New Romney Video Touts Steel Mill That Benefited From Government Largesse

By Alex Seitz-Wald/Think Progress

Seeking to combat charges from the Obama campaign that Bain Capital extracted value from companies it purchased by firing employees and cutting benefits, Mitt Romney’s released a web video today profiling Steel Dynamics, one of the companies that Bain invested in.

The ad implies that the plant would not have been built without Romney’s assistance. Steele Dynamics “almost never got started,” the narrator says. “When others shied away, Mitt Romney’s private-sector leadership team stepped in.”

But the Fort Wayne Journal Gazette reported at the time (via Nexis), that Bain was just one of eight financiers for the project — hardly the lone white knight:

Financing to build the plant is coming from the Mellon Bank in Pittsburgh, NBD Bank, Fort Wayne National Bank, Lincoln National Life Insurance Co., the Bank of Japan, the Bank of Germany and the Paris Bank. Capital and Bain Capital are also investors.

And while the video touts Romney’s “private-sector” team, the company was successful thanks, in part, to big government subsidies and grants — $37 million from the state of Indiana and DeKalb County. And as the Los Angeles Times reported in January of this year, the county even raised taxes on residents to help fund the mill:

The county promised $23.4 million in property tax abatements and tax increment finance bonds, as well as a new income tax to generate economic development funds. The latter was required by the state, which shelled out another $13.6 million in tax credits, energy grants, workforce training and funds for roads.

A new quarter-percent tax on DeKalb County residents financed infrastructure improvements such as roads and railroad exchanges that benefited Steel Dynamics.

Indeed, while Romney and conservative allies have attacked President Obama for employing “corporate welfare” and “crony capitalism” to create green jobs, Romney-backed Steel Dynamics enjoyed government largesse on the local level. As the LA Times noted, “The story of Bain and Steel Dynamics illustrates how Romney, during his business career, made avid use of public-private partnerships, something that many conservatives consider to be ‘corporate welfare.’”

Bain invested $18.2 million in Steel Dynamics in 1994. Five years later, it sold its stake for $104 million, walking away with $85 million profit.

New Romney Ad Touting Bain Record Cites Steel Mill That Benefited From Government Largess

By Alex Seitz-Wald/Think Progress




Seeking to counter charges of “vulture capitalism” from his fellow Republican presidential candidates, Mitt Romney’s campaign plans to release an ad today defending his time at Bain Capital, the private equity firm he headed, citing several companies that Romney’s firm purchased and apparently turned around.

But at least one of the companies mentioned in the ad became profitable thanks to government subsidies and a special tax assessed on local residents.

In 1994, Bain invested $18.2 million in Steel Dynamics, becoming the largest domestic equity holder in the company. Five years later, it sold its stake for $104 million, walking away with $85 million profit. In the intervening years, the state of Indiana and DeKalb County pledged $37 million in subsidies and grants for a new Steel Dynamics mill. As the Los Angeles Times reports:

The county promised $23.4 million in property tax abatements and tax increment finance bonds, as well as a new income tax to generate economic development funds. The latter was required by the state, which shelled out another $13.6 million in tax credits, energy grants, workforce training and funds for roads.

A new quarter-percent tax on DeKalb County residents financed infrastructure improvements such as roads and railroad exchanges that benefited Steel Dynamics.

Indeed, while Romney and conservative allies have pilloried GOP candidates Newt Gingrich and Rick Perry for “attacking free enterprise,” even Romney has spoken out against the kind of so-called “corporate welfare” and “crony capitalism” that Steel Dynamics engaged in.

Romney regularly uses this line of attack against President Obama, saying in New Hampshire last week, “Capitalism, free enterprise works. Crony capitalism does not. This president has engaged and is engaging in crony capitalism.” But as the LA Times noted, “The story of Bain and Steel Dynamics illustrates how Romney, during his business career, made avid use of public-private partnerships, something that many conservatives consider to be ‘corporate welfare.’”

It’s also worth noting that the new ad defending Romney and Bain makes no mention of the 100,000 jobs the company supposedly created — a figured the campaign has often toutedwithout being able to provide supporting evidence. A number of fact-checking outlets have cast doubt on the figure, though it’s unclear if the campaign is backing off the claim or chose to leave it out of the new ad for a different reason.