New Site: GOP Ideas

June 28th, 2009

This blog has been dorment for a considerable period of time — over the past few months I have been working on a new site: www.gopideas.com.

As a former Huckabee volunteer (in Iowa and elsewhere), I’m pleased that he is continuing to speak out, but my goal is to reinvigorate the intellectual foundation of the Republican Party.  If you have any comments or suggestions for improvement, email me at: gopideas@gmail.com.

Check it out at: www.gopideas.com

Why Iowans (and everyone else) should vote for Huckabee

January 3rd, 2008

Every candidate has their advantages and disadvantages, but Huckabee is the superior candidate for the following reasons:

ü  He was a governor, which means that he had to do things, not just talk about them. Some people have knocked a few of his policies while governor, but these were all done because tangible objectives needed to be met (like a balanced budget). I’d rather have an executive that had to make tough choices — that made some choices that I would not have made — than someone who did not make any tough choices.

 

ü  His policies are focused in areas that impact most Americans. How many people do you know really make serious money from capital gains, as opposed to regular wages? How many people’s lives are actually impacted by terrorism? Not many, when compared to people who are impacted by obesity, compete with foreign labor or worry about their children being educated to compete in a global economy.

 

ü  The MOST important reason is his professional background as a pastor — because he has a clear, personal  understanding of the problems faced by Americans. This has nothing to do with religion, and everything to do with the fact that he can relate to people on a personal level.  Few of the politicians in the race have that understanding, as they were either in public life for a considerable period of time before this race, or are so wealthy, that they cannot comprehend the difficulties of regular Americans. I wish I could take credit for this observation, but one of my liberal friends cited this logic as to why he was supporting Obama over Clinton: because he worked as a community organizer and is able to relate to people on their level because he has recent, first-hand knowledge of it.

Romney Profits From Government Fraud

January 1st, 2008

The end of this post has the key question for Romney: did he profit from bilking the government or was he asleep at the switch while a firm in which he was on the Board bilked federal and state government for millions. Either way, it would seem Romney violated a law: either not disclosing material information to shareholders or knowingly and willingly being a party to millions in Medicare fraud.

Bain invested in Damon, a medical diagnostics company, in 1989 and the company was then sold to Corning in 1993. The best part, Mitt Romney was on the board of directors from 1990-1993. Keep in mind now, Mitt was just a passive investor in AmPad, had no official role. What was his role at Damon, in his words:

“I helped make it a successful business.” Boston Globe, October 10th, 1994

It IS easy to make something a successful business when the company is bilking the government, or as one news outlet put it: “Damon led the renegade parade” in conducting Medicare fraud, eventually leading to fines in excess of $100 million, criminal convictions and being barred from doing business with Medicare — while Mitt Romney was on the Board.

Funny story, again, as the fraud was uncovered between Romney’s Senate run and gubernatorial run. Guess what … Mitt helped detect the fraud! That’s right, in an October 9, 2002 interview with the Boston Globe, Romney claimed that he helped uncover the fraud at Damon in late 1992 and that the board took “corrective action” and Romney said: “We put in place a program to stop that immediately” (when another company was found to be committing the same fraud as Damon, before Damon was caught).

Let’s put this in context, Mitt Romney is running against Ted Kennedy in 1994 — within the last year, he has personally been responsible for saving taxpayers millions in fraud from his position in the private sector. I would think that would make a great campaign commercial about his honesty (bringing shady business practices to light), ability to manage government money (he saved taxpayer money before he was even in government) or the sloppy oversight done by the federal government on large programs (of which his opponent was a huge supporter of more spending). But Mitt failed to mention any of those things. Guess having the opportunity to look like a hero and fighter of government waste wasn’t of interest to him during a political campaign.

Or, maybe, just maybe, things happened slightly differently. From the Boston Globe article cited above:

“But court records paint a different picture as to who cleaned up the problems at Damon. In the 1996 settlement, records show the scheme was carried out between 1988 and the time that Damon was sold, indicating that no corrective action was taken when Romney was on the board and served as a member of its strategic planning committee.

Or, if you would prefer to believe the words of U.S. Attorney Donald Stern: “Faced with declining profits and a changing health care marketplace, Damon decided to cheat the Medicare program. It did so by submitting literally millions of fraudulent claims for payment to federal and state health care programs for medically unnecessary laboratory tests. What was marketed as LabScan was actually a massive lab scam.”

From the same U. S. Attorney’s Office “When Corning Labs discovered Damon’s practices of bundling tests . . . Corning Labs immediately stopped the conduct.” Again, nothing about Damon, under Mitt’s watchful eye, uncovering fraud. Furthermore, from the Globe article: “a review of the records that are part of the court files confirms that bundling (this was the fraudulent activity) was ongoing as late as mid-July 1993, just as Damon and Corning officials were working out details of the sale.”

So, some daring reporter should ask Mitt about his role. Did he

A.) Uncover fraud and then fail to disclose the fraud to shareholders before the sale (these types of things are why we have Sarbanes-Oxley), which netted him $470,000

B.) Not notice that a company for whom he was tasked with strategic direction (he was on the Board’s Strategic Planning Commitee) was making tons of money by bilking the government — and then lied about his role in detecting the fraud.

Simple: A or B.

AmPad: Exhibit A

January 1st, 2008

Given the strength of unions in the midwest, I find it rather shocking that there has been no mention of Romney’s dealings with Bain Capital. AmPad was a unionized paper product company that Bain purchased from Mead corporation in 1992. Bain made a killing on the deal, in part by killing jobs — firing 200 union workers in Indiana. However, the Bain definition of “shared sacrifice” is that Bain shares in your sacrifice. In the time they owned AmPad, Bain had AmPad borrow money to buy more companies, but used part of the borrowed funds to pay Bain $60 million in fees. These fees were in addition to the $2 million in annual consulting fees Bain charged AmPad. Yet, this was not where the real money was made; that was made when Bain took AmPad public and made $45-50 million. But how could Bain scratch by with only $50 million? They had bills to pay. So they charged AmPad $2 million for setting up the IPO.

So, what is Mr. I-know-how-to-create-jobs, response? In an October 1, 2002 Boston Globe article, his gubernatorial campaigns spokesman said:

“Mitt has been an investor, but it would be unfair to judge Mitt on what he has invested in and not actually run”

So, we’re clear — being an investor does not equal job growth. Wait I thought I read that Mitt was creating jobs at Staples by investing in the company. I’m SURE he’s not one of those people who takes credit when things work out and then points fingers when they don’t.

Of course, this is not the best part. The best part of the AmPad story is trying to understand exactly what Romney’s role was. First, he stated the following regarding AmPad layoffs:

“This is not a fantasy land. This is the real world, and in the real world there is nothing wrong with companies trying to compete.” (Boston Globe, October 9th, 1994)

Then he claimed that he was on leave of absence from Bain (running for Senate in 1994), so AmPad decisions made by Bain were not his call. But after AmPad workers started to protest his 1994 campaign he agreed to meet with them (see Boston Globe, October 10th, 1994). He had nothing to do with the situation, but was still “acting” like he could do something. Interesting.

So, the narrative can be spun as “detached outsider trying to help get to an arrangement between parties.” Well, let’s see what the insiders remember. First, Charles Hanson, Ampad’s CEO, during the time it was owned by Bain, regarding Bain’s (and Romney’s) impact on company strategy:

“Any significant direction we received would certainly have been authorized by him.”

And what direction did Bain propose? A “rollup” strategy in which Bain would buy more companies and combine them with Ampad — which Hanson knew meant significant worker layoffs. Arguing that Romney didn’t/couldn’t know about this strains creduilty. However, as Hanson said of the period when Romney was running for the Senate: “There was a high level of interest in not hurting his political aspirations.” (See Boston Globe, October 29, 2002)

Well, at least people in Romney’s own firm think he’s playing this straight. Oh, yeah …. After Romney lost and returned to Bain, he decided to permanently shut down the plant and in a letter to a union official stated that he wanted to settle the strike:

“privately without fanfare. It included communicating my strong personal desire that the strike be settled and that the plant remain open, offering my ideas for a possible settlement, and relaying the sentiments of the workers I met with in Boston.”

However, Marc Walpow (a former Managing Director at Bain) and a Bain-appointee to the AmPad Board of Directors, remembers Romney’s role in AmPad differently:

“He was in charge. He could have ordered me to settle with the union. He didn’t order me to do that. He let me make decisions that would maximize the value of the investment. That was the right business decision as CEO of Bain Capital. But let’s not pretend it was something else.”

Well, at least someone is honest about what PE guys do.

“We had a scheme where the rich got richer”

January 1st, 2008

That’s what Mitt Romney’s co-worker said about Bain Capital in an LA Times article published in mid-December. And that’s what private equity companies do: take money from rich people, borrow a lot more, buy companies, employ quick fix strategies and then sell them off. Some jobs are created, but this is not the story of an entrepreneur sweating it out with the commonfolk to build a company, this is the story of a bunch of rich, well connected guys making deals with a bunch of other rich and well connected guys. There’s nothing wrong with that. There is something wrong with representing yourself as a a businessman who builds companies and creates jobs when your main goal was making rich people even richer.

The rub is that as detailed here Bain was focused on making money, not building a great company, as many of their companies would file for bankruptcy, layoff workers, force salary cuts, etc. while Bain Capital hired Bain Consulting for millions in fees. Go ahead and ask employees of Babbages, Stage Stores, KB Toys and FTD about Mitt’s ability to build a company. Of course, Bain cashed out by reselling the company or taking it public — which is great for Bain, but not necessarily for workers.

Romney’s Record Gets Pass In Iowa

January 1st, 2008

Sitting in Iowa, I’ve personally watched the media lap up and dutifully republish what the candidates say, but I’m a believer that if you’re actually getting paid to write about politics, your value add should be greater than a functioning as a tape recorder. I know that the last post was about Romney’s record — and this blog is about Huckabee – but I am stunned at the lack of scrutiny Romney is receiving.

For example, I decided to sift through the Des Moines Register archives to see what they wrote about Mitt Romney’s business background. One article. Seriously. The search I ran was for Mitt Romney and Bain Capital (the firm he helped to found — and still holds a financial stake) — and only one article had any mention of his accomplishments at that firm. I would think that if someone was making the case that he would make a good president because of his business background (he can’t make the case as governor, as Huckabee has a better record), he might discuss that background. Or maybe, just maybe, some enterprising reporter somewhere might do a little research and ask some tough questions. A few have, JUST NOT IN IOWA. So, this little helper decided to do a little digging and, funny story, Romney’s discussions of his business dealings have the same traits as his attacks on Huckabee and McCain: drop of truth in an ocean of spin.

Romney’s Record on Job Creation

January 1st, 2008

Romney often insists that he knows how to create jobs, citing the companies he invested in, stating in a 1994 campaign commercial:

“Mitt Romney has spent his life building more than 20 businesses and helping to create more than 10,000 jobs”

If you didn’t read closely, you probably think that Mitt is claiming credit for 10,000 jobs. However, when pressed (funny how the stories always seem to change after he is pressed), slick Mitt says:

“That’s why I’m always very careful to use the words ‘help create.’ or Mitt Romney, ‘helped create’ over 10,000 jobs. I don’t take credit for the jobs at Staples. I helped create the jobs at Staples.” (see Boston Globe, August 8, 1994)

For the record, at the time of the article, Staples had over 10,000 employees, but Bain but put up only 7.1% of the capital. So, Mitt took 7.1% of the risk and is taking credit for 100% of the jobs. Nice. I invested $500 in the Google IPO — guess I “helped” create every job at Google. As an aside, later in the article, good old Mitt is back to his same tricks:

“I’m proud of being able to create – in helping to be able to create – any kind of employment, for whatever level,” (Mitt’s note to self: when people don’t know what I did, it’s “create” if anyone knows the truth, it’s “helped create” — and by “helped” I mean, kinda know some of the people who were involved in the company. Seriously, the guy has problems keeping his story straight even when he knows that he is going to get busted.)

How Romney Really Made His Money

December 31st, 2007

As detailed in a previous post, Romney only took the job as head of Bain Capital when he was guaranteed not to lose money and that someone else would be left holding the bag if he failed.
During his runs for Senate in 1994 and Governor in 2002 and now President, Romney portrays himself as a businessman with the skills to create jobs — and he did guide Bain to become a venture investor in the office supply store Staples — which did create numerous jobs. But this is the Romney nugget of truth in an ocean of embellishment. Bain did few venture capital (VC) deals and numerous leveraged buyouts (LBOs). These types of investments are often lumped together, but are very, very different. VCs invest their own money in unproven companies, normally to fund rapid growth enterprises (these are the people that give money to the guy with the tech gadget that he invented in the garage, allowing him to hire staff, buy space, etc.). LBOs do the opposite, they normally put up a small amount of their own money and investors in LBOs are high net worth individuals and organizations — no small investors need apply), borrow a lot and then take over (or take large stakes in) established companies. The goal (and it was Bain’s goal) is to rapidly move the company to profitability and then resell the company at an immense profit. Bain, in many cases, succeeded at this. As Romney said:

”I didn’t want to invest in start-ups where the success of the enterprise depended upon something that was out of our control,”such as ‘Could Dr. X make the technology work?”

Instead, Bain focused on LBOs, in the words of Bain investor: Howard Anderson:

“They will do everything they can to increase the value. The promise to [investors] is to make as much money as possible. You don’t say we’re going to make as much money as possible without going offshore and laying off people.”

Needless to say, Mitt Romney job creator was more like Mitt Romney: making the rich, richer — whether jobs are gained or lost. This has noting to do with whether Romney was good at his job, it has everything with which job he chose and for whom he created wealth.

Mitt Romney: Spin over Substance

December 31st, 2007

My main reason for supporting Mike Huckabee is that he is trying to run a positive campaign, focused on a compelling vision for the future of America. The problem is that once he pulled ahead in Iowa, he was subjected to relentless critiques by the media (which is good — at least they’re trying to keep one candidate on his toes) and other candidates (which is bad, as they should be discussing their vision for the future). The truly despicable part of the Romney attacks are that they have a minuscule amount of distorted half-truth, which the media blindly repeats, and then the Huckabee campaign is asked for their response. The galling thing is that the “Romney Narrative”:  (entrepreneurial businessman, rescued Olympics, won a blue state as a red candidate) has the same validity as his attacks on Huckabee: a factoid surrounded by a lot of garnish. Spin over substance. So, I spent a little time digging on Governor Romney’s record — and I think I may offer my research to him, as he seems to have forgotten his, um, entire professional career (less the year of the Olympics).

Early Career

The Romney campaign would have you believe that that after graduating Harvard Romney took a chance on a new consulting firm and then had the entrepreneurial zeal to leave his cushy consulting job, risking his career to become a venture capitalist to fund growing businesses. Not so much.

The Boston Globe has a great article discussing how Romney was persuaded to leave Bain’s consulting group to head Bain Capital. The fearless entrepreneur was neither fearless, nor an entrepreneur. Romney didn’t want to risk his “position, earnings and reputation” to start Bain Capital and only agreed to make the move based on the following conditions:

So Bain sweetened the offer. He guaranteed that if the experiment failed, Romney would get his old job and salary back, plus any raises handed out during his absence. Romney had one more concern: the impact on his reputation should he prove unable to do the job. In the end, Bain agreed to craft a cover story if necessary, promising to bring Romney back to the consulting firm and explain Romney’s return as a matter of his being more valuable to Bain as a consultant.”So,” Bain says, ”there was no professional or financial risk.”

Can I get that deal? I get all the upside and none of the downside and leave some other dope holding the bag if I screw up my job. Seems like Mitt Romney willingly throwing people under the bus is a lifelong practice.

Huckabee’s Immigration Record

December 18th, 2007

Everyone seemed to be jumping on Huckabee for not wanting to slam the door on children of illegals and after Huckabee was cheered at the YouTube debate because he didn’t want to sick it to a high-achieving child, his opponents have now resorted to digging through his time as governor to find instances when he was “soft” on immigration. Of course, the legions of reporters covering the campaign, can’t be bothered with fact checking often-repeated charges, hence, why I started this blog.

 In a NPR interview on May 16, 2005 Huckabee addressed the REAL ID Act — well before he was running for President — and used a theme that has become a hallmark of his campaign: that the federal government is responsible for immigration and they have passed the buck to the states. In his words:

“Well, once again Congress has stuck it to the states. I mean, that’s it in a nutshell. They don’t have the courage to put forth a national ID system which they believe that we need, so what they’re gonna do is to hand not only the responsibility but also the burden of paying for it over to states already strapped by unfunded mandates like increases in Medicaid obligations and a host of things. It’s completely the wrong approach. If we need a national ID system, and some have acknowledged that perhaps we’re at a point in our national security that we do, something that clearly identifies not only citizenship but criminal background, that’s fine. It becomes the essence of a passport. But let’s be honest about it. Let’s not ask states to make their driver’s license a national passport. And for heaven sakes, let’s not put people who are right now behind the counter of a DMV, who are not trained to be INS agents or FBI or CIA, suddenly make these folks who don’t earn enough money as it is, take on the burden of screening out terrorists. It’s a completely wrong way to approach this.”

In spite of the unfunded mandate created by the REAL ID Act, Huckabee still signed legislation making it impossible for undocumented individuals to gain driver’s licenses. The legislation, Act 2210,  is discussed locally — with opponents arguing that it was too onerous on legal immigrants. Furthermore, the bill’s sponsor, Doug Matayo praises Governor Huckabee’s leadership on the issue.

The bill stipulated that an applicant must document their status with a Social Security Number or prove that they do not have a SSN for a valid reason (i.e. applying for asylum, here on a legal visa, etc.). Furthermore, the Act states that if the federal government notifies the state that an individual with a license is illegal, that license could not be renewed — in essence, if the federal government controlled the borders and had a grasp on the illegal immigration problem, Arkansas would assist in ameliorating the problem.

 Furthermore, the Act called for the state to confirm that a Social Security Number was valid (something that employers are not required to do) and resolve any discrepancy before the license is issued.

Whenever you hear some other candidate espouse their position on illegal immigration, ask for results — you won’t find any. This, in essence, is why Huckabee is a formidable candidate (but also an easy target), he’s had to solve problems and not allow the perfect to be the enemy of the good — but he did get results — and those results went beyond what was required.