The Sensata story has taken a life of it's own. It is all over twitter and slowly but surely working it's way into the mainstream media. Our friends on the right have caught wind of this and have not hesitated to go into spin mode/damage control. They are trying to distance Romney from this whole situation, because we all know Romney would never do anything like this despite getting filthy rich doing it. And like anything else that has ever gone wrong ever in the history of time, they are even trying to blame it on Obama. Of course, right?
Below are facts about the Sensata scandal that you need to know.
1. Mitt Romney Still Owns $8 Million in Bain Funds That Holds 51% of Sansata Shares.
Mr. Romney had nothing to do with that decision. It would be troubling to learn that the candidate still had such power over the company and was willing to exercise it. The workers, obviously desperate, are hoping that the campaign’s need to avoid bad publicity might help them.
Nonetheless, Mr. Romney remains deeply tied to business decisions like this. As Bain’s founder, he established its business model, which is to wring the maximum efficiency from a company for the benefit of Bain’s investors, even if that means closing plants, shipping jobs to China, and laying off American workers. That’s how private equity often works, and Bain has done it many times before, sometimes to the benefit of a company’s workers, and sometimes to their detriment.
When Bain first led a buyout of Sensata, in fact, it laid off hundreds of American workers and sent their jobs offshore. As the Times reported, the Labor Department spent $780,000 retraining some of the laid-off employees.
In addition, Mr. Romney’s generous retirement agreement ensures that he continues to profit from the deals and decisions that Bain makes. He owns about $8 million worth of Bain funds that hold 51 percent of Sensata’s shares. If Sensata saves money by closing the Freeport plant, that could add money to Mr. Romney’s trust accounts, now or after the election.
But Mitt has nothing to do with it, right?
2. Mitt Romney Will Profit from Sensata Being Outsourced.
While the workers and the town may suffer, Romney himself has done well as a result of Bain's work with the company. According to his recently released 2011 tax returns, Romney transferred $701,703 worth of Sensata stock to the Tyler Charitable Foundation, a 501(c)3 tax-exempt nonprofit controlled by Romney. The gift is listed on page 323 of the pdf, on form 8283 (below).
Moving the stock to his nonprofit brings Romney twin benefits. First, he gets to deduct the full value of the stock. At a 35 percent tax rate, that's nearly a $250,000 benefit. At 15 percent, it's just over $100,000.
Second, Romney is able to avoid paying capital gains taxes on the stock price increase. Romney's returns list no cost for the stock, and indicate he obtained them as part of a partnership interest in Bain. Avoiding capital gains taxes on the full increase would save an additional $100,000. In 2010, Romney gifted $170,000 worth of Sensata stock to his charity, saving $25,000 in capital gains taxes that year.
3. Mitt Romney Does NOT Have a Blind Trust Agreement with Bain Capital.
4. Mitt Romney has Ignored Pleas from the Workers.
The workers have pleaded with GOP presidential candidate Mitt Romney, the founder of Bain Capital, to exert his considerable influence to save their jobs. Romney still makes millions each year in income from Bain. So far, he has declined to weigh in, and the factory is scheduled to close by the end of the year.
5. Bain Capital Has Donated to Obama, but Have Donated Far More to Romney.
The right is using the fact that Bain Capital has donated to Obama as a way to somehow blame Obama instead of Romney. First off, let's say Bain gave $1 Billion to Obama. A donation is not an investment. There is a big difference between a company giving someone money and someone owning a big chunk of the company. Many businesses don't donate like you and I. We donate to the candidates we like, most businesses will donate to both candidates to hedge their bets. No matter who wins, they can ask for favors and wave the donation in your face.
Bain Capital has donated $43,428 to Obama.
They've donated $270,970 to Romney.
Who do you think they're rooting for?
Bain has also donated $621,900 to the Republican National Committee.