Mitt Romney
The roots of Bain Capital in El Salvador’s civil war
Romney tapped El Salvador's wealthy families, including one linked to right-wing death squads
Mitt Romney (Credit: Jessica Rinaldi / Reuters) A significant portion of the seed money that created Mitt Romney’s private equity firm, Bain Capital, was provided by wealthy oligarchs from El Salvador, including members of a family with a relative who allegedly financed rightist groups that used death squads during the country’s bloody civil war in the 1980s
Bain, the source of Romney’s fabulous personal wealth, has been the subject of recent attacks in the Republican primary over allegations that Romney and the firm behaved like, in Rick Perry’s words, “vulture capitalists.”One TV spot denounced Romney for relying on “foreign seed money from Latin America” but did not say where the money came from. In fact, Romney recruited as investors wealthy Central Americans who were seeking a safe haven for their capital during a tumultuous and violent period in the region.
Like so much about Bain, which is known for secrecy and has been dubbed a “black box,” all the names of the investors who put up the money for the initial fund in 1984 are not known. Much of what we do know was first reported by the Boston Globe in 1994 when Romney ran for U.S. Senate against Ted Kennedy.
In 1984, Romney had been tapped by his boss at Bain & Co, a consulting firm, to create a spin-off venture capital fund, Bain Capital.
A Costa Rica-born Bain official named Harry Strachan invited friends and former clients in Central America to a presentation about the fund with Romney in Miami. The group was impressed and “signed up for 20% of the fund,” according to Strachan’s memoir. That was about $6.5 million, according to the Globe. Bain partners themselves were putting up half the money, according to Strachan. Thus the Central American investors had contributed 40 percent of the outside capital.
Back in 1984, wealthy Salvadoran families were looking for safe investments as violence and upheaval engulfed the country. The war, which pitted leftist guerrillas against a right-wing government backed by the Reagan administration, ultimately left over 70,000 people dead in the tiny nation before a peace deal was brokered by the United Nations in 1992. The vast majority of violence, a UN truth commission later found, was committed by rightist death squads and the military, which received U.S. training and $6 billion in military and economic aid. The Reagan administration feared that El Salvador could become a foothold for Communists in Central America.
The notorious death squads were financed by members of the Salvadoran oligarchy and had close links to the country’s military. The death squads kidnapped, tortured, and killed suspected leftists in urban areas fueling an insurgency that retreated to rural areas and waged war on the government from the countryside. The war, which lasted 12 years, triggered an exodus that brought more than 1 million Salvadorans to the United States.
There is no evidence that any of Bain Capital’s original investors were involved in these sorts of activities. But the identities of some of the investors remain secret, and there are family names that raise questions.
Four members of the de Sola family were among the original Bain investors, or “limited partners” in the company, the Globe reported. Their relative and “one-time business partner,” Orlando de Sola, was an important figure in El Salvador. A well-known right-wing coffee grower with an (in his words) “authoritarian” vision for the country, de Sola spent time living in Miami but was also a founding member of the right-wing Arena party, lead by a U.S.-trained former intelligence officer named Roberto D’Aubuisson.
Craig Pyes, an investigative reporter then with the Albuquerque Journal, wrote a series on the rightist death squads based on extensive on-the-ground reporting in El Salvador in the early 1980s with Laurie Becklund of the Los Angeles Times, while the death squads were still active.
Pyes, who has since won two Pulitzer Prizes and is now a private investigator in California, says that no one has produced any proof that de Sola directly funded death squads.
“However,” Pyes says, “he was in the inner circle of the group around D’Aubuisson at the time that D’Aubuisson was well known to be involved in the death squads. De Sola’s name appears in a December 1983 FBI cable as one of 29 people suspected by State Department officials of furnishing funds and weapons to Salvadoran death squads.”
De Sola’s name also turned up in a notebook, seized from an aide to D’Aubuisson named Saravia, that detailed the finances of D’Aubuisson’s terrorist network, according to Pyes.
The Saravia notebook, reviewed by U.S. officials, listed weapons purchases, payments, and what appear to be descriptions of violent plots by rightists, including the assassination of El Salvador’s Archbishop Oscar Arnulfo Romero in 1980. Asked about the notebook by the New York Times in the late 1980s, de Sola denied that he had ever helped finance political violence. De Sola could not be reached for comment for this story.
Romney, for his part, who was much more accessible to the press in 1994, told the Globe that year that “we investigated the individuals’ integrity and looked for any obvious signs of illegal activity and problems in their background, and found none. We did not investigate in-laws and relatives.” He also said that Bain had checked the names of the Bain investors with the U.S. government. Given the policy of the Reagan administration at the time, though, it’s not clear going to the government would have been the most effective vetting mechanism.
It’s impossible to fully explore the backgrounds of the original Bain investors because we don’t know all their identities, including the names of the four members of the de Sola family mentioned by the Globe. Neither the Romney camp, Bain Capital, nor Strachan — the Bain executive who recruited the Central Americans — responded to requests for comment.
During his first presidential bid in 2007, Romney more than once touted the Central American investors in Bain while trying to woo Hispanic voters. In a speech in March of that year to the Miami-Dade Lincoln Day Dinner, Romney actually specified five of the original “partners” in Bain Capital — but the de Sola family was not among those he named.
And that August he told the Miami Herald, “The investments for the company that I started, Bain Capital, came largely from Latin America. My largest single investors came from El Salvador, Ecuador, Colombia and Guatemala. And so I feel a deep kinship to people in Latin America.”
Justin Elliott is a reporter for ProPublica. You can follow him on Twitter @ElliottJustin More Justin Elliott.
Romney giving up on home state of Massachusetts
Romney advisers admit that an attempt to win the candidate's home state is out of the question
FILE - In this April 16, 2012 file photo, Republican presidential candidate, former Massachusetts Gov. Mitt Romney and his wife Ann, are seen outside Fenway Park baseball stadium in Boston. Dont bet on Mitt Romney winning his home state. Or even trying. Thats not been a topic of discussion, Romney campaign adviser Kevin Madden said when asked if the Republican former Massachusetts governor would compete in the heavily Democratic state. (AP Photo/Steven Senne)(Credit: AP) BELMONT, Mass. (AP) — Don’t bet on Mitt Romney winning his home state. Or even trying.
“That’s not been a topic of discussion,” Romney campaign adviser Kevin Madden said when asked if the Republican former Massachusetts governor would compete in the heavily Democratic state.
Romney was never a hero in the liberal bastion, and aides say there are other ways he can win the White House and deny President Barack Obama a second term without the 11 electoral votes Massachusetts offers.
Continue Reading CloseSPIN METER: Rivals airbrush anti-Romney words
After the nastiness of the Republican primary race, former candidates have collective amnesia about Romney disses
FILE - In this Jan. 26, 2012 file photo, Republican presidential candidates, former House Speaker Newt Gingrich and former Massachusetts Gov. Mitt Romney talk during a commercial break at the Republican presidential candidates debate in Jacksonville, Fla. Remember Gingrich calling Romney a liar? Michele Bachmann saying Romney's unelectable? Rick Santorum calling Romney "the worst Republican in the country" to run against Obama? They're hoping you don't. And acting like it never happened _ even though most of their words are just clicks away online. (AP Photo/Matt Rourke, File)(Credit: AP) WASHINGTON (AP) — Remember Newt Gingrich calling Mitt Romney a liar? Michele Bachmann saying Romney’s unelectable? Rick Santorum calling Romney “the worst Republican in the country” to run against President Barack Obama?
They’re hoping you don’t. And acting like it never happened (even though most of their words are just clicks away online.)
One by one — with the exception of holdout Ron Paul — the GOP also-rans have coughed up endorsements of their onetime rival. And as they do, they’re pulling rhetorical backflips to distance themselves from their former harsh assessments of Romney.
Continue Reading CloseRomney’s human shield
The campaigns end this fall, but their flacks will never go away. Meet Eric Fehrnstrom, enforcer on the GOP side
(Credit: AP/LM Otero) The only honest line in “Inside the Circus,” the recent Politico e-book in which millions of nauseating Republican operatives lacerate each other anonymously during primary season, should be mounted on the computers of all “political news readers”: “It is sometimes unclear whether political campaigns are run for the benefit of the voters and office seekers or for the professional consultants who earn their living from politics.” Every other line in the book mostly goes like, and then the RNC flack whispered that the campaign flack didn’t know what he was doing, but that one sentence about the “professional consultants” would be enough to make Jane Austen envious.
Continue Reading CloseJim Newell has covered politics for Wonkette and Gawker and is a contributor to the Guardian. More Jim Newell.
Romney oversimplifies debt ‘inferno’
On the campaign trail, Romney has repeatedly ignored the actual causes of the nation's runaway debt
In this May 15, 2012, photo, Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks during a campaign stop in Des Moines, Iowa. When Republican Romney decried the prairie fire of U.S. debt Tuesday, he ignored some of the sparks that set it ablaze. One was the Great Recession that took hold before Barack Obama became president. That landmark event went unmentioned in Romneys speech. Another was a series of Bush-era tax cuts that Romney wants to follow with even lower rates. (AP Photo/Charlie Neibergall)(Credit: AP) WASHINGTON (AP) — When Republican presidential hopeful Mitt Romney decried the “prairie fire” of U.S. debt Tuesday, he ignored some of the sparks that set it ablaze.
One was the Great Recession that took hold before Barack Obama became president. That landmark event went unmentioned in Romney’s speech. Another was a series of Bush-era tax cuts that Romney wants to follow with even lower rates.
Instead he laid the blame on Obama, a president who has certainly increased the nation’s eye-popping debt — but not, as Romney claimed, by nearly as much as all other presidents combined.
Continue Reading CloseRomney’s Bill Clinton gambit
He's praising the former president to paint Obama as a liberal – and to court his devotees. Why it won't work
(Credit: Reuters/Jim Young) Desperate Mitt Romney is not only taking credit for the auto bailout he opposed, and pretending to be a “job creator” rather than a Bain Capital job destroyer. Now he’s regularly praising former President Bill Clinton as a centrist whose legacy has been betrayed by the “liberal” President Obama. Actual liberals laugh, but can Romney’s gambit work?
Of course not, but Mitt’s not giving up.
In Lansing, Mich., last week, Romney derided Obama as an “old school liberal” compared to Clinton, whom he called a “new Democrat.” Where Clinton “said the era of big government was over, President Obama brought it back with a vengeance,” Romney told a crowd of college students. A campaign official told CNN that Obama “really turned his back” on Clinton’s policies, including welfare reform and middle-class tax cuts.
Continue Reading CloseJoan Walsh is Salon's editor at large. More Joan Walsh.
Page 1 of 79 in Mitt Romney