Nine ways Mitt is morally bankrupt

If true morality is evidenced by how one treats his fellow man, Romney’s reputation should be under water

Topics: 2012 Presidential Debates, 2012 Elections, Paul Ryan, AlterNet, Republican Party, Barack Obama, Mitt Romney, Democratic Pary,

Nine ways Mitt is morally bankrupt (Credit: AP/Charles Dharapak)
This article originally appeared on AlterNet.

In the psychic make-up of any politician, the phenomenon of compartmentalization is common, but rare is the politician who proudly makes an art of it, as has Republican presidential candidate Mitt Romney. Even as he publicly celebrates his squeaky-clean personal life, Romney lauds his own brutal record as a leveraged buyout specialist and lies with impunity on the stump, often in terms laden with race-baiting code.

AlterNet To Romney, it seems, personal morality amounts to a roster of good personal habits (no smoking or drinking, a faithful marriage, generosity and compassion for ailing members of his faith community) that add up to a kind of personal exceptionalism that trumps whatever havoc his business behavior or political policies may wreak on the life of any poor schlub who should should cross his path.

Romney’s sense of morality seems to be based on a kind of fierce individualism, in which he apparently believes himself to be morally superior by dint of his own personal habits, and assumes no responsibility for the fate of those less rigorous in their personal code, should they find an appeal to their baser instincts in the words and actions of the beyond-reproach church leader, dutiful husband and father of five.

It all amounts to a kind of moral bankruptcy, in which the former Massachusetts governor presumes he is entitled to a morally superior reputation for which he has not kept up the payments. It’s not that hard to be good to your family and friends. If true morality is evidenced by how one treats strangers, Romney’s reputation as a moral actor should be under water.

Here are but nine bits of evidence of the moral bankruptcy of Willard Mitt Romney. There exist many more, but life is short.

1. The smug non-smoker took big bucks to push smoking on Russians. No one is more satisfied with his Ivory-soap self-image (99.43% pure) than Romney, and one aspect of that is Romney’s evident pride in never having been a smoker. But that didn’t stop him, while CEO of Bain & Company, from seeking a consulting deal, beginning in 1992, with the British American Tobacco company to help the death merchants crack the Russian market after the fall of the Soviet Union.



According to a blockbuster report by Huffington Post reporter (and AlterNet alum) Zach Carter and his colleague, Jason Cherkis, Romney appears to have been deeply involved in helping to increase the numbers of Russian smokers on behalf of BAT.

From Carter and Cherkis’ report:

In 1992, reports showed that only 7 percent of Russian women smoked. Since BAT and other Western companies have taken over Russian markets, that number has more than tripled. In 2009, the Global Adult Tobacco Survey, cited by the World Health Organization, reported that nearly 22 percent of Russian women had taken up the habit.

The same survey found that smoking rates among Russian men — already high before Communism’s fall — have also risen since Bain’s tobacco exploits of the early-’90s, with [more than 30] percent now smoking. Nearly 44 million smoke in Russia, a country of 142 million. Dmitriy Yanin, the head of a consumer protection non-governmental organization in Moscow, said there are 400,000 smoking-related deaths each year in Russia. BAT, largely locked out of the cigarette market before Bain got involved, now controls nearly a quarter of sales. BAT remains close with top government officials.

2. Slams government economic investment despite having taken government contracts. As a presidential candidate, Romney is fond of slamming the Obama administration’s stimulus program, and other government investment in the economy. “Government doesn’t create jobs. It’s the private sector that creates jobs,” Romney said at a South Carolina campaign event in January. The auto industry, he said, should have been left to bottom out in the wake of the Bush crash, instead of being brought back to health by the loans provided by the administration. Never mind that Romney himself got a nice windfall from a government contract, according to Carter and Cherkis:

In March 1993, the American government gave Bain & Co. a $3.9 million contract to advise Boris Yeltsin’s administration on the privatization of the Russian economy, according records detailing the arrangement uncovered by The Huffington Post.

3. Opposes abortion, but invested in company that disposes of aborted fetuses. Just because Mitt Romney would make it illegal to have an abortion doesn’t mean he minds making a profit on other people’s abortions. In 1999, while Mitt Romney was still CEO of Bain Capital (a leveraged-buyout firm spun off from Bain & Co.), the company invested tens of millions of dollars in Stericyle, a medical waste firm that, among the vast array of medical waste services it provides to medical facilities, is the disposal of aborted fetuses. The Huffington Post’s Sam Stein broke the story in January, writing:

Stericycle, a massive medical waste disposal service company, received a $75 million investment from Bain Capital in 1999 and soon became an industry leader. Today, it has more than 485,000 customers worldwide. Its clients include hospitals, blood banks, and pharmaceutical manufacturers. But it has also helped dispose of medical waste from Planned Parenthood and abortion clinics — waste that included aborted fetuses — and that has attracted the ire of the pro-life community and establishment Republicans.

4. Decries corruption in other countries but facilitated it in his own. In his address to the Clinton Global Initiative in September, Romney bemoaned the state of affairs in developing countries, saying, “We see stories of cases where American aid has been diverted to corrupt governments.” But when it comes to good ol’ domestic corruption, Romney seems to be all for it — at least when it’s in his own interest. In fact, it could be argued that he even gave out an award for it.

The 2002 winter Olympics in Salt Lake City, which Romney oversaw, were renowned for their outsized expense. Some of that was incurred before Romney took the helm — he was brought in after reports of rampant overspending and corruption — but not all of it. In 2001, Sports Illustrated reported that the millionaires and billionaires of Utah got some sweetheart deals, at government expense, served up with roses on Romney’s watch.

One example among several given is the nice little land swap that billionaire Earl Holding wrangled out of the National Park Service that netted him a prime parcel and a government-built access road. So it made total sense that he would build a high-end resort on that bucolic expanse. Here’s how Mother Jones‘ Tim Murphy described the deal:

Snowbasin, the site of the downhill skiing championships in 2002, was one of the more notorious examples of a well-connected Utahn getting a sweetheart deal in the name of the Olympics. Earl Holding, a billionaire oil baron, pressured the Forest Service into giving him title to valuable land in Park Valley in exchange for land of “approximate equal value” elsewhere in the state. But Holding drove a hard bargain; he got Congress to foot the bill for a new—and arguably unnecessary—access road (cost: $15 million), and received more than 10 times the 100 acres that were necessary for the Games. That would allow him to turn what was once protected federal land into a massive, and lucrative, mountain resort.

The government was so instrumental in making the Olympic games happen that Romney created a special award, the “Order of Excellence,” to honor public servants who had helped them pull it off. Among the recipients: John Hoagland, the US Forest Service official responsible for the land transfer of the Snowbasin downhill skiing site.

5. Insults low-income Americans for not paying federal income tax, while not paying federal income tax on almost all of his income. Romney famously described people whose income level (or status as members of the armed forces) exempts them from paying federal income taxes as takers who “see themselves as victims.” In a secretly recorded video, exposed by Mother Jones, of Romney speaking to other rich people at a campaign fundraiser, he described such people, many of whom are elderly and on Social Security, as those “who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.”

But Romney doesn’t pay ordinary income tax on his annual income, either; he pays federal capital gains taxes — taxes on paid on investment income at a much lower rate than those paid on salaries and wages (otherwise known as money earned from work). That explains why Romney paid only 14 percent on the gazillions he took in in 2011, while a middle-income person may pay almost double that percentage. Asked by 60 Minutes reporter Scott Pelley whether Romney thinks that’s fair, Romney said, why yes. As I recounted Pelley’s interview on September 23:

“Now, you made on your investments last year about $20 million personally, and you paid 14 percent in federal taxes,” Pelley said. “That’s the capital gains rate. Is that fair to the guy who makes $50,000 and paid a higher rate than you did?”

“It is a low rate,” Romney said, “and one of the reasons the capital gains rate is lower is because capital has already been taxed once, at the corporate level — as high as 35 percent.” (Unless your windfall comes from any of the numerous private enterprises that enjoy government subsidies or tax breaks, of course.)

“So you think it is fair,” Pelley said.

“Yeah — I think it’s the right way to encourage economic growth — to get people to invest, to start businesses, to put people to work.”

Actually, there’s scant evidence to suggest that lower capital gains rates have any effect on either job creation or economic growth.

And while he demeaned as moochers regular Americans who pay no income tax because the law exempts them, he sings a different tune when tax law advantages rich guys like him. “I pay all the taxes that are legally required, not a dollar more,” he said, according to Vanity Fair. But if you’re poor and you do the same, in Romney’s moral desert, that makes you a leech on society.

6. Calls for more transparency from his opponent while hiding his own tax returns, squirreling millions offshore and using accounting tricks to lower his tax rate. Romney’s call for the Obama administration to be more forthcoming about everything from the attack on the American consulate in Benghazi, Libya, to the cross-border gun-tracking program known as Fast and Furious would be more credible if Romney wasn’t such a sneak when it comes to matters pertaining to how he makes all that money. For a guy who hasn’t had a job in 10 years, he sure does rake it in — $20 million last year alone.

As repeatedly noted on this site and throughout the news media, Romney has released only two years of his tax returns and has said he will release no more. “We’ve given you people all you need to know and understand about our financial situation…,” Romney’s wife, Ann, told Good Morning America in August.

The Romney reticence on all matters of personal finance has only fanned the flames of investigation and speculation, yielding a picture of a tangled web of offshore shell companies, a Swiss bank account, and shady tax-filing tricks.

Vanity Fair‘s Nicholas Shaxon notes that Romney appears to have closed his $3 million Swiss bank account before filing his 2011 tax return, but reports that he still maintains an interest in 12 Bain Capital funds registered in the Cayman Islands, the details of which, Shaxon says, are “hidden behind controversial confidentiality disclaimers.” Of particular interest to reporters has been a Bermuda firm owned by Romney known as Sakaty High Yield Asset Investors Ltd., which Shaxon writes, is raising eyebrows:

While the Romneys’ spokespeople insist that the couple has paid all the taxes required by law, investments in tax havens such as Bermuda raise many questions, because they are in “jurisdictions where there is virtually no tax and virtually no compliance,” as one Miami-based offshore lawyer put it.

Then there’s the matter of a funky accounting practice known as management fee-waiving, which was all the rage at Bain. Leveraged buyout firms such as Bain collect management fees from the companies they take over (whether or not those companies turn a profit, thanks to the LBO firm’s sage advice). Left to their own devices, those fees would be taxed as ordinary income, at the ordinary-income rates paid on wages and salaries. But if wave the magic waiver wand over them, those fees turn into “investments,” which are taxed as “carried interest” at the lower capital gains rate. Here’s how Nick Confessore, Julie Creswell and David Kocieniewski of the New York Times assess the practice, as used by Bain:

The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income. That means the Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.

(For more on shady Bain practices, read Brian Beutler at TPM and Kris E. Benson at Wonkette.)

Then there’s the matter of Romney’s individual retirement account, which he seems to have converted into an individual tax haven. As the Boston Globe‘s Michael Kralish and Beth Healy told it in an August report:

It is one of the most striking elements of Mitt Romney’s financial fortune. He has used the seemingly bland investment vehicle known as an individual retirement account — established by Congress to help average Americans save a modest amount for retirement — to shield at least $20 million and as much as $100 million from initial taxes.

So much for transparency.

7. Painted his opponent as a fibbing child while building an entire campaign on lies. In the first presidential debate between Romney and Obama, the Republican presidential candidate compared the African-American president to his “boys,” who, when they were little, he said, would pile fib upon fib thinking they could fool their dad. It was an audacious tack for the truth-challenged Romney, whose most furious attacks on Obama have been based almost entirely on lies.

The very theme of the first night of the Republican National Convention was built around a deliberate misrepresentation of the president’s words regarding the role of government in building small businesses — a false narrative that Romney repeated often on the campaign trail, alleging that the president had insulted the work of small business owners, saying of their businesses, “You didn’t build that.” (Actually, Obama said they hadn’t built the roads and bridges that brought customers to their doors.) The convention was themed “We built that,” and featured a deceptively edited video of Obama’s inelegant attempt to echo a message originated by Democratic U.S. Senate Elizabeth Warren, Mass., meant to shine a light on all of the infrastructure built by government that is necessary for economic success: roads, bridges, railroads, schools.

On the very day of the terrorist attack on the U.S. consulate in Benghazi that resulted in the deaths of four Americans, including Ambassador Chris Stevens, Romney falsely accused the president of sympathizing with the attackers. Stevens’ body had not yet been returned home for burial.

Then there was the race-baiting welfare lie, in which Romney falsely accused the black president of removing the work requirements for welfare recipients that were enacted in the Clinton-era welfare reform law. That was one particularly despicable lie, since Romney seized upon an effort by the administration allow states new ways of increasing the numbers of welfare recipients who worked, and twisted it to suggest that the black president was on a mission to give handouts to people on welfare, who, among members of the Republican base, are mistakenly believed to be primarily black.

This is a mere sampling of the mendacity the Mittster has served up along the trail. In the debate alone, ThinkProgress counted 27 myths delivered by Romney over the course of 38 minutes, and AlterNet’s own Alex Kane picked his own list of Romney’s top 10 debate lies. And lest you think this Romney lie narrative to be an alternative-media conspiracy, just look at what CNN found when its fact-checkers examined Romney’s statements.

I’ve only scratched the surface here on the Romney lie front, but I know you don’t have all day.

8. Claims to have the “best interests of the African American community” in his heart while running a race-baiting campaign. When Romney appeared before the annual conference of the NAACP this summer, he assured its members that, if they knew what was good for them, they would vote for him. (For some reason that didn’t go over all that well.) “I believe that if you understood who I truly am in my heart, and if it were possible to fully communicate what I believe is in the real, enduring best interest of African American families, you would vote for me for president,” Romney told the skeptical crowd.

The speech is remembered mostly for the boos Romney received with his promise to “repeal Obamacare” — boos he surely expected to elicit. Given the context, it’s hard not to read Romney’s very appearance before the crowd as a cynical, race-baiting exercise, performed to reinforce the racial resentment of the white, right-wing Republican base. Part of that context was provided just hours after that appearance by the candidate himself when, at a fundraising event, he referred to the less-than-appreciative audience as a group who wanted “free stuff” from the government.

But from the get-go, Romney has run a campaign heavily laced with racial coding, from comments by his surrogate, John Sununu, depicting Obama as “lazy” and “foreign,” to Romney’s own appearance at the side of the birther Donald Trump. Asked to repudiate Trumps claim that Obama was not legitimately the U.S. president, Romney refused, saying that he needed 50.1 percent of the vote. As if that was an excuse. A month later, he made a crack that no one has ever asked him for his birth certificate.

Neither has Romney repudiated the endorsement of washed-up rocker Ted Nugent, whose idea of a good time is to wear a shirt emblazoned with the Confederate flag, and call for the African-American president to “suck on my machine gun.”

And, as noted in item #7, Romney has tried to falsely link the black president with a (non-existent) loosening of welfare-to-work requirements.

There’s more, lots more, where that came from and, lucky for you, AlterNet has documented much of it, here and here.

9. Wears the mantle of protectionist, China-battling job creator after having put thousands of U.S. workers out of jobs and bought into a giant Chinese sweatshopRomney likes to portray his work at the helm of Bain Capital as a mission of job creation. In truth, Bain exists for no other reason than to extract profits for its investors, and sometimes the best way for a leveraged buyout firm to make a profit is to bankrupt the company. You see, the buyout guys get management fees whether the company wins or loses, so even if you load it up with a crushing level of debt, you still come out a winner. Sometimes Romney’s deals created jobs; other times they put people out of work. ThinkProgress estimates that as many as 6,000 Americans lost their jobs under Bain, which was an early proponent of shipping jobs overseas.

Writing at Bloomberg News, private equity specialist Anthony Luzzatto Gardner examined Romney’s record at Bain, concluding that of the 67 major deals the company made during Romney’s tenure, a mere 10 of them accounted for 70 percent of the company’s profits. Of those 10, four ended in bankruptcy, Gardner writes, along with others amid the remaining 57. This kind of “casino capitalism,” as Gardner calls it, is not a recipe for job creation.

Meanwhile in China, Romney and Bain invested in a factory that employed 20,000 young women in deplorable conditions, trapped within the factory complex by barbed wire and guards posted in towers. As AlterNet’s Lynn Parramorereported:

From April 1998 through August 2000, Romney and his Brookside Capital Partners Fund, a Bain affiliate, poured around $23 million into the Global-Tech sweatshop in Dongguan, China. Among the details outlined in the report were the following:

  • Factory workers made 24 cents an hour in 1998 and less than $2 a day. Wages in Global-Tech were less than 2 percent of U.S. wages.
  • As CEO, Romney appears to have been uninterested in calling for improvements at the facility. Today, the sweatshop is still a horror where starvation wages prevail and workers’ rights are nonexistent. Overcrowded, filthy dormitories; rotten food; routine 15- to 16-hour shifts; and backbreaking 105- to 112-hour, seven-day workweeks are the norm.
  • The appliance factory has 800 student “interns” — 16-years-olds forced to work repetitive, exhausting 15- to 16-hour shifts on assembly lines with no overtime pay.

Not exactly the kind of jobs Americans are looking for.

Adele M. Stan is AlterNet's Washington correspondent.

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