly performing firms, resulting in job losses. So Romney has opened himself to ObamaÃÔ attacks by claiming credit for creating jobs sometimes without justification, as we have written about before. Private-equity firms in general have Ã…Ãnly a modest net impact on employment, according to a study released in September 2011 by the National Bureau of Economic Research that tracked the performance of 3,200 acquired firms and their 150,000 establishments. Bain has not said how many jobs may have been created at the 350 companies in which it has invested. The Fall of GS Industries The Obama campaign opened its attack on the Bain front with an ad called Å´teel, highlighting BainÃÔ investment in a Kansas City steel company called GS Industries. The ad features testimonials from former employees of GS Industries, a steel company in which Bain invested in 1994 that eventually went bankrupt in 2001 and laid off 750 employees. It begins with former 30-year steelworker Joe Soptic: ŵhey made as much money off it as they could. And they closed it down, they filed for bankruptcy without any concern for the families or the communities. Jack Cobb, a steelworker for 31 years, likens Bain to Å vampire. They came in and sucked the life out of us. The Obama campaign ad was quickly followed by one from pro-Obama super PAC Priorities USA Action, also featuring the demise of GS Industries. The ad features another GS employee, Pat Wells, who says, Å£ain Capital always made money. If we lost, they made money. If we survived, they made money. ItÃÔ as simple as that. He promised us the same things heÃÔ promising the United States. HeÃÃl give you the same thing he gave us. Nothing. HeÃÃl take it all. In its simplest terms, itÃÔ true that Bain made money on the GS Industries deal even though the company went bankrupt. Under BainÃÔ leadership, the company took on massive debt. Much of the debt was taken on to make much-needed updates to aging equipment, but some of it was also used to enrich Bain and its investors. Some analysts say the companyÃÔ large debt was a key contributor to the companyÃÔ fall. Adding to the employees woes, the company announced at the bankruptcy that it could not honor commitments it had made regarding pension and other benefits. So thereÃÔ no getting around that this was not BainÃÔ finest hour. But, as is often the case with the Bain attacks we have seen so far, there is more to this story. LetÃÔ start at the start. With Romney at the helm, Bain Capital invested in the small Kansas City steel mill called GST Steel Co. in 1993. It was a company that traced its roots to 1888 but had fallen on hard times. According to the Kansas City Star, the companyÃÔ ranks had dropped from 4,500 employees in 1970 to just 1,500 employees by 1983. In addition, the company was beset by aging equipment and faced stiff competition in a specialized market, according to a lengthy Reuters report on the company. Nonetheless, Bain saw potential in the company and, Reuters reported, invested $8 million in it. That initial investment was quickly recouped when, in 1994, the company issued $125 million in bonds and paid out $65 million in dividends $36.1 million of which went to Bain, according to Reuters. The following year, Bain merged the company with another in Georgetown, S.C., renaming the company GS Industries, and issued another $125 million in bonds. Bain also reinvested an additional $16.5 million in the company, evidence that Bain intended to keep the firm going. Nevertheless, six years later, the company declared bankruptcy and eliminated 750 jobs. It also reneged on pension and other benefits it had agreed to in 1997. The U.S. Pension Benefit Guaranty Corp. later determined the company had severely underfunded its pension, and the federal agency covered the cost of basic pension payments. So those aspects of the ads are accurate. Was it the debt load that doomed the company? Some analysts cited by Reuters said it certainly didnÃÕ help. Others blamed the union or competition from Asia. In a 1999 filing with the Securities and Exchange Commission, the company stated, Ã…Â¥istressed economic conditions in other countries, particularly Asia, have resulted in record levels of imported steel products into the domestic market causing dramatic declines in selling prices industry-wide. It was a very bad time in general for the steel industry in the U.S. A 2003 report from the U.S. International Trade Commission found that between 1999 and 2003, ?1 steel companies producing products subject to the safeguard measures [including tariffs on foreign imports] have filed for bankruptcy protection. The Romney campaign also argues that the GS Industries bankruptcy and layoffs occurred after Romney had left day-to-day operations at Bain. The bankruptcy occurred in early 2001 and Romney agreed to head up the Salt Lake City Organizing Committee in February 1999. Nonetheless, the debt was incurred under RomneyÃÔ leadership. Ū take personal responsibility for making the investment, Romney told the Boston Globe in 2002. Å£ut I didnÃÕ manage these companies. Our philosophy at Bain Capital was to support management teams in companies where we saw potential for growth, or in companies that were in financial distress that we thought we might be able to save. That may be, but since Romney takes credit for job gains at companies Bain invested in and which he may not have personally managed itÃÔ certainly fair for RomneyÃÔ opponents to tie him to BainÃÔ failures as well. Again, it isnÃÕ that the facts of the attack ads are wrong, itÃÔ that the companies are some of the worst performers in the Bain portfolio, which includes many more success stories. In fact, the Romney campaign countered with just such a story in an ad called Å¢merican Dream that highlighted BainÃÔ minority investment in Steel Dynamics, a company that has grown and added thousands of employees. A Plant Closing in Indiana The Obama campaign and Priorities USA Action, the super PAC that supports the president, each recently released videos about SCM Office Supplies Inc., in Marion, Ind., which closed not long after it was purchased in 1994 by Ampad, a paper products company controlled by Bain Capital. If it seems familiar, thatÃÔ because it is the same plant featured in the Ŭing of Bain mini-documentary we wrote about during the Republican primaries. That ad was put on the air by Winning Our Future, a pro-Newt Gingrich super PAC. In fact, Loris Huffman a former union representative at SCM Office Supplies appears in both Ŭing of Bain and the new Priorities USA Action TV ad, Ã…*oris and Ampad. But, as we wrote before, RomneyÃÔ opponents blame him for business decisions at the Indiana plant in 1994, when Romney was on a leave from Bain Capital to run for U.S. Senate. For example, the five-minute-plus Web video produced by the Obama campaign starts with a woman saying, Ū really feel in my heart people need to know what Mitt Romney did to Marion, Ind., in 1994. A minute into the film, which was released May 21, this text appears on the screen: ?994 Bain Capital-owned Ampad buys SCM. Mitt Romney is Bain CapitalÃÔ CEO. Romney, however, was doing other things in 1994. He officially announced he would run against Sen. Edward Kennedy on Feb. 2, 1994 five months before Ampad bought SCM in July 1994 from Smith Corona. Nevertheless, the Obama campaign video shows headlines and even a company memo from July 1994, recalling how Ampad required the Indiana workers to reapply for their jobs a move that resulted in fewer jobs and, for most of the remaining employees, lower pay and reduced benefits. The labor strike that ensued occurred in September 1994, a month before the Senate election. So, Romney was not working at Bain during those critical early months for the plant and its workers, although that didnÃÕ stop Kennedy from using the labor problems at Indiana plant against Romney in the 1994 campaign. Now, it is true that Romney was back in control of Bain when Ampad closed the plant. That happened in February 1995. Marc B. Wolpow, a former managing director at Bain Capital, told the Los Angeles Times in 2007 that Romney could have prevented the plant from closing. But Wolpow, who reported directly to Romney before and after the Senate campaign, said Romney made the ÅÓight business decision for investors to close the plant. When Ampad went public in June 1996, the company said in its registration statement filed with the SEC that it closed the Indiana plant because it had relatively unfavorable ÅØork rules and associated costs compared with other Ampad facilities. Ampad SEC filing, June 6, 1996: Work rules and associated costs at SCMÃÔ plant in Indiana were less favorable than those at other plants of the Company. As a result of managementÃÔ effort to bring the labor agreement at the Indiana plant more in line with market labor agreements, a labor strike occurred on September 1, 1994. Consequently, the Company closed the Indiana plant on February 15, 1995 and moved the equipment to other facilities operated by the Company. SCM was profitable before Ampad bought it. The Indiana plant had net sales of $22.8 million and a gross profit of $2.4 million between Sept. 1, 1993, and Dec. 31, 1993, AmpadÃÔ registration statement showed. But, as a result of the strike, SCMÃÔ net sales had fallen to $10.4 million and profits had turned to a $500,000 loss during that same period in 1994. Nevertheless, BainÃÔ business decisions at that time helped Ampad to flourish. The Mead Corp. was struggling when it decided to sell Ampad, its commercial office-products business, to Bain in 1992. On July 2, 1992, the Associated Press reported that Mead would eliminate 1,000 jobs over two to three years to save $60 million and that it would sell Ampad to Bain for an undisclosed sum. In its 1996 SEC filing, Ampad reported that sales had grown at an annual rate of 34 percent every year since 1992 under Bain control. In 1995, the companyÃÔ net sales were $617.2 million up from $108 million in 1991. But the companyÃÔ fast-growing sales werenÃÕ enough. By 1999, Å¢mpadÃÔ debt reached nearly $400 million, up from $11 million in 1993, according to government filings, the Boston Globe reported. Ampad defaulted on its debt and filed for bankruptcy in January 2000. At the time, Bain owned 34.9 percent of AmpadÃÔ stock. The Obama and Priorities USA Action videos are correct in saying that Bain earned about $100 million on its initial investment in Ampad. The Wall Street Journal reported that Bain invested $5 million in Ampad and earned $102 million from management and acquisition fees, as well as tens of millions from the initial public offering in 1996, as the Globe reported. Ampad emerged from bankruptcy in 2003 and is now owned by Esselte, a global office products company. Robert Farley and Eugene Kiely

[triam]

CA, The guy was the CEO of Bain one of the top if not the top management consulting companies there is. I dont think there would be any questions regarding his managerial/fiscal skills, atleast I dont have any. The real question is does that translate for being a president, if it does isnt it better to get all the top performing CEO's to be the nominees? Also, his personal ethics with his offshore accounts etc sound very fishy, I am sure it is not illegal, but it is the right thing to do is a different question.

[Brainfade]

triam, if one feels that the biggest issue facing this nation is the national debt and a lack of will (or budgeting skills) to address this, then it is a no-brainer that the country needs a fiscally sound manager who is willing to make tough decisions to get the economy back on track. But, is Romney the guy to do it? I don't know yet. But I do know that President Obama is not the guy. If one feels that the biggest issue facing this nation is not the debt, maybe a lawyer, who is willing to collect more money and spend more than he collects, is the best fit.

[Brainfade]

John Stossel says it well http://www.realclearpolitics.com/articles/2012/07/11/budget_insanity_114758.html

Last year, Congress agreed to $1.2 trillion in automatic spending cuts, unless politicians find other things to cut. They didn't, of course. So now, with so-called sequestration looming in January, panic has set in. Even the new "fiscally responsible" Republicans vote against cutting Energy Department handouts to companies like Solyndra and subsidies to sugar producers. Many claim that any cut in military spending will weaken America and increase unemployment. It's another demonstration of the politicians' addiction to spending -- and how we are complicit. "One more infrastructure bill" or "this jobs plan" will jumpstart the economy, and then we'll kick our spending addiction once and for all. But we don't stop. For most of American history, government was tiny. But since Lyndon Johnson's Great Society and the promise that government would cure poverty, spending has gone up nonstop. This is not sustainable. Progressives say: If you're so worried about the deficit, raise taxes! But it's a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That's only a third of this year's deficit. It's the spending, stupid. Even if you could balance the budget by taxing the rich, it wouldn't be right. Progressives say it's wrong for the rich to be "given" more money. But money earned belongs to those who earn it, not to government. Lower taxes are not a handout. That's the moral side of the matter. There's a practical side, too. Taxes discourage wealth creation. Even if you think -- despite all evidence -- that government spends money more usefully than people in the private sector, there is a limit to how much government can tax before people work less or flee. Progressives claim a small increase in tax rates won't stop the wealthy from producing. But some would stop. When the top marginal rate was 90 percent, actor Ronald Reagan worked just half the year. He said that woke him up to the damage that high taxes impose. Higher taxes give rich people and politicians more reasons to collude. The rich make contributions, and politicians pay the rich back by giving them tax loopholes. That's a big loss to America. That money and creative energy spent on figuring out taxes might have gone to build new products, make music, cure cancer or ... who knows what? Politicians promise to balance the budget by getting rid of what is wasteful, redundant or unnecessary. There's plenty of that, but they have promised to eliminate it for years. They cannot. It's just in the nature of the beast. Centrally planned monopolies do things that are wasteful, redundant and unnecessary. What will bankrupt us first are the wealth transfers to my generation: Medicare and Social Security When FDR started Social Security, most people didn't even live to age 65. Today, we average 78 -- and we baby boomers demand all the cool new stuff that modern medicine invents: anti-cholesterol drugs, hip replacements, etc. And we don't want to pay for most of it because we've been trained by government to assume that we're entitled to these things for free, or nearly free. We paid into Social Security and Medicare for our entire working lives, and damn it, we're entitled to get our money back! Few of us realize that most of us get back up to three times what we paid in, that politicians have promised Social Security and Medicare recipients an impossible $46 trillion more than will exist and that our sense of entitlement will ruin America much faster than foreign aid, subsidies for NPR or foreign wars ever will. Amazingly, we could grow our way out of debt if Congress simply froze spending at today's levels. That would balance the budget by 2017. If spending growth were limited to just 2 percent per year, the budget would balance by 2020! But the politicians won't do even that. It's depressing writing this. But it's not hopeless. There are examples of fiscal sanity we can follow -- if we have the will.

[triam]

CA, I agree Obama has been somewhat of a disappointment. But what is Romney's plan? I havent heard one from him other than populist crap or tea party one liners. Cut deficits in half - how? Reduce taxes - how? Reduce federal spending - how? For all the dumbness cain (999) and perry ( i will cut epa, doe etc) were they atleast had a plan, what is Romney's?

[Clarke]

^^ IIRC Romney had a relatively comprehensive plan (50 something pages i heard) compared to other conzzzvatives in the debates last year. My guess is its going to be on the expected lines i.e. cutting regulations, removing capital gains tax & reduce corporate tax, restructuring MC/MA/SS etc. He isn't touching defense going by his comments.

[Brainfade]

CA, I agree Obama has been somewhat of a disappointment. But what is Romney's plan? I havent heard one from him other than populist crap or tea party one liners. Cut deficits in half - how? Reduce taxes - how? Reduce federal spending - how? For all the dumbness cain (999) and perry ( i will cut epa, doe etc) were they atleast had a plan, what is Romney's?

87-page pdf 5-page summary pdf Here's the thing with Romney - for all the apparent flip-flopping and disconnectedness from the common man's travails, the guy is meticulous and organized. One may disagree with his policies, but he (or his staff) has thought it through. I am not sure why you have not heard anything about it. Maybe he'll push it more aggressively during the official campaign (after the convention).

[Clarke]

(after the convention).

:woot: You going there CA ? Who's the likely VP pick this time ?

[Brainfade]

:woot: You going there CA ? Who's the likely VP pick this time ?

Rubio looks most likely. Maybe Portman or Pawlenty. No sensational picks this time, please.

[triam]

87-page pdf 5-page summary pdf Here's the thing with Romney - for all the apparent flip-flopping and disconnectedness from the common man's travails, the guy is meticulous and organized. One may disagree with his policies, but he (or his staff) has thought it through. I am not sure why you have not heard anything about it. Maybe he'll push it more aggressively during the official campaign (after the convention).

Dont know how I missed hearing abt this at all, possibly bcos more busy than I want to be and not being upto date, I will definitely go through it as I am interested what his plans are genuinely.

[Brainfade]

Dont know how I missed hearing abt this at all' date=' possibly bcos more busy than I want to be and not being upto date, I will definitely go through it as I am interested what his plans are genuinely.[/quote'] Actually, I was being a bit snide about how the media gives no analysis of the details of each candidate's policy plans even when such details are readily available, but focuses more on their personality and such.

[punjabi_khota]

Is Romney in favor of Rand Paul's budget ? I know for sure Rand Paul's budget plan is probably the most disgusting piece of conservative shyte ever to have been debated in Congress (lost something like 80-20 earlier this year).

[Brainfade]

Is Romney in favor of Rand Paul's budget ? I know for sure Rand Paul's budget plan is probably the most disgusting piece of conservative shyte ever to have been debated in Congress (lost something like 80-20 earlier this year).

Rand Paul is a nasty fella. Nope, Romney has nothing to do with him. Romney's plan may have elements of PAUL RYAN's budget. Please don't ever confuse Rand Paul with Paul Ryan. Chalk and cheese. Here's a link to Paul Ryan's plan: http://roadmap.republicans.budget.house.gov/ A comparison of Paul Ryan (the intellectual) and Rand Paul (the extremist) Paul vs. Paul