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Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 6:44:16 PM   
Musicmystery


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Status: offline 		Federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.

How had Romney scored such a favorable deal at the FDIC's expense? It didn't hurt that he had close ties to the agency – the kind of "crony capitalism" he now decries. A month before he closed the 1991 loan agreement, Romney promoted a former FDIC bank examiner to become a senior executive at Bain. He also had pull at the top: FDIC chairman Bill Seidman, who had served as finance chair for Romney's father when he ran for president in 1968.

The federal documents also reveal that, contrary to Romney's claim that he returned full time to Bain Capital in 1992, he remained involved in bailout negotiations to the very end. In a letter dated March 23rd, 1993, Romney reassured creditors that his latest scheme would return Bain & Company to "long-term financial stability." That same month, Romney once again threatened to "pay out maximum bonus distributions" to top executives unless much of Bain's debt was erased.

In the end, the government surrendered. At the time, The Boston Globe cited bankers dismissing the bailout as "relatively routine" – but the federal documents reveal it was anything but. The FDIC agreed to accept nearly $5 million in cash to retire $15 million in Bain's debt – an immediate government bailout of $10 million. All told, the FDIC estimated it would recoup just $14 million of the $30 million that Romney's firm owed the government.

It was a raw deal – but Romney's threat to loot his own firm had left the government with no other choice. If the FDIC had pushed Bain into bankruptcy, the records reveal, the agency would have recouped just $3.56 million from the firm.

The Romney campaign refused to respond to questions for this article.

http://www.rollingstone.com/politics/news/the-federal-bailout-that-saved-mitt-romney-20120829?print=true
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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 8:08:21 PM   
tazzygirl


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Status: offline 		So, are they saying Romney didnt build it?

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 8:15:36 PM   
DarkSteven


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Status: offline 		OMG. If that story is true - that Romney squeezed FDIC and gave fat bonuses to execs while the rank and file faced massive layoffs - Romney's toast.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 8:24:28 PM   
tazzygirl


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Status: offline 		I was being a bit sarcastic... but.. yeah.. if its true, I would agree.

They even have pictures...

http://www.rollingstone.com/politics/pictures/mitt-romneys-federal-bailout-the-documents-20120829

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 8:32:20 PM   
erieangel


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Status: offline 		Somehow I doubt a majority of the republicans will care that Romney is a crook.

They will excuse this on the basis that it makes him a "good businessman".

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 9:57:26 PM   
Restyles


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Status: offline 		Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 10:19:30 PM   
Kana


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quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Yeah-I'm no Romney fan (In fact, I think he's toast...but I also think the Republicans know that and are punting the election. My proof? They're running a guy named Mitt...and his best competition was a Newt) but it looks like here Mitt was trying to solve an untenable situation he hadn't created and was using real hardball tactics.
That he paid the bonuses was less a decision on his part and more on the board and how they crafted the poison pill. But it sounds like they needed to use the pill (or at least put it in their mouth) before the Feds blinked.
The greed here wasn't on Mitt's part (and frankly I think they're reaching a bit with the whole reputation thing. Lots of successful businessman have companies go under-that's life when you roll the dice), it was on the scumbag partners who cashed out, ran with the loot leaving a bankrupt company behind them, then handed it to someone else to fix.

That this is kinda misleading is a shame. Rolling Stone writes some of the best and hardest hitting stuff on the financial scandal to be found in the mainstream press. Matt Tiabbi, their financial writer, has done some great hatchet jobs on, among others, Goldman Sachs and the Libor scandal and nailed Mitt hard for other Bain shenanigans.
(How appropriate is that name? Bane, I mean Bain capital. Cripes, Mitt can't find a break)
Definitely worth reading.

http://www.smirkingchimp.com/author/matt_taibbi
http://www.rollingstone.com/politics/blogs/taibblog

Edited to add that Tiabbi is most famous for his July 2009 Rolling Stone article "The Great American Bubble Machine" which described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

One of the fucking-A all time great quotes

< Message edited by Kana -- 8/29/2012 10:24:29 PM >

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/29/2012 11:08:42 PM   
subrob1967


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Status: offline 		More smoke, no fire... Are we surprised?

The FDIC Lawyers missed the poison pill and are lamenting that Romney outsmarted them, BFD.

I see commercials where former IRS agents will negotiate your tax debt and get you a settlement for pennies on the dollar, how is this any different?

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 12:50:40 AM   
tweakabelle


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quote:

ORIGINAL: subrob1967

More smoke, no fire...


The article states that FDIC documents, obtained under the Freedom Of Information Act, support its case. Rolling Stone has posted some of them here.

So there seems to be a healthy fire burning away producing all the smoke

quote:

I see commercials where former IRS agents will negotiate your tax debt and get you a settlement for pennies on the dollar, how is this any different?


One difference might be that the losers in this story include the US taxpayer, the very people whose vote Mittens is currently seeking.

Another is that one of the prime beneficiaries is a candidate for POTUS. This article asks some very serious questions about Mittens' business record, one of the main planks underwriting Romney's self declared suitability for POTUS.

Some will find it significant that Romney is a beneficiary of Govt intervention in the marketplace, the same intervention he so loudly criticises when others benefit. Whether this constitutes open hypocrisy or something less objectionable is a judgement that the US electorate will, no doubt, make for itself.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 4:23:57 AM   
Musicmystery


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quote:

Some will find it significant that Romney is a beneficiary of Govt intervention in the marketplace, the same intervention he so loudly criticises when others benefit. Whether this constitutes open hypocrisy or something less objectionable is a judgement that the US electorate will, no doubt, make for itself.


In addition, the problem with Romney's style of "business" is that it's really how to carve. Anyone can go into a business and make cuts--and some excel at this. Trouble is, that doesn't grow a business. It's good for a quarter or two, and then you need a real business plan. Liquidators don't even try to muster a business plan, but rather carve out assets and fold the rest for their own capital gain. It's not a "business" in any growth way that would serve the country as experience. Now this article points to documents that show the problem was even worse, that squeezing the government for altogether $16 million was part of the strategy. Absolutely not a plan for economic development, but instead, for wealth of Romney and his team, and constructed with the help of hiring insiders from the FDIC. Nothing there is going to help him build an economy, and I don't think we want to break apart the U.S. and sell it for parts to make him wealthier. That's his experience as a businessman, and that's why his closest thing to a "plan" is to "hire" the Ryan Plan--a recipe for taking apart--and to further extend tax benefits to the wealthy.

Probably not going to sway the Kool-Aid laden lock-steps of the Party Faithful (though it should--this is not a good reflection on the character, the quality of the fox they wish to guard the hen house). But it may open the eyes of a few independents and moderates, giving a peak behind the scenes to what Romney really brings.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 5:03:07 AM   
DesideriScuri


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quote:

ORIGINAL: tweakabelle
quote:

I see commercials where former IRS agents will negotiate your tax debt and get you a settlement for pennies on the dollar, how is this any different?

One difference might be that the losers in this story include the US taxpayer, the very people whose vote Mittens is currently seeking.


So, getting your IRS tax debt lowered isn't, in the end, a bailout at the expense of the US taxpayer?

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 5:20:19 AM   
tazzygirl


Posts: 37833
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Status: offline 		In seeking to effect “voluntary compliance,” the IRS has a substitute return program, in which they themselves file unfiled tax returns based on the income information documents provided to them as required by law. The notices regarding these returns are often ignored until a tax levy, tax lien or garnishment has been issued. Many of these notices carry astronomically high balances due to the IRS.

Meanwhile, some taxpayers look to various professionals for assistance, only to get lost when they are told to get the returns completed and come back. That is the problem—getting the returns completed. The taxpayers no longer have the records and do not know how to obtain or reconstruct the business records.

Professionals specializing in IRS collection resolutions do not always specialize in tax preparation. Further, not all tax preparers have sufficient accounting and/or tax examination knowledge to assist a given taxpayer in reconstructing business or personal records.


IRS Offer in Compromise Program

The Offer in Compromise Program is the only program through which IRS debt might be settled for “pennies on the dollar.” Generally, IRS debt includes penalty and interest. Penalties can sometimes be abated or even eliminated, but not interest and tax liability. These restrictions do not apply to the the Offer in Compromise program.

The “Fresh Start” implicit in the Offer in Compromise Program is meant to help people that otherwise cannot pay their entire debt get back into “voluntary compliance.” Voluntary compliance means completing and paying taxes on time, including making quarterly estimated tax payments on time, if applicable.

Anyone pondering an making an Offer in Compromise is advised to seek the assistance or at least the input of tax or IRS collection resolution professional. Offers can be complicated to complete. Forms need to be completed and documentation of the numbers and assets listed on those forms needs to be provided to the IRS. Attorneys, CPAs, Enrolled Agents and other tax professionals can assist and even negotiate with the IRS on a taxpayer’s behalf, but the taxpayer needs to supply them the information needed in a timely and thorough manner.

The National Association of Enrolled Agents maintains a listing of Enrolled Agents who are members of that organization.



Read more at Suite101: Settle IRS Debts: Is “Pennies on the Dollar” for Real? | Suite101.com http://suite101.com/article/settle-irs-debts-a166521#ixzz251zjlPFo


_____________________________

Telling me to take Midol wont help your butthurt.
RIP, my demon-child 5-16-11
Duchess of Dissent 1
Dont judge me because I sin differently than you.
If you want it sugar coated, dont ask me what i think! It would violate TOS.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 5:26:28 AM   
tazzygirl


Posts: 37833
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Status: offline 		More sources to debunk this "pennies on the dollar" issue.

http://www.carnahanlaw.com/IRS/pennies.html

While it is true some taxpayers can negotiate their tax debt by paying only pennies on the dollar with the offer in compromise program, the IRS has a very strict set of rules and a small percentage of taxpayers will actually qualify for the OIC program.

http://www.hg.org/article.asp?id=24070


It is difficult enough for most to pay bills and take care of their families. Paying a large tax bill seems close to impossible. No wonder there are so many commercials promising protection from liens and levies, all while settling tax debts for pennies on the dollar. For desperate taxpayers, tax settlements are the holy grail of debt solutions. This page will discuss who qualifies for tax settlements and what risks are involved.

http://www.irs-tax-settlement-hq.com/tax-settlement/back-tax-programs/tax-debt-attorney/taxx-irs-tax-settlements.html

With tax day bearing down on thousands of Americans who are having trouble paying back tax debt they already have, the offers made by some tax resolution companies seem almost too good to be true. In one oft-repeated claim, some companies claim they can help taxpayers settle their debts with the IRS for "pennies on the dollar."

But according to the experts, depending on your situation, many of the claims made by tax resolution companies on television are exaggerated and some are outright wrong -- leaving many unwitting taxpayers further in debt than when they started.

http://abcnews.go.com/Blotter/back-taxes-pennies-dollar-irs/story?id=13332245#.UD9bUMFlTvY

_____________________________

Telling me to take Midol wont help your butthurt.
RIP, my demon-child 5-16-11
Duchess of Dissent 1
Dont judge me because I sin differently than you.
If you want it sugar coated, dont ask me what i think! It would violate TOS.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:09:00 AM   
DarkSteven


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quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Call me a Rolling Stone dunce then. When the company gets $10 million from the government, how is that not a bailout?

_____________________________

"You women....

The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

Quit fretting. We men love you."

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:15:41 AM   
subrob1967


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quote:

ORIGINAL: DarkSteven


quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Call me a Rolling Stone dunce then. When the company gets $10 million from the government, how is that not a bailout?


Who's fault is it, Romney's or the FDIC Lawyers who negotiated poorly on behalf of "the people"?

I say it's smart business, and if Romney is that fucking good at negotiations, how is this bad for America?

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:19:54 AM   
Restyles


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quote:

ORIGINAL: subrob1967

More smoke, no fire... Are we surprised?

The FDIC Lawyers missed the poison pill and are lamenting that Romney outsmarted them, BFD.

I see commercials where former IRS agents will negotiate your tax debt and get you a settlement for pennies on the dollar, how is this any different?


More importantly, the Government didnt increase its obligations by one dime, it was already on the hook. That isnt a bailout.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:21:59 AM   
Restyles


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quote:

ORIGINAL: DarkSteven


quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Call me a Rolling Stone dunce then. When the company gets $10 million from the government, how is that not a bailout?


see below...their obligation didnt increase beyond what they would have lost in a bankruptcy, and most likely was decreased compared to a bankruptcy.

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:49:36 AM   
tj444


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quote:

ORIGINAL: Musicmystery

In addition, the problem with Romney's style of "business" is that it's really how to carve. Anyone can go into a business and make cuts--and some excel at this. Trouble is, that doesn't grow a business. It's good for a quarter or two, and then you need a real business plan. Liquidators don't even try to muster a business plan, but rather carve out assets and fold the rest for their own capital gain. It's not a "business" in any growth way that would serve the country as experience.

There was (imo) a massive difference between Bain & Company & Bain Capital.. Bain & Company was just a consultant company.. which specialized in helping business owners turn their own company around.. (which makes the FDIC thing sorta ironic, I guess, they can help other businesses turn around and yet need to turn themselves around)..

Bain Capital was (from what i have read) Romney's idea and the first year or two it was tough since no one wanted to invest with him and take the risk of him being new at it all.. I dont think the majority of the businesses Bain Capital bought were carved up, some areas of duplication if they existed, yes, that would have happened anyway.. Imo, a company that grows (like Staples did) is worth immensely more in the long run than chopping it up and selling off assets. Imo his main objective was to make the most money in the long run as he could so his first objective was to turn the companies he could around.. but not all businesses can be turned around and some will fail, once that happens all that is left is to auction off the remnants..

I think part of what made Romney rich was his luck in timing, he was buying and turning around companies when the economy was expanding due to boomers careers taking off and high consumer spending, imo its harder now cuz the boomer bulge is getting ready to retire (which tends to mean less consumer spending from them)..

That is just my take on him.. (from what i have read so far..)

as far as him helping Bain & Company.. who would not feel an obligation to help the one that gave you your start, that took a huge risk with you and that helped you to make the wealth you have? Imo, anyone in his position would have done the same thing for someone that started you off in your career.. cuz without Bain opening the door.. Romney might have ended up as just another used car salesman.. lol


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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 9:55:37 AM   
mnottertail


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quote:

ORIGINAL: subrob1967


quote:

ORIGINAL: DarkSteven


quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Call me a Rolling Stone dunce then. When the company gets $10 million from the government, how is that not a bailout?


Who's fault is it, Romney's or the FDIC Lawyers who negotiated poorly on behalf of "the people"?

I say it's smart business, and if Romney is that fucking good at negotiations, how is this bad for America?


Cuz you fuck people that aint DDIC lawyers and they start wars over that shit.

That would be a number one reason. 

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RE: Bail Out saved Bain, Rolling Stone Reports - 8/30/2012 10:44:08 AM   
subrob1967


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quote:

ORIGINAL: mnottertail

quote:

ORIGINAL: subrob1967


quote:

ORIGINAL: DarkSteven


quote:

ORIGINAL: Restyles

Only the dunces at Rolling Stone could call negotiations to avoid bankruptcy a bailout.


Call me a Rolling Stone dunce then. When the company gets $10 million from the government, how is that not a bailout?


Who's fault is it, Romney's or the FDIC Lawyers who negotiated poorly on behalf of "the people"?

I say it's smart business, and if Romney is that fucking good at negotiations, how is this bad for America?


Cuz you fuck people that aint DDIC lawyers and they start wars over that shit.

That would be a number one reason. 


NOW you care about starting wars? Take some fucking responsibility for your side for once... The FDIC negotiators at least got something in return, they could have let Bain file for bankruptcy and got NOTHING.

You of all people should understand pennies on the dollar negotiations.

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