President Barack Obama enjoys attacking Mitt Romney for his work at Bain Capital, while portraying it as a vampire-like operation, destroying the livelihoods of entire communities for short-term gain. Obama’s donors funding his super PAC, Priorities USA, even went so far as to blame Romney for the death of a laid-off worker’s cancer-stricken wife.
As a former statewide elected office holder in Ohio, I know politics is an ugly business. But I never thought I would witness allies of a sitting president of the United States accuse his opponent of murder.
In reality, what Bain does is good. With 80 percent of the more than 350 companies it invests in turning a profit, Bain expands the operations of companies that work and reorganizes companies that do not. In America’s dynamic economy, this sort of change and innovation is essential to job and wealth creation.
In what can only be described as shameless hypocrisy, it turns out that Obama does support venture capitalism when it supports his political purposes.
A few months ago, Sunoco was on the verge of closing its Philadelphia refinery. According to the company’s 10-K report, in order to keep the refinery open, it would have had to pay $1.3 billion for “significant expenditures for environmental projects and compliance activities” to satisfy the carbon-limiting requirements of Obama’s EPA mandates. And the company rightfully feared that those regulatory costs would continue to grow under the Obama administration. So Sunoco decided to get out of the refining business entirely.
When Obama found out that a refinery was going to close and hundreds of union jobs would be lost in a key battleground state while gas and heating-oil would skyrocket right before the election, he had one of his cronies call in a favor with one of his Wall Street friends.
Gene Sperling, the director of Obama’s National Economic Council, started discussions to sell the refinery to the Carlyle Group, a politically connected private equity firm. Carlyle plans on taking a two-thirds stake in the refinery at no cost, and promises to invest millions on upgrades to the refinery. By doing so, it will keep American fuel prices under control and save 850 unionized jobs. To ensure the rescue happened, Pennsylvania politicians were happy to work with the Obama administration and offer $25 million in subsidies, at taxpayers’ expense.
A major concern for Carlyle was an agreement Sunoco had made in 2006 to limit emissions at its refineries. Obama’s White House referred the issue to the EPA, which quickly modified the agreement.
Given all the money the bailout showered on the financial services sector, it’s no skin off Carlyle’s back to buy a refinery if it helps keep the president in office, even if the administration’s policies force it to sell or close the facility after the election. But all of this could have been avoided if EPA rules were less onerous.
It’s sad that Obama has no problem using venture capital to delay the prosperity-destroying results of his regressive, anti-growth policies until after the election.
Ken Blackwell, a former U.S. ambassador to the U.N. Commission on Human Rights, is a member of the Becket Fund for Religious Liberty’s board, a senior fellow at the Family Research Council, and Ohio’s former secretary of state.