Saturday, October 27, 2012

A Romney Win Could Mean Cronyism on Steroids

Linda Beale at Business Insider explains (my bold):
Just a quick note this morning on an interesting article in the October 29, 2012 edition of The Nation magazine, Lee Fang, Romney Family Business: Investors in Tagg Romney's firm, Solamere Capital, could hit the jackpot if his father wins, The Nation (Oct. 29, 2012), at 18.

Marc Leder, the wealthy investor who hosted the Romney fundraiser last May in Boca Raton where Romney made his comment disparaging almost half of Americans as personally irresponsible and happy to depend on government, is just one of several high-powered investors linked to the Romney family business empire.  The Nation article describes it this way.

In 2008, ... [Romney's] eldest son Tagg and his chief fundraiser Spencer Zwick formed Solamere Capital, a private equity firm .... What Tagg lacked in experience in the world of high finance, he made up for with a vast network of political connections forged through his father, who seeded the firm with $10 million and was the featured speaker at its first investor conference in January 2010. ...
Unlike most private equity firms..., Solamere specializes in something else:  billing itself as a 'fund of funds' with 'unparalleled networks', it provides investors with 'unique access' to an elite set of other private equity firms and hedge funds.

Solamere, a firm predicated on its founders' relationship with Romney, presents a channel for powerful investors to influence the White House if he wins. ...

The looming matters range from general matters that affect all private equity firms--such as tax changes or the new rules mandated by the Dodd-Frank financial reform bill--to more specific concerns relating to businesses owned or controlled by Solamere's partner firms.   Many of these businesses, in fact, depend on government contracts; indeed, some have been accused of fleecing taxpayers.... A Romney administration could directly affect the profitability of these companies--and, by extension, potentially the success of Tagg's venture....

Take Leder ... whose Sun Capital firm bought a stake in the Scooter Store last year.  The company, known for its ubiquitous television ads promising seemingly free motorized wheelchairs for Medicare beneficiaries, has struggled as the Centers for Medicare and Medicaid Services, the federal agency that governs the programs, implements rules to curb rampant billing fraud.  ...80 percent of the claims for scooters and power wheelchairs did not meet Medicare requirements, meaning that $492 million a year is being improperly spent.  In 2007, the Scooter Store gave up $13 million in Medicare payments and paid $4 million to settle with the Justice Department over allegations that it had overbiled for its electric wheelchairs. ... Disclosures ... suggest that pressuring the government is the only way [Leder's] investment in Scooter Store can turn a profit.  Since Leder's firm invested in the Scooter Store, the company has spent nearly $900,000 on lobbyists to push back on [the] two latest challenges to its motorized-scooter empire.


  1. Mild stuff compared to what's gone on over the last four years. Your column is lame.

  2. If you look closely at Fannie/Freddie, you will have to conclude that nothing the Repubs can do will _possibly_ match what the Demd have done already.

  3. Fannie and Fred had their heyday during Bush the lessers reign. Obama=Bush=Romney. If you're too stupid to see that then quit commenting on a blog for intelligent people.

  4. Anon, you are a fucking idiot hack.

  5. The housing crises actually started under Clinton. As Peter Schiff said in his mortgage bankers speech about housing prices:"Housing prices just kept up with inflation until 2000,when something weird happened."