The predictions coming out of the farming community of Ames, Iowa, hold that former Massachusetts governor Mitt Romney — a certified city-slicker with a double-barrel degree from Harvard’s business and law schools — is expected to be the top vote getter in this weekend’s closely watched straw poll.If Romney performs according to expectations, he will further enhance his standing — along with Arizona senator John McCain and former New York City mayor Rudy Giuliani, both of whom declined to participate in the Iowa poll — as a Republican front-runner for his party’s White House nomination, and move another step closer to ultimately replacing President George W. Bush.
As the date of the straw poll draws closer, the headlines about Romney focus on his stalwart Mormonism and his recent transformation into an anti-choice politician. But what has attracted little attention in farm-belt Iowa or, indeed, in almost any part of the nation — rural, suburban, or urban — is the fact that Romney is without a doubt the most business born-and-bred candidate to achieve GOP viability since Herbert Hoover in 1928 and Wendell Wilkie in 1940.
Republicans, by their own admission, worship businessmen, and give CEOs and board chairmen the sort of status that cardinals merit among Catholics — and bishops enjoy among the Mormons. But neither Hoover’s business successes nor Wilkie’s Wall Street backers saved them from political ignominy, and no magnate since has captured the party’s nomination.
Can Romney break that streak? It is a little early for long-term crystal-ball gazing, but a close look suggests that Romney’s 25-year business career, during which he amassed a fortune thought to be more than a quarter-billion dollars, could be both a boon and a burden to him in the national political arena.
In that career, he gathered an impressive set of skills and an even more impressive network of allies, both of which are transitioning smoothly from the financial realm to the political. At the same time, he has left behind a trail of laid-off workers, bankrupt companies, cozy relationships, and whiffs of scandal that could sour voters’ tastes. He has showered many people with cash and earned their loyalty — but that’s not the behavior that voters typically consider to be presidential.
Love in Bain
Private equity describes a wide range of businesses. Some are little more than a wealthy person with a checkbook. Bain Capital is at the other end of the scale: at any given time it owns a conglomeration of dozens of companies, worth tens of billions of dollars. Controlling this empire, from its founding in 1984 to his departure for the Winter Olympics in 1999, gave Romney access to a great many levers with which to build a loyal following.
Since becoming a very wealthy man by the mid 1990s, several observers say, Romney has cared less about making more money and more about how his loyal and grateful minions can help him politically: collecting contributions for him, and burnishing his image by providing tales of his successful leadership. (See “Rewriting Staples History.”)
Since then, political observers add, Romney has been laying the groundwork for what he has sown this year: a far-flung fundraising network, outpacing his Republican rivals by raising more than $37 million in individual contributions. That money has primarily come from wealthy people in the finance and business communities, each giving the maximum allowed: donations of $2300. His “bundlers” — supporters who raise large sums by soliciting donations from their friends and associates — include dozens of people who have, in some way, benefited from Romney’s business acumen (or largesse) and through the private-equity company he co-founded, at the behest of his former boss (and key funder) William Bain.
That support begins with dozens of current and former employees of Bain Capital, its sister management-consulting firm Bain & Company, and Bain spin-offs, who along with their spouses have contributed more than a half-million dollars to Romney’s campaign, according to a Phoenix analysis of campaign-finance reports.
Equally generous have been the banking, legal, and advisory firms that Bain Capital uses for its large venture-capital and leveraged-buyout (LBO) deals. Bain has remained loyal to a small number of elite firms for these transactions, including Goldman Sachs, Merrill Lynch, and Kirkland & Ellis. Employees of those three companies and their spouses account for well over another half-million dollars in Romney’s coffers. Romney is hardly unique in that regard — Barack Obama has received more than a half-million from Goldman Sachs and Lehman Brothers — but when it comes to successfully soliciting funds from Wall Street, Romney has out-raised his more-politically-powerful competition, including McCain, Rudy Giuliani, and Hillary Clinton.
