Obama taps Wall Street while hitting Romney on Bain

The president seeks to turn the GOP challenger's business background against him. But guess who also has ties to Bain Capital.

By MSNMoney partner May 16, 2012 2:21PM

By Hans Nichols and Julianna Goldman


President Barack Obama's campaign took aim at Republican Mitt Romney's private equity experience on a day when the president was raising money at the New York apartment of Blackstone Group president Tony James.


A television advertisement scheduled to run in five swing states features interviews with former workers at a Kansas City, Mo., steel mill that was taken over in 1993 by Boston-based Bain Capital LLC, the private-equity firm co-founded by Romney.


"Bain Capital was the majority owner. They were responsible," said David Foster, who is identified in the ad as the lead negotiator for workers at GST Steel, which filed for bankruptcy in 2001.


With the economy the dominant issue in the election, Obama's campaign is seeking to turn Romney's business background against him as Republicans assail the president for the sluggish recovery from the recession. The ad is being released amid renewed scrutiny of the financial industry after JPMorgan Chase's disclosure of a $2 billion trading loss.


Romney's campaign spokeswoman said the former Massachusetts governor welcomes a debate about the economy.


"Mitt Romney helped create more jobs in his private sector experience and more jobs as governor of Massachusetts than President Obama has for the entire nation," Andrea Saul said in an e-mail. "If the Obama administration was less concerned about pleasing their wealthy donors and more concerned about creating jobs, America would be much better off."


Bain Capital, which Romney left in 1999 to serve as chief executive of the 2002 Olympics in Salt Lake City, Utah, released a statement saying GST Steel was slated to close without an outside investor and that Bain had an "ambitious plan" to turn it around even as the U.S. steel industry was under pressure.


"We understand that in a political campaign our exemplary 28-year record will be distorted and complex business situations will be portrayed in a simplistic way," Bain said in the statement.


Obama also has ties to Bain Capital. Jonathan Lavine, a managing director at Bain, has raised between $100,000 and $200,000 for Obama's re-election effort, according to the Center for Responsive Politics.


The Obama advertisement will run in Iowa, Ohio, Pennsylvania, Virginia and Colorado, said campaign spokesman Ben LaBolt, who declined to say how much airtime was reserved for the spot.


Romney has called for repeal of the Dodd-Frank law, which was intended to strengthen financial regulations. He's called it one of the laws backed by Obama that has increased the burden on businesses, costing jobs.


At the fundraiser at James's Park Avenue apartment, Obama said it's critical to ensure that there are "basic rules of the road in place so that the markets function in a transparent, clear way."


In an interview for ABC's program "The View" taped earlier in the day, Obama said JPMorgan's trading loss shows the necessity of keeping Wall Street regulation strong.


"JPMorgan is one of the best managed banks there is," Obama said in the interview scheduled for broadcast tomorrow. He questioned whether a weaker bank might have required government help in the same circumstances. "That's why Wall Street reform is so important," he said.


The criticism in Obama's campaign ad mirrors attacks leveled at Romney during the Republican primaries. Former House Speaker Newt Gingrich and Texas Governor Rick Perry, who have since endorsed Romney, previously called the Republican front- runner a corporate raider who stripped businesses, loaded them with debt and fired their workers for profit.


At the time, James said such attacks may slow buyouts.


"Pension funds have boards, they don't want to be giving money to an industry that has a taint," James, 61, said Feb. 7 in an interview on Bloomberg Television's 'InsideTrack' with Erik Schatzker. "Similarly, boards of directors don't want to sell their company to organizations they don't view as respectable. So it could be very damaging for the industry."


Stephen Schwarzman, chairman and co-founder of Blackstone, the world's largest private equity firm, endorsed Romney last year and held a fundraiser for the candidate at his Park Avenue apartment on Dec. 14.


Jim Messina, Obama's campaign manager, told a gathering of Democratic donors from the financial industry in February that the president wouldn't seek to demonize Wall Street.


Before attending the fundraiser at James's apartment, Obama spoke at the Rubin Museum of Art at an event hosted by pop singer Ricky Martin. It was his first fundraiser targeting gay rights activists since he announced last week that he supports same-sex marriage.


"I want everybody treated fairly in this country," Obama told about 200 donor who paid a minimum of $5,000 to attend. "We have never gone wrong when we expanded rights and responsibilities to everybody. That doesn't weaken families, that strengthens families."

More from Bloomberg
May 16, 2012 7:18PM
Bain Capital was simply that-----venture capital. What BO doesn't tell you in his ad is that Bain held that steel mill for 7 years and sank millions into it to make it work. It just didn't go and Romney was no longer with Bain when the plug was pulled on that mill. How quickly BO blames someone elses failures, but can't admit his own? The article tells you----took it over in 1993 and it filed for bankruptcy in 2001----that's 8 years. That's 8 more years those folks wouldn't have got had not Bain took them over.
May 16, 2012 9:09PM

In an interview for ABC's program "The View" taped earlier in the day, Obama said JPMorgan's trading loss shows the necessity of keeping Wall Street regulation strong.

What a Joke He and Gietner are destroying our economy and he has the nerve to criticize JP Morgan who still has 2.2 Trillion.

watching the politicians on c span today was COMICAL as most of them could not run a shoe store.

Notice he was speaking tough with the ladies on the view. Only one of them has a brain in her head.. He did not dare to go on the morning Busines shows were his lack of knowledge would have made him a laughing stock.

May 22, 2012 1:59PM
What a lying hypocrite.  Odumba$$  lost a billion taxpayer dollars in a solar company that went "bankrupt" The peoples house is a revolving door for lobiest after he guaranteed he would not be bought.  Lies lies lies.  Noone can have a battle of wits with him because hes unarmed.  He coundn't run a lemonaid stand and make a profit.  No he doesn't just want to redistribute the wealth in the US, he wants to transfer it to the rest of the world.  I'm sure we'll keep giving Egypt billions to their new muslim regieme.  The terrorists will have the best weapons US taxpayer money can buy.
May 21, 2012 11:38PM
Bain Capital=a steel mill going under. BO=5 trillion in taxpayer money pi--ed away. You tell me who the bad guy is? When someone changes their mind, BO calls it flip flopping. When he changes his, he calls it evolving? With Richard Nixon, we learned that no one is above the law. Constitutional law professor BO has yet to figure that out. BO was unqualified when he won in 2008 and OJT (on the job training) hasn't worked yet. BO gotta go! 
May 23, 2012 4:22AM
What's really hilarious in all this is that BO, of all people, claims that Romney is unqualified for the presidency. As if he ever was, is, or will be? It amazes me that almost 60% of the country say we're going the wrong way; yet, would consider voting for the person heading us that way?????? This election is this. Capitalism vs socialism (a social Democrat). That's the whole show in it's simplest terms.  
May 22, 2012 8:39AM

well  technology and  china/asean  based  plants  played a role  in  steel industry folding up? why blame everything on cost cutting .cost cutting might  have resulted in some jobs being protected at least for a longer period of time. Nobody talks  of chinese or other   countries  providing subsidies provided  to companies that  export to US. The subsidies are huge and hidden .
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