Newt Gingrich's Super PAC is running a
$3.4 million ad campaign in South Carolina
targeting Mitt Romney's record at Bain Capital
Newt Gingrich
outlines his case against Mitt Romney's experience at Bain in an interview with Byron York:
"What you have to question is if somebody went out and looted a company, leaving behind a shell." If the Reuters report is accurate, Gingrich said, "Bain Capital actually makes a huge amount of money while cratering the company -- I think you have to question whether that's a very defensible form of capitalism."
"I don't want to pre-judge Romney," Gingrich said. But "you can't have capitalism on the way up and socialism on the way down. You can't have somebody who says, I'm so smart, I want a huge upside, and by the way I'm so smart you're going to get ripped off while I get a huge upside."
"If these things all turn out to be relatively valid," Gingrich continued, referring to the case made against Romney in the new video, "at some point in the near future, he's going to have to do a press conference just on Bain…I think he has to come in at some point and say these were companies we were involved in, this is the actual cash flow of these companies, and this is how it happened. Which is inevitably going to lead to questions about records that he apparently doesn't want to release and conversations he's not going to be able to avoid."
Throughout the campaign, Mitt Romney has sought to explain the failure of some of the companies funded by Bain Capital as examples of the "creative destruction" of capitalism. Sometimes companies fail, he says, and when they fail, people lose jobs and investors lose money. But in the end, he says, the successes outweigh the failures—the rewards justify the risks.
The question that Newt Gingrich is asking is whether Romney's business strategy actually followed that model—or was it a "heads I win, tails you lose" type of arrangement. According to the Reuters story referenced by Gingrich, that's exactly the type of scenario that unfolded for at least one of Bain's investments, a steel mill that failed, but nonetheless generated nearly $10 million for Bain and its consulting firm. On that particular deal, not only did Bain profit despite the company's collapse, the Federal government was ultimately on the hook for $44 million to fund the mill's pension fund.
This has the makings of a tough attack on Romney, and even if it's successful, it's possible Gingrich wouldn't be the beneficiary. Conventional wisdom says attacks like these hurt the person delivering them as well as the target, but the flip side is that it gives Gingrich a chance to show he's willing to fight for the Republican nomination. But just as President Obama was fortunate to get the Jeremiah Wright stuff out of the way early in the campaign, while Romney probably wishes he weren't under fire, he's probably better off getting this attack now—and figuring out how to respond to it—than having to deal with it for the first time later in the year. Nonetheless, even if he overcomes it now, it's going to keep on coming up: this will be a central line of attack against Romney, whether it's from the Obama campaign or his Republican rivals.