Firm at center of political issue has local ties
Gary B. Gray
Today at 8:19 PM
Johnson City native and Science Hill High School alumnus William Bain Jr. is the man who appointed Republican presidential frontrunner Mitt Romney as Bain Capital’s first CEO.
The Boston-based private equity firm established by Bain in 1984 is being ripped in the media and by Republican presidential candidates for its history of buying struggling companies then selling them off for a profit at the expense of workers laid off in the wake of closures and consolidations.
The Johnson City Press’ attempts to reach several people familiar with Bain yielded no results late Friday.
As the Jan. 21 South Carolina primary approaches, competitors for the Republican nomination have blasted Romney for leading a group of “corporate raiders” during his 25-year tenure with Bain. Texas Gov. Rick Perry has called the company’s tactics “vulture capitalism,” and television ads now airing boast that Bain Capital is “More ruthless than Wall Street.”
Bain, who attended East Tennessee State University before transferring to Vanderbilt University, invested in two South Carolina companies that went under. One was GS Steel in Georgetown, S.C. The other was Holson Burnes in Gaffney, which lost 150 jobs when it closed in 1992.
Meanwhile, the Democratic National Committee is spotlighting bankruptcies and layoffs under Bain with a release that states: “Romney closed over a thousand plants, stores and offices, and cut employee wages, benefits and pensions. He laid off American workers and outsourced their jobs to other countries. And he and his partners made hundreds of millions of dollars while taking companies to bankruptcy.”
In 1998, Value Partners, an Italian management consulting firm, claimed that Bain unlawfully caused members of its Brazil office to enter into a conspiracy with Bain to take over that office. At that time, Bain officials testified in court that they had the right to expand into the region without paying start-up costs and risks normally assumed by a new branch office, according to PR Newswire, which covered the proceedings.
In 2002 following a four-week trial, the jury found Bain Capital liable for unfair competition and awarded Value Partners $10 million in compensatory damages and about $2.5 million in prejudgment interest.
Romney maintains that his work at Bain helped create about 100,000 jobs, though he has acknowledged several thousand job losses.
“There is a lot of misinformation being spread, purely for political purposes and on both sides of the aisle, as it pertains to private equity,” Steve Judge, Bain Capital’s interim president and chief executive officer, said in a Jan. 9 news release. “While the business model has evolved over time, the fact of the matter is private equity provides capital and operational expertise to companies that are often underperforming or on the brink of failure.”
According to the Vanderbilt University website, Bain resides in Boston, is chairman of the board of Bain, Willard Companies, L.P., and director of the Hinckley Yacht Co. He founded Bain and Company, a worldwide consulting firm, in 1973, and later, Bain Capital, which now manages about $60 billion in assets.
In 1999, he was listed in a special edition of Boston Business Journal as “one of Greater Boston’s 100 most influential business people of the 20th century.” He has had a long involvement with Boston Children’s Hospital, and the Boys and Girls Clubs of Boston. He also is a trustee of the Naples Children and Education Foundation of Naples, Fla.