By Farron Cousins
November 1st, 2012 8:00am
Mitt Romney has tried desperately over the last year to distance himself from his time at Bain Capital. While he isn’t shy about touting his business experience, and how that experience will make him a better commander in chief than Barack Obama, he has managed to omit the parts of his past where he would buy up profitable companies and then ship American jobs overseas to places like China and India. That was the M.O. of Bain Capital under Mitt Romney. Mike Papantonio recently interviewed progressive radio host and writer Richard “R.J.” Eskow about Romney’s record at Bain, and below is a transcript of that interview.
Mike: We're talking about the very crazy, very dangerous Mitt Romney. Every day it's more evident. It's a man not in control of his brain or his mouth and unfortunately, we don't want to put in control of a bomb.
There’s more. Parts of the Mitt Romney story come out every day. Mitt Romney spent a lot of time trying to run away from his record, for example, at Bain Capital. That was a good move for him. It seems likely every week that there's a new story about corruption, incompetence, greed. It shows us the real character of this guy who wants to be involved with international policy in places like the Middle East on days like today. Really?
This week is no exception. Stories emerge telling us how Bain Capital's been hustling the healthcare industry, driving up costs for everybody in America. Richard Eskow is a senior fellow, campaigned for America's future. He's the host of weekly radio show The Breakdown. Richard, tell me this story. It's a fascinating story because we miss parts of stories like this all the time, don't we?
Richard: We do and it gets overlooked. While we've got politicians out there like Mitt Romney and Paul Ryan telling us that we can't afford to continue providing Medicare to seniors or Medicaid to poor people, Bain Capital actually has a very consistent record of being pioneers in a greed-driven for-profit healthcare system that really adds to those costs exponentially.
Mike: Let me set up just a little bit for time purposes. When you leverage buy-out, when you go into a company and you leverage the company, what you do, what Bain did, is they’d go in; they get more loans than the company could ever handle–$607 million worth of loans. They would pay their percentage of being that capital investor but they wouldn't pay the other investors but they would pay the management team. They'd pay the Bain team. Then they would leave that corporation in such bad shape they had to something to raise money. What would they do?
Richard: What they do is that so much money was borrowed to deal with the Bain people that it really put them under incredible pressure to jack-up their revenues which they would do by, for example, tricking doctors into ordering unnecessary Medicare procedures, which one of the CEOs that Romney and his team picked wound up being convicted for doing, being convicted of Medicare fraud. Another team that, from all we can tell, Romney picked to run a drug store chain, they were convicted of investor fraud, and also for fraud in the State of New Jersey for selling things like out-of-date baby formula, out-of-date medications or prescriptions. When you put people under that kind of financial pressure they get desperate to cheat, bend the rules, do whatever they have to do to make their numbers. That's the real Romney Care.
Mike: R.J., I can't disclose too much what I want to tell you. I want tell you how accurate you are, how you hit this. Bobby Kennedy and I have been involved in a campaign; it's an anti-fraud campaign with the Whistle Blower Statute. What we found is we started an ad campaign all over America saying if you want to report fraud, call us. We're doing stories, we're doing follow-up on them. You know where most of the stories are coming from? They're coming from the healthcare industry.
Richard: I'm not surprised.
Mike: We see bundling, we see unbundling, we see … as you point out in your story, it's very interesting. We've seen very similar things. You talk about where they take a red piece of cellophane and put it over the end of a flashlight and then they say this is some kind of special equipment, ultra-ray equipment, and they charge $3,000 for the flashlight. That's the kind of stuff we're seeing right now. This is what you've been talking about for a long time R.J..
Richard: I've worked in this area. I've helped track down some of this fraud. When you have a guy running for President whose entire career is based on pushing people to do the wrong thing, giving them the incentive to do the wrong thing, and then looking shocked when they turn around and do the wrong thing … look, these are people that he hired. These are people that he put into place. These are deals that he set up. He's just a representative of a whole broken system. I'm not at all surprised you're finding it right and left because Romney Care, for-profit healthcare is the reason why we have much more expensive health system than any other developed country and cover far fewer people and offer them far less. It's a broken system.
Mike: What Bain would do, they would find a company, they would say, “We want to do a hostile takeover”, basically. Leverage buy-out, it was always a hostile setting. They'd go in. They would fire everybody they needed to fire. They would sell off everything they could sell off, whether machines, cars, copper out of the wall, whatever it was. Then they would go to the bank and say, “Look, give us $700 million. Leverage us $700 million”. They would go to their friends. They would leverage $700 million, then they would pay themselves. It might be $20 million, $30 million, $40 million right up front. They would leave the company in a position to where bankruptcy was inevitable, had to take place, there was no way you could pull it out. Taxpayers would then come in and have to pay for that. One of their big focuses was healthcare, wasn't it?
Richard: Yes. Mike, it's not just that the taxpayers have to rescue the bailed out company, your health plan and mine, Medicare, Medicaid … these are only the cases we know about. This overbilling goes on every day; this cheating goes on every day. They're creating part of the system that almost guarantees it's going to take place because that's what desperate people do when they're trying to beat the numbers the next guy’s getting.
Mike: Right now what we have … there's another part to it and you picked it up in your story just like we had, just like Ed has so many times. Every time Ed talks about this story, the idea of, “Well, I left Bain Capital in 1999.” When you follow these stories that you're talking about, clearly, he didn't. He was making money. He was listing himself as a CEO. He was saying he was the sole shareholder for three years after 1999. Now, as we’ve said so many times, he was either lying to the Feds with his SEC 10K, which is fraud. People go to prison for that Mitt.
Mike: Mr. Mitt, if you're listening or any of your pals are listening, people go to prison for that. He was either lying there or he's lying to the American public right now because he's so embarrassed about stories like the one you're telling where he goes into a company like CRC. Tell us the CRC massive debt story so we can understand how he takes money from all of us and puts it in his pocket.
Richard: CRC is a horror story because there you're talking about an organization that was supposed to be, among other things, treating kids. You're talking about leveraging a lot of money for the treatment of kids with problems. Horrible things happened because they were really trying to leverage as much money out of it as they could.
Mike: By the way, I can't even count the number of times they've been sued. CRCs been sued …
Richard: They've been sued over and over again for torturing kids. I mean, the details are horrifying.
Mike: Yes, they are.
Richard: Kids forced to wear clothes soaked in their own urine as punishment because they weren't allowed to change their clothes or go to the bathroom, and just torture and graphic … children 14, 15-years-old committing suicide and this company going out and convincing parents that they could solve their son's or daughter's problem.
Mike: R.J., Mitt knows exactly what goes on there. He knows about the lawsuits. Even though the lawsuits have been hidden from the public, they've been hidden, literally. You have … the lawyers that settle the cases are not allowed to talk about it. The judges seal the records to where we don't see but we know what's happened. They've leveraged the company. They've de-staffed, understaffed, undertrained, they've put any bumpkin in there that'll fill a warm body and they have them taking care of kids that are in such critical, emotional … having such critically, emotional problems that the kids are committing suicide. They're doing the things that you're talking about right now, right as we speak. CRC is alive and well, isn't it?
Richard: Yes. It was put ….
Mike: I don't know if it's well. It’s alive.
Richard: They'll hire some minimum wage, untrained person. There was a case where they didn't see the warning signs of impending death in a teenager because they were just minimum wage kids themselves. Then that child died. Again, settled out … details not available. It's a horror story. They'll do what they have to do to make a buck, to cut corners because that's the system they represent.
Mike: R.J. Eskow, great work. I mean great work.
Richard: Thanks, man.
Mike: I'm just really impressed with this story because I see it firsthand. We handle Whistleblower cases. We handle people who tell these stories. They call our offices from all over the country. They tell us these stories. You know what? Your story nailed it. Your story is one of the most accurate … it just unfolds exactly like the stories we're told all the time, mostly from the healthcare industry where these 'whistleblowers' come forth and they say, “Look, this is a company that's stealing from the government and so … very important. Keep this work up, okay?
Farron Cousins is the executive editor of The Trial Lawyer Magazine, a contributing writer at DeSmogBlog, and the producer of Ring of Fire Radio. Follow him on Twitter @farronbalanced.