John H. Sununu, a top surrogate for Mitt Romney, wrongly claimed Bain Capital was “able to save jobs … about 80 percent of the time” at companies in which it had invested. Sununu was misreading or misrepresenting a Bain statement on revenues, not jobs.
Sununu, a former governor of New Hampshire and an early supporter of Romney, spoke to reporters May 22 on a conference call. When addressing Bain Capital, the private-equity investment firm founded by Romney, Sununu said: “About 80 percent of the time they were able to save jobs at companies.” To compound his error, Sununu went on to say Bain’s record on jobs creation was “certainly better than [Obama’s] batting average of trying to save jobs in alternative energy.” But Bain never made such a claim about jobs.
In a March 13 letter to its investors, Bain said “revenues grew during our ownership in 80 percent of the more than 350 companies in which we have invested.” It did claim that “the revenue growth in our companies has created hundreds of thousands of jobs over our 28-year history.” But there’s no doubt that other jobs were also lost at some of those companies. Bain provided no net job estimate, saying “experts agree that calculating net job growth across a portfolio of companies is difficult to do with precision.”
The Boston-based company followed that letter with a statement May 21 in which it repeated its revenue growth estimate without providing any specific information about jobs. The statement was in response to one-sided TV ads and Web videos aired by President Obama and a super PAC that supports him, Priorities USA Action. “Despite political attacks that emphasize the few companies that have struggled, the facts are that during Bain Capital’s ownership, revenues grew in 80 percent of the more than 350 companies in which we have invested,” the statement read.
We cannot verify Bain Capital’s claim of revenue growth or its claim that its revenues created “hundreds of thousands of jobs.” The firm did not provide any support for either claim.
Also, Bain’s statement refers to its 28-year history — not just Romney’s 14 years in charge. Romney cofounded Bain in 1984 and took a leave of absence in February 1999 to head the Salt Lake City Organizing Committee for the 2002 Winter Olympics. He did not return to Bain, and he formally transferred his ownership in the company to other partners, as the New York Times reported in a Dec. 18, 2011, article about Romney’s tenure at Bain.
As we reported before, private-equity firms are designed to create profits for investors, not necessarily jobs. A widely cited study released last year by the National Bureau of Economic Research reviewed private-equity transactions from 1980 to 2005 — tracking 3,200 firms and their 150,000 establishments — to assess the impact on jobs. It concluded that, in general, private-equity firms have “only a modest net impact on employment.”
– Eugene Kiely