The first story about Mitt Romney’s Bain years that genuinely angers me

I haven’t paid much attention to the debates over Romney’s Bain years. His behavior struck me as par for the course in that unsentimental neighborhood of American financial entrepreneurship that Bain called home.

My own beef concerns the immense psychological distance between Romney’s plutocratic policy positions and the creative destruction he has witnessed or unleashed over his business career. How could someone who witnessed the human consequences of plant closings and layoffs speak so disdainfully of 47 percent of Americans who are epically less fortunate than himself? How could he so obviously lack a sense of urgency regarding those left without health coverage—not to mention the elderly, low-income, and disabled Americans who rely on programs such as Medicaid his budget would deeply cut?

Because I’m so angry at Romney for policy reasons, and because I don’t know enough about the granular details of what Bain actually did, I’ve avoided prognostication about Romney’s character as a businessman beyond that.

I make an exception for this story. The story comes from the Crooks and Liars website citing a story by Jason Cherkis and Zach Carter at Huffingtonpost, via UCSF’s essential library of Legacy Tobacco Documents. The story concerns Bain’s role helping Philip Morris in the U.S., and helping British American Tobacco hawk cigarettes in post-Soviet Russia.  Mitt Romney was the CEO who oversaw this business.

Samefacts readers know my strong views regarding cigarettes, and the obscenity of people profiting from a product that kills 400,000 Americans and millions of people around the world. My wife and I watched her parents suffer from lung cancer. Both died, way too young, from this disease.

Bain provided a variety of strategic services and advice for Philip Morris, including this nugget from Huffingtonpost:

In one document labeled “Corporate Affairs,” Bain argues that the cigarette maker needs a “coordinated, long-term approach to legal/regulatory/public opinion opportunities and challenges to maximize shareholder wealth.”

Bain’s advocacy amounted to an early example of corporate “astroturf” tactics that are now commonplace….  In the same “Corporate Affairs” document, under “mobilizations,” Bain consultants encourage the company “to conduct federal and local grassroots programs in support of the company’s legislative and regulatory efforts.”

For one such mission, Bain called on the company “to initiate and execute programs to support smokers’ rights, combat regulatory moves and improve corporate image.” Specifically, Bain felt Philip Morris could build support within the hospitality industry and by openly seeking to curtail access to cigarettes for young people.

In another 1995 document, Bain suggested that the company produce smokers’ rights newsletters and jumpstart “state-level” lobbying work that involved phone campaigns. Consultants suggested augmenting their “phone scripts” to include the specter of job losses due to cigarette tax increases, and bringing up their own “medical, science related issues.” that could “combat regulatory pressure.”

Huffpo also links to documents in which Bain advises BAT to pursue activities which “support consumers’ freedom of choice to smoke.”

Post-Soviet Russia has experienced public health catastrophe. Tobacco and alcohol misuse are central elements of the problem. When I visited Saint Petersburg doing HIV prevention work, I met many public health workers who lit up to lighten the tension of their difficult work. I imagine quite a few smoked Marlboro’s, Benson and Hedge’s and other western brands–whose all-too- effective marketing sways many people who might otherwise have quit.

Bain is hardly the only firm to court tobacco money. It still deserves scorn for being an enthusiastic partner in the sale of addictive products that damage and shorten millions of lives. To my mind, helping tobacco companies sell cigarettes and evade regulatory constraints is no better than orchestrating a plant closing, breaking implicit contracts with employees, and the other catalog of questionable activities Bain is accused of having done.

This story is important for its own sake. Tobacco also reveals the amorality with which too many entrepreneurs and firms approach the business enterprise.

Comments

  1. Joseph A. Martin says

    Altogether I find it easy to despise Bain and its ilk. Finance in the United States is overbuilt, with a GDP share 3 times what it was 60 years ago. Its obvious function of mediating saving, borrowing and risk have been augmented by huge additions of tax arbitrage, rent seeking, and rarely prosecuted fraud.

    Meanwhile, back at the facts. It’s worth noting that Soviet Russia was a world leader in alcohol and tobacco misuse. It’s certainly a catastrophe that nothing has improved since then but not a change.

  2. karen says

    It’s been obvious from the beginning that to Romney and Bain, other human beings and communities damaged or destroyed in the course of their march to wealth were just so much road kill. This seems to me to tell us everything we need to know about Mitt Romney. I’ve been mildly surprised that in all the discussion about “character” it never seems to come up.

  3. Ann says

    “Mitt Romney was the CEO who oversaw this business.”

    Are you talking about Bain Capital or Bain Consulting? Romney was running Bain Capital, and someone else was running Bain Consulting, which was the company doing the consulting in these cases.

    You should read Megan McArdle’s post. She makes the effort to actually check out a few facts before pointing fingers.

    • stratplayer says

      Ok, I read McArdle’s piece, and even she had to acknowledge that Romney was indeed working at Bain & Company (the consulting firm)at the time it took on Phillip Morris as a client, and the so-called “Russian Strategy” seems to have been cooked up while he was still there. The campaign is flat-out lying when it says he left Bain & Company by 1992.

      Btw, I had to watch both my father and father-in-law die painful deaths from lung cancer. Romney has no moral center whatsoever.

      • says

        It wasn’t. While he was there, they cooked up a plan to help a client acquire some tobacco companies, which failed. THe stuff HuffPo emphasizes came well after it seems clear that Gadiesh was in charge.

      • Ann says

        True, it appears that Bain & Co. did consulting work for Phillip Morris while Romney was running it. If you believe in this sort of chain of collective guilt, then does it bother you that so many Justice Department officials have represented Guantanamo Bay detainees? Does your opinion on this depend on whether you personally watched anyone die on Sept. 11 or in another terrorist attack? Are links to tobacco-selling worse than links to terrorism, perhaps because smoking is legal and people choose to do it?

        • Maxwell says

          then does it bother you that so many Justice Department officials have represented Guantanamo Bay detainee

          This is an idiotic way make your point, given that few Guantanamo Bay detainees were/are guilty of anything.

          • Geoff G says

            And every single one of them was innocent until proven guilty, at least, that’s what Americans believe is a cornerstone of our freedom. Accordingly, every defendant, even the most vile, is entitled to a defense, and the state has the burden of proof, even when the defendant appears exceptionally vile. If lawyers decide that some people are unworthy of defense, then lawyers, not judges or juries, are determining guilt. (I promise you, Ann, that if this happened to you or a loved one, you’d be screaming to the local bar disciplinary committee so loud astronauts could hear it, and any number of lawyers would take your case against the defaulting lawyer, pro bono if necessary.) Thus, a lawyer has an ethical duty to defend a client she thinks might be guilty, a duty no less mandatory than the duty to preserve confidentiality, account for client funds, and represent the client zealously within the bounds of the law.

            A corporate CEO does not have an ethical duty to participate in any business that makes money. A CEO who says “I don’t want to manufacture napalm” has a moral right to do so, and no ethical principle or canon that would compel him to act against his conscience. If the board or shareholders wanted to fire the CEO for this refusal, they’d be within their rights too, but the CEO has not transgressed morally or ethically (provided he was upfront about his refusal).

    • Barry says

      “You should read Megan McArdle’s post. She makes the effort to actually check out a few facts before pointing fingers.”

      This would be a first for her,if she did.

  4. CTObserver says

    So, if I understand, Harold Pollack is “angry” at anyone who has ever had any role in producing or selling tobacco to anyone, anywhere? Are there any other legal products that he thinks are beyond the pale?

    Given the author’s premises, I suppose the only moral thing for tobacco producers to do would be to cease operations. He’s entitled to his feelings, but the fact is that there are many people who want to use tobacco, a product which is legal, as far as I know, everywhere in the world. It is not unreasonable for other people, even non-smokers or anti-smoking activists, to provide them the product they want.

    I am very unimpressed with Mr. Pollack’s anger.

    • NCG says

      I would agree with you, except that I think people deserve to be warned first. In big, ugly photographs on the package, of what happens to smokers. And of course, big penalties for selling/advertising to minors

      I’ve never seen a Russian ciggie package, and I don’t know what they put on them. If it’s anything short of a person with one of those holes in their throat, then I’m with Harold.

      Why should we coddle people who sell death, even if humans like to smoke? Tax the sh*t out of them too, while we’re at it. Cost of doing business to them, and no, it’s not something to be proud of.

      But other than that, I agree with you.

      • CTObserver says

        I’ve never seen Russian cigarette packages, either, but I lived in Germany in the late 1980s, and smoking was widespread, tolerated, and much more open than in the US. Cigarettes were commonly advertised on billboards, and I don’t believe the package warnings were any more graphic than they were in the US at the time.

        But, so what? Anyone who wasn’t aware that smoking was unhealthy must have been comatose. If you want to vent your spleen on Americans who legally sell legal products in other countries, have at it. But, even if you could somehow coerce US companies into stopping selling tobacco, there are plenty of other companies that will, and the smokers will continue to smoke. If you really want to reduce smoking, try to convince young people that it isn’t worth it.

        Just out of curiosity, do you have the same hostility to people who make and sell alcoholic beverages? What about GM foods? Any other products that would warrant ostracism for their producers?

        • NCG says

          “Just out of curiosity, do you have the same hostility to people who make and sell alcoholic beverages? What about GM foods? Any other products that would warrant ostracism for their producers?”

          Alcohol: no, it doesn’t cause cancer, or anything at all if used responsibly. GMO foods= not if they label it (though, I also might want those banned outright for enviro reasons. So sue me! ; > )

          I’ll make you a deal: put really ugly photos on the packages, keep the things away from minors, and I promise to be nicer to the poor, abused tobacco magnates, if I ever meet one.

    • byomtov says

      I suppose the only moral thing for tobacco producers to do would be to cease operations.

      That sounds right to me.

      Legal or not, people who hawk tobacco for profit are no better than hired killers.

      Will smokers smoke regardless? Who cares? It’s not a relevant issue.

    • Maxwell says

      *…provide them the product they want*

      They don’t want tobacco, they want a nicotine package engineered to cause addiction. Did you forget about the companies’ manipulation of nicotine? Never happened, eh? It’s obvious that people buy in accordance with the cigarette companies’ wishes, not their own.

  5. Gevalt says

    Given that smoking kills Ds and Rs indiscriminately, I wonder if this position has the power to sway people from Team RED to Team BLUE?

    I think the political pros won’t be ready to risk it. :(

  6. tom says

    Does the fact that Brother Romney is a Mormon, but actively promoting smoking, bother anyone? Does it say anything about his character?

    • Steve Crickmore says

      Romney’s character… You will have to ask Angel Moroni. “And again, tobacco is not for the body, neither for the belly, and is not good for man, but is an herb for bruises and all sick cattle, to be used with judgment and skill” is from the Mormon’s strict “Covenant and Doctrines” edited by Joseph Smith in 1833, a revelation engraved by angel Moroni, (the son of Mormon another angel), who buried the golden plates. But angel Moroni said nothing about making lots of money by addicting non Mormons, the younger and more unskilled. the better, (since they will be longer customers) to this drug, which by Smith’s admission is only good for “sick cattle”. So until angel Moroni (he is still alive, according to Mormons )strictly forbids the lucrative selling of toxic legal drugs…Welcome to our next President (very possibly,) and the guidelines for his personal morality!

    • Steve Crickmore says

      Romney’s character? You will have to ask Angel Moroni. “And again, tobacco is not for the body, neither for the belly, and is not good for man, but is an herb for bruises and all sick cattle, to be used with judgment and skill” is from the Mormon’s strict “Covenant and Doctrines” edited by Joseph Smith in 1833, a revelation engraved by angel Moroni, (the son of Mormon another angel), who buried the golden plates. But angel Moroni said nothing about making lots of money by addicting non Mormons, the younger and more unskilled. the better, (since they will be longer customers) to this drug, which by Smith’s admission is only good for “sick cattle”. So until angel Moroni (he is still alive, according to Mormons )strictly forbids the lucrative selling of toxic legal drugs…Welcome to our next President (very possibly), and the guidelines for his personal morality!

      • says

        I want to clear up a factual inaccuracy in this comment. The Doctrine and Covenants were not written by Moroni ( an ancient prophet) but were revelations received by the Prophet Joseph Smith in the 1830′s and 40′s. The Word of Wisdom is a modern revelation given to us by God to warn us because in our day we would have people trying to sell us these products and kill us.

        ” 4 Behold, verily, thus saith the Lord unto you: In consequence of evils and designs which do and will exist in the hearts of bconspiring men in the last days, I have cwarned you, and forewarn you, by giving unto you this word of wisdom by revelation”

        I am thankful that God cares enough about us to give us this health code for our days. Members of the Church of Jesus Christ of Latter-day Saints have a much higher life expectancy than average because of this commandment, but the blessings are not only physical but spiritual.

    • NCG says

      Look, dislike the man if you want, but just on the subject of religion, hardly anyone follows any religion all the way down the line, and I might think worse of them if they did. People should make their own decisions and not hide behind a text. We are all going to have to account for *ourselves,* imho.

  7. ted says

    Those strange loans Mitt got in 1990 to save Bain & Co. don’t bother you? The loans he only paid back 30 cents on the dollar, stiffing taxpayers for $10 million?

    http://www.economist.com/blogs/democracyinamerica/2012/08/mitt-romney-and-bain-company

    “How had Romney scored such a favorable deal at the FDIC’s expense? It didn’t hurt that he had close ties to the agency – the kind of “crony capitalism” he now decries. A month before he closed the 1991 loan agreement, Romney promoted a former FDIC bank examiner to become a senior executive at Bain. He also had pull at the top: FDIC chairman Bill Seidman, who had served as finance chair for Romney’s father when he ran for president in 1968.”

  8. hypocritecentral says

    The hilarious thing is that most of the readers and all the authors (save maybe Keith?) want to see legalized pot but they are oh so disgusted at Big Tobacco!

    • Steve Crickmore says

      Hilarious to you maybe, but secondhand smoke causes enormous damage to your children and our’s. Second-hand smoke causes more than 600,000 premature deaths per year of which, children accounted for about 30% of the deaths attributable to second-hand smoke. I have worked for Big Tobacco, unwillingly in uattributable contracted out consumer surveys, and I know they purposedly target kids as clients. That is where the money is for them, and creatures like Romney. Legalized pot probably doesn’t do one twentith of the damage as cigarettes do!

      • John Eleridge says

        Of course the Tobacco Companies are that sick. But why do you think MJ companies will be any better?

        The issue isn’t what’s worse – they are both not good for you, or society. Pot also causes car crashes. Tobacco does not.

    • NCG says

      You’re right about me on this! But, aren’t there nebulizers? I assumed if I ever became a potsmoker, I would use one of those. I thought they were better for your lungs.

  9. doretta says

    The constant reference to tobacco as legal is a red herring. Harold didn’t claim Bain did anything illegal. . He argues that they did something immoral. Slavery used to be legal. Was it moral because it was legal? Long before it was clear how harmful and addictive tobacco is, people were making loads of money from selling it. Those people worked to obscure the harm tobacco does, bought a lot of politicians and succeeded in keeping their product legal even after the harm became clear. I’m with Harold.

  10. Betsy says

    Megan, Ann, and the rest of you shills for your contemptible laughingstock of a “presidential candidate”: So far, I’ve managed, like most people, to keep the wolf from my door without resorting to selling addictive toxic cancer and heart disease causing substances. Since the wolf has been pretty damn close to the door at times, yeah, I agree with the writer of this post that not selling tobacco products to people is sort of a minimum standard necessary to claim moral decency.

    That’s about it.

  11. Steve Crickmore says

    Solicited by Mitt Romney, money from families closely connected with Salvadoran death squads funded the launch of Bain Capital in the 1980s, and he saved Bain & Co. by selling cancer sticks in Russia in the 1990′s. The perfect resume for a GOP presidential candidate for 2012, and he can disdain most of his fellow mortals who haven`t had the imagination or entrepreneurship, to see how much profit can be made on the misfortune of others.

    • Betsy says

      Fellows? Mortals? He sees them not as the first, and himself not as the second. But I won’t quibble with your excellent point.

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