Thursday, June 21, 2018
Business

As Mitt Romney hits Florida, Democrats attack Bain's history of profits and layoffs

As Mitt Romney returns to Florida today for two days of campaigning and money-raising, Democrats are trying to ensure Floridians keep two words in mind: Dade Behring.

It's the name of a former medical equipment manufacturer in Miami that Romney's venture capital firm bought and then closed in the late 1990s, walking away with $242 million in profits.

"Obviously you need to make a profit to be successful," Cindy Hewitt, Dade Behring's former human resources officer, said Tuesday at a Miami news conference organized by President Barack Obama's campaign. "My concern is when businesses are used to generate wealth for a small number of people and businesses are run to the ground and the lifeblood is sucked out of it and all of their employees lose their jobs."

The case of Dade Behring in Miami, where some 850 jobs were lost while Romney led Bain has been well-documented. But there's a new wrinkle: The company under Bain's leadership sought and received millions of dollars in tax breaks for creating jobs in Puerto Rico — shortly before closing its facilities, costing nearly 300 jobs.

At the heart of Romney's presidential campaign is an argument that his successful business record makes him best equipped to turn around the economy. Democrats are aiming to turn his strength into a vulnerability — a strategy that has worked before.

Romney started and led Bain Capital from 1984 to 1999, when he left to lead the Salt Lake City Olympics. He became extremely wealthy in the process, and investors profited mightily. But along with the Bain success stories are multiple examples of businesses that went bust and employees who lost jobs.

Ted Kennedy helped defeat Romney in their 1994 Massachusetts U.S. Senate race by blasting him over Bain's jobs record, and Newt Gingrich helped defeat Romney in January's South Carolina primary by doing the same.

Now the Obama team is using the tactic to define Romney early in the general election: airing ads in the battleground states of Ohio, Iowa, Colorado, Pennsylvania and Virginia highlighting a Kansas City steel plant that went under after Bain took hundreds of millions in dividends from the debt-strapped firm. And pro-Obama political committee Priorities USA Action is airing a similar ad in Florida and other swing states featuring laid-off employees describing Romney as a greedy corporate vulture.

"We welcome a discussion about jobs and the economy. President Obama thinks that economic development means rewarding his donors with taxpayer money from the so-called stimulus," said Romney spokesman Ryan Williams. "It's no wonder he's failed to put Americans back to work or follow through on his promise to keep unemployment below 8 percent. President Obama can't come close to matching the many years of experience that Mitt Romney has as a private businessman."

As a presidential candidate, Romney has voiced skepticism about tax breaks to promote job creation.

"When you give people special incentives just to hire new employees, of course you give them an incentive to let current employees go," Romney told CNN in 2009, criticizing the bank bailout. Romney has said he supports states offering companies incentives to create jobs.

Bain's history with the Miami deal started in 1995, when it borrowed heavily to buy a company — later named Dade Behring — that made blood-testing machines and performed animal research.

It also opened facilities in Puerto Rico — taking advantage of tax incentives from the federal government and Puerto Rico in 1997 for job creation — but shuttered them early in 1998. Nearly 300 jobs were lost, though news reports indicate the company encouraged people there to transfer to the Miami facilities.

Hewitt, the former Dade Behring staffer and Obama supporter, said she remembers that well. A dozen employees from Puerto Rico moved to Miami, she said, assured their jobs would be safe. Less than two months later, the Miami plant closed.

"I felt that I had been used and that I had misled people," said Hewitt, who quit in 1998 before she would have lost her own job. "It's the only time in my life I ever did something I felt was horribly unethical."

Romney left Bain in 1999, and Dade Behring, struggling with debt, reorganized under Chapter 11 bankruptcy protection in 2002. The Florida piece of Dade Behring may not have had a happy ending, but Bain says overall it's a success story.

"In 1994, Bain Capital rescued a troubled business unit of Baxter International and over the next four years turned it into a successful, independent company," Bain Capital said in a statement to the Tampa Bay Times on Tuesday. "… Unfortunately, a sudden change in currency exchange rates and an unforeseen delay in customer orders strained the company's financial position. We supported the company through a brief, voluntary bankruptcy process in 2002 and helped position it for continued growth. Today, Dade Behring is the world's largest clinical diagnostics company. We understand that some may question our record for political purposes, but Bain Capital remains focused on building strong, enduring businesses."

Miami Herald staff writer Alexander Leon contributed to this report. Adam C. Smith can be reached at [email protected]

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