Since the presidential campaign began, tens of millions of dollars have been spent heaping dirt on Bill Bain’s name. Bain Capital—the investment firm envisioned by Bain and led by his protégé, Mitt Romney—is likely the most-attacked private company in the history of American politics.
But since the salvos against Romney and Bain began during the primaries, the firm’s founders—and especially, the highly private Bill Bain—have held their tongues. Indeed, the 75-year-old Tennessean, creator of the consulting juggernaut Bain & Co. and one of the most influential businessmen of his generation, has rarely talked to the press. No man has been more important to Romney’s ascendance, or his private-sector narrative.
Now, speaking exclusively to The Daily Beast, Bain has, for the first time, defended Bain Capital’s record, and sharply dismissed criticism of the firm. “The unfair attacks are not worth responding to,” he said.
Among those attacks: Texas governor Rick Perry has accused Mitt Romney and Bain Capital of “vulture capitalism” and Obama adviser David Axelrod dubbed Romney a “corporate raider.” On Thursday, Workers Voice, a major union super PAC, released an ad branding Romney an “economic traitor." And in August, the Democratic super PAC Priorities USA released an ad in which Joe Soptic, a Missouri steelworker, linked his wife’s death to Bain Capital’s closure of his plant.
In response, Romney claims that Bain Capital created more than 100,000 jobs during his 15 years as CEO. That record is central to the Romney campaign’s “turnaround artist” narrative. In August, Romney wrote in The Wall Street Journal that “Bain Capital … succeeded by growing and fixing companies,” and that he would “put that experience to work to get our economy back on track.”
Critics have questioned that argument, and its jobs math. They point to leveraged Bain buyouts and layoffs, and argue that the purpose of private equity is to deliver shareholder value, not paychecks.
As Bill Bain puts it, “Bain Capital was founded in 1984 to create value. The founding partners took risk in starting this venture, but succeeded in raising their first fund and in investing it well to create value for their investors.”
Bain pioneered the firm’s strategy of information and management-driven investing. Along with founding partners Romney, T. Coleman Andrews III, and Eric Kriss, Bain reimagined private equity around key principles of management consulting: a wonky, business-school approach that proved profitable. Bill Bain had been Romney’s personal and professional mentor, and aggressively recruited the young consultant to lead his novel investment experiment. As one former Romney colleague, Bill Achtmeyer, wrote in Monday’s Boston Globe, “Two men can lay claim to the success of Bain: Bill Bain for starting it, and Mitt Romney for saving it.”
When Bain & Co., the aging parent, was on the verge of death in 1990, Bill Bain once again turned to Romney, now to take over the company he had built. Romney returned as interim CEO, for a salary of $1. After a radical restructuring—and a round of debt-forgiveness from the FDIC—the consultancy survived. Romney returned to Bain Capital, while Bill Bain left the company for good.
Bill Bain and his wife, also named Ann, reside in Naples, Fla.: a sunny, seaside hamlet whose residents have contributed more than $1.25 million to the leading Romney super PAC, Restore Our Future. The pair are wine enthusiasts, regular attendees—and occasional hosts and prizewinners—at the popular Naples Wine Festival. (The city’s median household income is above twice the national average.)
A Phi Beta Kappa history graduate and Woodrow Wilson Scholar at Vanderbilt University, Bill Bain speaks and writes with PowerPoint-style precision. He prefaced his comments to The Daily Beast with a neat, “I would like to say one thing,” and declined a follow-up interview.
According to donation records at the Center for Responsive Politics, Bill Bain himself has given more than $30,000 to the Republican National Committee, $4,175 each to four state Republican committees, and $5,000 to the Romney campaign itself: the maximum for the primary and the general election. Last week, he was in attendance during Paul Ryan’s Florida fundraising trip.
Bain Capital employees have given $3.25 million to Restore Our Future, $270,000 to the Romney campaign itself—and just more than $43,000 to the Obama campaign.
Bain Capital’s success, as its founder’s words suggest, was measured strictly in shareholder value. And by that metric, the firm did astonishingly well. According to The Wall Street Journal, during Romney’s tenure as CEO from 1984 to 1998, the firm produced about $2.4 billion in gains for its investors, on about $1.1 billion invested.
Some of Romney’s gains came from leveraged buyouts, in which companies acquired by Bain collapsed and filed for bankruptcy. “Business is a risk-reward proposition,” says Bain. “For over 28 years, Bain Capital has invested in many great success stories and some failures.”
Other investor gains came from just those success stories: the lasting ventures Staples, Domino’s Pizza, Sports Authority, and others. Economists continue (PDF) to debate whether private-equity generates value for the real economy, or creates jobs.
Bill Bain tells me that, “most importantly,” Bain Capital “has maintained an overall record of creating significant value for our economy.”
To both its opponents and defenders, Bain Capital is more than a company. Democrats have tried to frame Bill Bain’s innovation as the progenitor of “vulture capitalism.” In this narrative, the firm heralds the 1980s “shareholder revolution,” which gave managers and owners more power to extract fees and dividends from companies, while leaving labor with the short end of the stick.
The firm’s political sensitivity was cast in stark relief this July, as Democrats accused Romney of lying about his date of departure from the company. But even then, Romney’s colleagues stayed silent; the company itself issued a two-sentence statement. A culture of discretion, partly forged by Bain himself, has kept the firm’s money managers out of the campaign’s weeds.
The few former Romney colleagues who have gone public defending Bain Capital’s business model have not always received a warm welcome from the campaign. Ed Conard, a former Bain Capital managing director and major Romney donor, made headlines with a June book that seemed to defend inequality as a natural consequence of competitive capitalism. The Romney campaign refused to comment. George Gilder, the conservative economist and George Romney ghostwriter, last month lauded Bill Bain and Mitt Romney as epochal supply-siders in The American Spectator. Again, no comment from the campaign.
Breaking his silence 11 days before the election, Bill Bain did not mention his old protégé by name. But, other than Romney himself, no higher authority on Bain Capital has yet defended its business model in such clear, “value”-focused terms—nor so briskly dismissed the attacks.