Despite strongly resembling the elder Romney—the full head of strikingly dark hair, square jaw, dazzling smile—Mitt did little to draw attention to his parentage. George became more than just a mentor to his youngest son. He was a pathfinder, showing the way of their Mormon faith through the thickets of politics and business, home life, and character. Through his achievements and mistakes, George had bestowed many lessons, and Mitt soaked them up. It lay under nearly everything—their acts of charity, their marriage, their parenting, their social lives, even their weekly schedules.
Their family-centric lifestyle was a choice; Mitt and Ann plainly cherished time at home with their children more than anything. But it was also a duty. Belonging to the Mormon Church meant accepting a code of conduct that placed supreme value on strong families—strong heterosexual families, in which men and women often filled defined and traditional roles. The Romneys have long cited a well-known Mormon credo popularized by the late church leader David O. Over the next decade, the Romneys would have three more boys: Joshua was born in , Benjamin in , and then Craig in To Mitt, the special one in the house was Ann, with her wide smile, piercing eyes, and steadying domestic presence.
And woe was the boy who forgot it. Tagg said there was one rule that was simply not breakable: From the beginning, Mitt had put Ann on a pedestal and kept her there. He really genuinely still feels that way. Mitt is driven first by reason, while Ann operates more on emotion.
But she has remained his chief counselor and confidante, the one person who can lead Mitt to a final decision. Though she did not necessarily offer detailed input on every business deal, friends said, she weighed in on just about everything else.
But I know that they go and discuss it in private. Mitt imposed strict rules: With one exception, Tagg explained. The white Chevy station wagon with the wood paneling was overstuffed with suitcases, supplies, and sons when Mitt climbed behind the wheel to begin the hour family trek from Boston to Ontario.
As with most ventures in his life, he had left little to chance, mapping out the route and planning each stop. He had improvised a windshield for the carrier to make the ride more comfortable for the dog. Then Mitt put his sons on notice: Tagg was commandeering the way-back of the wagon, keeping his eyes fixed out the rear window, when he glimpsed the first sign of trouble.
As the rest of the boys joined in the howls of disgust, Mitt coolly pulled off the highway and into a service station. There he borrowed a hose, washed down Seamus and the car, then hopped back onto the road with the dog still on the roof. It was a preview of a trait he would grow famous for in business: As a result, he has numerous admirers but, by several accounts, not a long list of close pals.
Colleagues at work or political staffers are there to do a job, not to bond. He is not fed by, and does not crave, casual social interaction, often displaying little desire to know who people are and what makes them tick. Well, this was the imperial governor. The elevator settings restricted access to his office. The tape on the floor told people exactly where to stand during events.
This was the controlled environment that Romney created. His orbit was his own. His abstention from drinking also makes parties and other alcohol-fueled functions distinctly less appealing. He is the antithesis of the gregarious pol with a highball in one hand and a cigar in his mouth. Lacking an easy rapport with voters, he would come across as aloof, even off-putting. Even as he began shouldering more responsibility at work, Romney would assume several leadership positions in the Mormon Church.
But he could handle it. Church groups would leave late on a Friday, drive all night, and arrive early on Saturday morning. It was a grueling itinerary, Sievers said, so everyone used the time on the bus to sleep or read quietly. Mormon congregations, typically groups of to people, are known as wards, and their boundaries are determined by geography. Wards, along with smaller congregations known as branches, are organized into stakes.
Thus a stake, akin to a Catholic diocese, is a collection of wards and branches in a city or region. Unlike Protestants or Catholics, Mormons do not choose the congregations to which they belong. It depends entirely on where they live. In another departure from many other faiths, Mormons do not have paid full-time clergy.
Members in good standing take turns serving in leadership roles. They are expected to perform their ecclesiastical duties on top of career and family responsibilities. Those called to serve as stake presidents and bishops, or leaders of local wards, are fully empowered as agents of the church, and they carry great authority over their domains.
Mitt Romney first took on a major church role around , when he was called to be a counselor to Gordon Williams, then the president of the Boston stake. Romney was essentially an adviser and deputy to Williams, helping oversee area congregations. His appointment was somewhat unusual in that counselors at that level have typically been bishops of their local wards first.
But Romney, who was only about 30 years old, was deemed to possess leadership qualities beyond his years. Those positions in the church amounted to his biggest leadership test yet, exposing him to personal and institutional crises, human tragedies, immigrant cultures, social forces, and organizational challenges that he had never before encountered.
The Church of Jesus Christ of Latter-Day Saints is far more than a form of Sunday worship. It is a code of ethics that frowns on homosexuality, out-of-wedlock births, and abortion and forbids pre-marital sex.
It offers a robust, effective social safety net, capable of incredible feats of charity, support, and service, particularly when its own members are in trouble. And it works hard to create community, a built-in network of friends who often share values and a worldview. For many Mormons, the all-encompassing nature of their faith, as an extension of their spiritual lives, is what makes belonging to the church so wonderful, so warm, even as its insularity can set members apart from society.
But a dichotomy exists within the Mormon Church, which holds that one is either in or out; there is little or no tolerance for those, like so-called cafeteria Catholics, who pick and choose what doctrines to follow. That rigidity can be difficult to abide for those who love the faith but chafe at its strictures or question its teachings and cultural habits.
For one, Mormonism is male-dominated—women can serve only in certain leadership roles and never as bishops or stake presidents. The church also makes a number of firm value judgments, typically prohibiting single or divorced men from leading wards and stakes, for example, and not looking kindly upon single parenthood.
Romney was forced to strike a balance between those local expectations and the dictates out of Salt Lake City. Some believe that he artfully reconciled the two, praising him as an innovative and generous leader who was willing to make accommodations, such as giving women expanded responsibility, and who was always there for church members in times of need.
In the spring of , Helen Claire Sievers performed a bit of shuttle diplomacy to resolve a thorny problem confronting church leaders in Boston: Sievers was active in an organization of liberal women called Exponent II, which published a periodical.
The group had been chewing over the challenges of being a woman in the male-led faith. So Sievers went to Romney, who was stake president, with a proposal.
The idea was that, although there were many church rules that stake presidents and bishops could not change, they did have some leeway to do things their own way. Sievers went back to the Exponent II group and said they should be realistic and not demand things Romney could never deliver, such as allowing women to hold the priesthood.
On the day of the meeting, about women filled the pews of the Belmont Chapel. After an opening song, prayer, and some housekeeping items, the floor was open. Women began proposing changes that would include them more in the life of the church.
She was invited to social events sponsored by Exponent II but did not attend. As both bishop and stake president, he at times clashed with women he felt strayed too far from church beliefs and practice. To them, he lacked the empathy and courage that they had known in other leaders, putting the church first even at times of great personal vulnerability.
Peggie Hayes had joined the church as a teenager along with her mother and siblings. Mormonism offered the serenity and stability her mother craved.
Everyone was so nice. The church provided emotional and, at times, financial support. As a teenager, Hayes babysat for Mitt and Ann Romney and other couples in the ward. Restless and unhappy, Hayes moved to Los Angeles once she turned She got married, had a daughter, and then got divorced shortly after.
But she remained part of the church. Then she got pregnant again. The Romneys also arranged for her to do odd jobs for other church members, who knew she needed the cash.
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Then Romney called Hayes one winter day and said he wanted to come over and talk. He arrived at her apartment in Somerville, a dense, largely working-class city just north of Boston. They chitchatted for a few minutes. Hayes initially thought she must have misunderstood. Hayes was deeply insulted. She told him she would never surrender her child. In that moment, she also felt intimidated.
Here was Romney, who held great power as her church leader and was the head of a wealthy, prominent Belmont family, sitting in her gritty apartment making grave demands.
It was a serious threat. At that point Hayes still valued her place within the Mormon Church. You will never see the face of God. Not long after, Hayes gave birth to a son. She named him Dane. At nine months old, Dane needed serious, and risky, surgery.
The bones in his head were fused together, restricting the growth of his brain, and would need to be separated.
She sought emotional and spiritual support from the church once again. Hayes was expecting him. The decision was easy, yet she made it with a heavy heart. To this day, she remains grateful to Romney and others in the church for all they did for her family. But she shudders at what they were asking her to do in return, especially when she pulls out pictures of Dane, now a year-old electrician in Salt Lake City.
In the fall of , Exponent II published in its journal an unsigned essay by a married woman who, having already borne five children, had found herself some years earlier facing an unplanned sixth pregnancy. But the Mormon Church makes few exceptions to permit women to end a pregnancy. Church leaders have said that abortion can be justified in cases of rape or incest, when the health of the mother is seriously threatened, or when the fetus will surely not survive beyond birth.
She thought initially that would be her way out—of course she would have to get an abortion. But the doctors, she said, ultimately told her that, with some risk to her life, she might be able to deliver a full-term baby, whose chance of survival they put at 50 percent.
One day in the hospital, her bishop—later identified as Romney, though she did not name him in the piece—paid her a visit. He told her about his nephew who had Down syndrome and what a blessing it had turned out to be for their family. The woman said that she went on to have the abortion and never regretted it. One woman who had been active in the Exponent II organization was Judy Dushku, a longtime scholar of global politics at Suffolk University in Boston. At one point while Romney was stake president, Dushku wanted to visit the temple outside Washington to take out endowments, a sacred rite that commits Mormons to a lifetime of faithfulness to the church.
Earlier in her life, temples had been off limits to Mormons who, like Dushku, were married to non-Mormons. Now that rule had changed, and she was eager to go. But first she needed permission from her bishop and stake president.
But I can tell you one thing: Dushku was deeply hurt. Though she and Romney had had their differences, he was still her spiritual leader. She had hoped he would be excited at her yearning to visit the temple. By the time Mitt Romney walked into the Faneuil Hall offices of his mentor and boss, Bill Bain, in the spring of , the year-old was already a business-consulting star, coveted by clients for his analytical cool.
He was, as people had said of him since childhood, mature beyond his years and organized to a fault. Everything he took on was thought through in advance, down to the smallest detail; he was rarely taken by surprise. This day, however, would be an exception. Indeed, he had seen someone he knew when he interviewed Romney for a job in He seemed brilliant but not cocky. All of the partners were impressed, and some were jealous. From the start Romney was perfectly adapted to the Bain Way and became a devoted disciple.
Patient analysis and attention to nuance were what drove him. For six years, he delved into numerous unfamiliar companies, learned what made them work, scoped out the competition, and then presented his findings. An increasing number of clients preferred Romney over more senior partners. He was plainly a star, and Bain treated him as a kind of prince regent at the firm, a favored son.
Just the man for the big move he now had in mind. And so Bain made his pitch: Starting almost immediately, Bain proposed, Romney would become the head of a new company to be called Bain Capital. It sounded exciting, daring, new. It was an offer few young men in a hurry could refuse.
Yet Romney stunned his boss by doing just that. He guaranteed that if the experiment failed Romney would get his old job and salary back, plus any raises he would have earned during his absence. Still, Romney worried about the impact on his reputation if he proved unable to do the job.
Again the pot was sweetened. Boasting about those years when running for senator, governor, or president, Romney would usually talk about how he had helped create jobs at new or underperforming companies, and would claim that he had learned how jobs and businesses come and go. But the full story of his years at Bain Capital is far more complicated and has rarely been closely scrutinized.
Romney was involved in about a hundred deals, many of which have received little notice because the companies involved were privately held and not household names. Of those, Bain had lost money or broken even on Overall, though, the numbers were stunning: Romney was, by nature, deeply risk-averse in a business based on risk. He worried about losing the money of his partners and his outside investors—not to mention his own savings.
Sorting through possible investments, Romney met weekly with his young partners, pushing them for deeper analysis and more data and giving himself the final vote on whether to go forward. They operated more like a group of bankers carefully guarding their cash than an aggressive firm eager to embrace giant deals.
Some partners suspected that Romney always had one eye on his political future. The partner concluded that it was the latter.
Not Mitt Romney’s Bain Capital: Boston investment firm home to diverse political views - The Boston Globe
Whereas most entrepreneurs accepted failure as an inherent part of the game, the partner said, Romney worried that a single flop would bring disgrace. Every calculation had to be made with care. Despite some initial struggles, would prove to be a pivotal year for Romney.
It started with a most unlikely deal. A former supermarket executive, Thomas Stemberg, was trying to sell venture capitalists on what seemed like a modest idea: The enterprise that would become the superstore Staples at first met with skepticism.
Small and midsize businesses at the time bought most of their supplies from local stationers, often at significant markups. Few people saw the profit-margin potential in selling such homely goods at discount and in massive volume. But Stemberg was convinced and hired an investment banker to help raise money. The partners initially concluded that Stemberg was overestimating the market. A partner at another Boston firm, Bessemer Venture Partners, had invited him to the first meeting with Stemberg.
But after that, he took the lead; he finally had his hands on what looked like a promising start-up. It was a big success at the time. Yet it was very modest compared with later Bain deals that reached into the hundreds of millions of dollars.
For years Romney would cite the Staples investment as proof that he had helped create thousands of jobs.
And it is true that his foresight in investing in Staples helped a major enterprise lift off. But neither Romney nor Bain directly ran the business, though Romney was active on its board.
At the initial public offering, Staples was a firm of 24 stores and 1, full- and part-time jobs. Its boom years were still to come. Romney resigned his seat on the board of directors in in preparation for his run for governor. A decade later, the company had more than 2, stores and 89, employees. Assessing claims about job creation is hard. Staples grew hugely, but the gains were offset, at least partially, by losses elsewhere: I helped create the jobs at Staples.
Howard Anderson, a professor at M. I think you can only really claim credit for the jobs of the company that you ran. The same year Romney invested in Staples—digging into a true start-up—he also inked the biggest transaction, by far, that Bain Capital had put together until then.
Whereas a venture-capital deal bet on a new business, pursuing an LBO meant borrowing huge sums of money to buy an established company, typically saddling the target with big debts. The goal was to mine value that others had missed, to quickly improve profitability by cutting costs and often jobs, and then to sell.
He knew himself, knew that his powers ran less to the creative than to the analytical; he was not at heart an entrepreneur. Perhaps that was what led him to push the Pause button at the outset with Bill Bain.
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But he now felt ready to take on much bigger financial risks, mostly by making leveraged bets on existing companies, whose market was known and whose business plans he could parse and master. Billions of dollars were being made in the field of leveraged buyouts in the roaring 80s, and Romney was fully in the game, continuing to ratchet up his favored strategy. In his autobiography, Turnaround, Romney put it more bluntly: Then we would go to work to help management make their business more successful.
While putting relatively little money on the table, Bain could strike a deal using largely debt. That generally meant that the company being acquired had to borrow huge sums. But there was no guarantee that target companies would be able to repay their debts. At Bain, the goal was to buy businesses that were stagnating as subsidiaries of large corporations and grow them or shake them up to burnish their performance.
High-yielding junk bonds were appealing to investors willing to take on risk in exchange for big payouts. But they also represented a big bet: The arcane domain of corporate buyouts and junk-bond financing had entered the public consciousness at the time, and not always in a positive way.
I am a liberator of them! Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Romney, of course, never said that greed is good, and there was nothing of Gekko in his mores or style. But he bought into the broader ethic of the LBO kings, who believed that through the aggressive use of leverage and skilled management they could quickly remake underperforming enterprises.
Romney, for his part, contrasted the capitalistic benefits of creative destruction with what happened in controlled economies, in which jobs might be protected but productivity and competitiveness falters.
It was a point of view he would stick with in years ahead. Indeed, he wrote a op-ed piece for The New York Times opposing a federal bailout for automakers that the newspaper headlined, let detroit go bankrupt. Thanks to a highly leveraged but successful takeover and turnaround of a wheel-rim maker, Accuride, Bain Capital became a hot property. During a break at a photo shoot for a brochure to attract investors, the Bain partners playfully posed for a photo that showed them flush with cash.
Romney tucked a bill between his striped tie and his buttoned suit jacket. Everything was different now. It was time for another road show, but the days of soliciting prospects for scarce cash in obscure locales were mostly over. This time Romney and his partners headed to Beverly Hills, California.
Arriving at the intersection of Rodeo Drive and Wilshire Boulevard, they headed to the office of Michael Milken, the canny and controversial junk-bond king, at his company, Drexel Burnham Lambert.
Romney knew Milken was able to find buyers for the high-yield, high-risk bonds that were crucial to the success of many leveraged-buyout deals. But Drexel was still the big player in the junk-bond business, and Romney needed the financing. On September 7, , two months after Bain hired Drexel to issue junk bonds to finance the deal, the S. Romney had to decide whether to close a deal with a company ensnared in a growing clash with regulators.
The old Romney might well have backed off; the newly assertive, emboldened Mitt decided to press ahead. The newly constituted company, later known as Stage Stores, refocused in on its small-town, small-department-store roots. It was one of the most profitable leveraged buyouts of the era. Romney sold at just the right time. Shares plunged in value the next year amid declining sales at the stores. So ended the story of a deal that Romney would not be likely to cite on the campaign trail: Not every deal worked out so well for Romney and his investors.
When a major customer stopped buying, the company failed and jobs were lost. The company borrowed heavily to modernize plants in Kansas City and North Carolina—and to pay out dividends to Bain.
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But foreign competition increased and steel prices fell. GST Steel filed for bankruptcy and shut down its money-losing Kansas City plant, throwing some employees out of work. Union workers there blamed Bain, then and now, for ruining the company, upending their lives, and devastating the community.
But Dade wound up laying off more than 1, people and filed for bankruptcy protection in , amid crushing debt and rising interest rates. The company cut benefits for some workers at the acquired firms and laid off others. When it merged with Behring Diagnostics, a German company, Dade shut down three U.
The amount of money now being earned at Bain Capital was skyrocketing, and much of it came from a handful of giant deals. A mere seven weeks after buying TRW, Romney and his partners flipped the company. The second deal cited by Romney took longer but involved even more good timing and luck.
It began with a renowned Italian investor named Phil Cuneo, who had the idea of buying the Italian version of the Yellow Pages.
It seemed a solid investment in a firm with a staid and stable business model. But mere months after closing the deal, Cuneo and his Bain associates realized that they had acquired a company that might benefit from the surging interest in dot-com businesses; the Yellow Pages company owned a Web-based directory that had the potential to be the Italian version of America Online or Yahoo.
There is no public documentation of how the profits were distributed, but at that time at least 20 percent of the return would have gone to Bain Capital. If Romney made a side investment in the deal, as was standard among Bain partners, he would have made even larger gains. A Romney spokesman did not respond to questions about the deal.
It was those kinds of deals that enabled Bain Capital to report the highest returns in the business in the s. For 15 years, Romney had been in the business of creative destruction and wealth creation. But what about his claims of job creation? The lucrative deals that made Romney wealthy could exact a cost. Maximizing financial return to investors could mean slashing jobs, closing plants, and moving production overseas.
It could also mean clashing with union workers, serving on the board of a company that ran afoul of federal laws, and loading up already struggling companies with debt. Make money for investors.
Sometimes everything worked out perfectly; a change in strategy might lead to cost savings and higher profits, and Bain cashed in. Sometimes jobs were lost, and Bain cashed in or lost part or all of its investment. Marc Wolpow, a former Bain partner who worked with Romney on many deals, said the discussion at buyout companies typically does not focus on whether jobs will be created. Eliminating redundancy, or the elimination of people, is a very valid way.
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