Judging by the title of his book — The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy — it's safe to assume that Kosman's no fan of the industry. But he concedes that the business isn't inherently wicked.

The game works like this: Big-money investors write checks to people like Romney, who pool that money to buy or invest in other companies. Internal company documents show that a year before Romney left Bain in 1999, one of his funds had reached a massive $10 billion.

Though Bain requires a $1 million minimum for a seat at the table, its investors don't just come from the wealthiest 1 percent. They also include college endowments and teachers' pension funds.

Romney (center left) and a colleague hold a bill together in a Bain Capital photo.
Romney (center left) and a colleague hold a bill together in a Bain Capital photo.
Romney
Romney

Jon Burgstone, a professor at the University of California-Berkeley's Center for Entrepreneurship & Technology, sees private equity as essential to the economy. He may be a member of Obama's National Finance Committee, but he's still an admirer of Bain.

"Generally, private-equity companies invest in larger firms that need reorganization or in smaller companies that need growth capital," he says. And their management can usually benefit from "very bright Bain consultants."

That feeling is shared by Steven Kaplan, among the foremost scholars in the field. The University of Chicago finance professor says that, statistically speaking, firms like Bain improve a company's cash flow while providing investors with a better return than the stock market.

There's no question that Romney had a gift for minting money. In 1986, he bought medical-equipment manufacturer Calumet Coach for $1 million, later flipping it for $34 million. He made 16 times his investment in the Gartner Group, a tech-research firm.

In what was perhaps his crowning achievement, he bought money-losing Wesley Jessen Vision Care for $6 million in 1994. Seven years later, it was sold for a dazzling $300 million.

Kaplan argues that critics rarely mention these success stories, preferring to "cherry-pick" deals that paint Romney as unmerciful and gluttonous. "I think it's quite unfair," he says. "He was extremely successful at Bain generating returns for his investors. Bain Capital had a tremendous track record. When you invest in dozens of companies, some of those deals don't work out."

But if critics are quick to disregard Romney's triumphs, defenders are equally swift to rationalize his catastrophes. They'll note that for all Romney's bankruptcies, most were rescued by new companies and survive today, that it's the final dollar tally that matters.

Yet they seem strangely incurious about the ruin he's delivered across the country. Take Kansas City, for example.

The Armco plant closing involved more than the torching of 750 jobs, says Morrow. Contractors and suppliers collapsed. Workers' children and widows lost healthcare and pension benefits. And while Bain received millions in tax breaks — paid for by the very people left holding the bag — Romney walked away millions richer.

So one might forgive everyday Americans for feeling they're on the wrong end of a rigged game, one where the wealthy always win — no matter how inept — and the little guy is left to hack through the debris.

Bain is a private company, meaning it has no obligation to reveal its practices. It's never made public a list of companies it purchased. (Neither Bain nor the Romney campaign would comment for this story.)

So in January, the Wall Street Journal did its best to piece together Romney's track record, reviewing 77 investments made under his direction. It turned out that nearly one in three of the companies experienced severe financial trouble. One in five wound up in bankruptcy.

The more telling figure: Of Romney's 10 biggest moneymakers, he ultimately destroyed four of them, leaving bankruptcy judges to clean up the mess.

As Foster sees it, Romney was an early pioneer of gaming the system. It would take another decade before large banks used many of the same principles to detonate the mortgage industry.

"The great irony is that his entire management experience at Bain Capital is buying companies and loading them up with debt and then looting the balance sheet," Foster says. "It's the very model that drove the American economy off the cliff, then left other people to manage the wreckage."


Renee Fry doesn't recognize the tin man she sees on TV, the candidate so congenitally wooden that he makes Al Gore seem like Flavor Flav. She was Romney's deputy chief of staff when he was governor of Massachusetts. The guy she served was warm and considerate, quick to distill data and seize the big picture.

"I'm lucky because I know him from the day-to-day Mitt," Fry says. "He liked going out and talking to people and learning from people. The Mitt I know had a real appreciation for people."

But if Romney played the friendly politician, kindness wasn't his specialty at Bain. He was generous to ranking executives, rewarding CEOs with huge bonuses. Yet he tended to treat those below his pay grade as little more than machinery.

Romney has claimed to have created 100,000 jobs while at Bain, insisting that providing work for Americans was a company goal.

He makes his case by citing Domino's, Sports Authority, and Staples, companies that added jobs after Bain bought in.

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