Romney's attempts to take credit for President Obama's auto-industry rescue plan takes a new twist today as an extensive investigative piece in the The Nation entitled, Mitt Romney's Bailout Bonanza, reports that Mitt Romney made at least $15.3 million profit on the rescue plan by virtue of an investment in Delphi. While Mitt Romney is quick to criticize those receiving any benefits, or insurance from government, but seems to regularly benefit greatly from government programs and tax loopholes.
This article is so long, complicated, and detailed it will take me a little time to decompose it so let me report segments from Mollie Reilly's summary in Mitt Romney Profited By At Least $15.3 Million From Auto Bailout: Report, as well.
A new report running Thursday in The Nation finds that Romney and his wife, Ann, made at least $15.3 million -- and perhaps tens of millions more -- as a result of bailout funds paid to General Motors. The story, an early copy of which was provided to The Huffington Post, is written by investigative reporter Greg Palast and was backed by the The Investigative Fund at The Nation Institute.
Romney's windfall from the bailout is directly tied to his relationship with Paul Singer, the billionaire hedge fund manager who donated $1 million to the Republican's presidential campaign in April. As The Nation reports, the Romneys invested at least $1 million with Singer's fund, Elliott Management, which is known for investing in distressed or bankrupt companies.
One of those bankrupt companies was Delphi, an auto parts maker that hit financial trouble after being spun off from its former parent, GM. Singer's fund bought up a controlling interest in Delphi for about 67 cents a share on average, The Nation calculates. By last November, Delphi's initial public offering was priced at $22 a share, thanks in part by efforts to cut costs by moving operations overseas and employing non-union workers. Delphi's stock price has continued to take off, with shares closing around $32 as of this week.
And, directly from the original piece in the The Nation's Mitt Romney's Bailout Bonanza:
The Treasury allowed GM to give Delphi at least $2.8 billion of funds from the Troubled Asset Relief Program (TARP) to keep Delphi in business. GM also forgave $2.5 billion in debt owed to it by Delphi, and $2 billion due from Singer and company upon Delphi’s exit from Chapter 11 bankruptcy. The money GM forgave was effectively owed to the Treasury, which had by then become the majority owner of GM as a result of the bailout. Then there was the big one: the government’s Pension Benefit Guaranty Corporation took over paying all of Delphi’s retiree pensions. The cost to the taxpayer: $5.6 billion. The bottom line: the hedge funds’ paydays were made possible by a generous donation of $12.9 billion from US taxpayers.
Based on the Romney's reported $1 million invested with Elliot in 2010, and a third of that portfolio invested in Delphi, the Nation is estimating the Romney's profit in Delphi's tax-payer financed revitalization to be $15.3.
While there is nothing wrong with Romney making money on his investments, if verified, this report will contribute to the image of Mitt Romney as being part of the super wealthy elite, who seem to profit from everything no matter what happens, and often have their investment failures benefit from government help, while at the same time criticizing less fortunate people who receive assistance, or even insurance payments from the government as "entitled, irresponsible takers," rather than "makers."
Previously, Philip Martin reported that Romney also profited from the bailout due to taxpayer funds saving Sensata which is now being shut to to transfer production to China. As President Obama pointed out during the debate. Mitt Romney is the last person who should be touting his China intentions as potentially advantageous for American workers.
And, Mitt Romney should be the last person criticizing anyone from receiving assistance or earned insurance payments they contributed to, from the government.