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Mitt Romney's Bailout Bonanza: How He Made Millions From the Rescue of Detroit

Friday, 19 October 2012 09:58 By Amy Goodman, Democracy Now! | Interview and Video
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We turn now to a major new exposé on the cover of The Nation magazine called "Mitt Romney’s Bailout Bonanza: How He Made Millions from the Rescue of Detroit." Investigative reporter Greg Palast reveals how Republican presidential nominee Mitt Romney made some $15 million on the auto bailout and that three of Romney’s top donors made more than $4 billion for their hedge funds from the bailout. Palast’s report is part of a film-in-progress called "Romney’s Bailout Bonanza." Palast is the author of several books, including recently released New York Times bestseller, "Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps."

TRANSCRIPT:

AMY GOODMAN: We’re on the road in Minneapolis. Tonight we’ll be in Nevada City, California, and then we’re moving on tomorrow to Los Angeles. I’ll be speaking at the Immanuel Presbyterian Church tomorrow night at 8:00—at 7:00. And then on Saturday, we’re traveling through California. Check tour.democracynow.org.

But right now, we turn to a major new exposé on the cover of The Nation magazine called "Mitt Romney’s Bailout Bonanza: How He Made Millions from the Rescue of Detroit." Investigative reporter Greg Palast reveals how Republican presidential nominee Mitt Romney made at least $15 million on the auto bailout and that three of Romney’s top donors made more than $4 billion for their hedge funds from the bailout.

Also see: Greg Palast: Mitt Romney's Bailout Bonanza

Palast filed this report for Democracy Now!

GREG PALAST: Detroit, Motown, Motor City. In 2009, the auto industry’s collapse and bailouts filled the news.

MARK CARLSON: General Motors, the Detroit stalwart, once the world’s largest corporation, died today.

NEIL CAVUTO: Bailout bummer, the Obama administration—

JONATHAN KARL: "Bailout" is a dirty word these days.

BETTY LIU: Bailout of the auto industry.

UNIDENTIFIED REPORTER: All of the money that has been sunk into GM and Chrysler returned.

PRESIDENT BARACK OBAMA: Just over two months ago, I spoke with you in this same spot about the challenges facing our auto industry, and I laid out what needed to be done to save two of America’s most storied automakers: General Motors and Chrysler.

GREG PALAST: As part of a massive government bailout, U.S. taxpayers paid $12 billion to save auto parts maker Delphi Corporation. Out of that taxpayer money, three billionaires and their partners took in a profit of over $4 billion. One big winner, with a profit of over 4,000 percent, were the billionaires’ silent partners, Ann and Mitt Romney. The Romneys made at least $15 million, and as much as $115 million.

Our investigation began in Africa in the Congo. This is Greg Palast reporting. We are hunting for a vulture, a so-called vulture fund financier, this man, Paul Singer. Singer’s vulture fund seized $90 million out of foreign aid given the Congo, which could have been used to end a cholera epidemic. Singer’s vulture tactics are now outlawed in England and all over the world, but not in the U.S.A., certainly not here in Detroit, where we found Singer’s vulture fund feasting on the corpse of another victim, the once-world-leading Delco auto parts division of General Motors.

DELCO AD: Power that can’t get old before it’s sold. Delco dry charge battery, made by the Delco-Remy Division of General Motors.

GREG PALAST: As Delco’s biggest customers, GM and Chrysler, collapsed, Delco, now named Delphi, went bust. Down swooped the vultures. The vulture funds bought Delphi for just 67 cents a share. Bloated by $12 billion in taxpayer auto bailout subsidies, the shares blew up from 67 cents to $22 a share. The auto task force chief called it "extortion." Extortion paid big time. So far, Romney and partners have pocketed over $4 billion. Then the billionaires gave Romney a million dollars each for the Republican campaigns. Nevertheless, Romney accused Obama of conflicts.

MITT ROMNEY: This is serious conflict of interest. This ought to be a big story. And I don’t think there are—I think there are a number of people on the—among the president’s team that don’t want that story to get out. We want to make sure it did.

GREG PALAST: Romney said he was opposed to the bailout.

MITT ROMNEY: I wrote an op-ed in the paper, and I said, "Absolutely not. Don’t write a check for $50 billion."

GREG PALAST: But these documents reveal that a government bailout check was in fact cashed by none other than Ann Romney. It says that Ann Romney had a hunk of Mitt’s vast fortune in Elliott Management, Paul Elliott Singer’s vulture fund. Working our way between the limousines in front of his office, we wanted to ask Mr. Singer about his special financial deal with the Romneys. But he turned us down. The Romney campaign refuses to tell us exactly how much they made from the bailout, nor reveal their 2009 taxes.

ANN ROMNEY: We’ve given all you people need to know and understand about our financial situation and about how we live our life.

GREG PALAST: To cover up their payday and avoid taxes, the vulture funds have moved the headquarters of Delphi from Michigan to Jersey—not New Jersey, but the Isle of Jersey off the coast of France, a notorious tax haven.

Governor Romney wrote, "Let Detroit go bankrupt." And it did. Of the 25,000 UAW members at Delphi, every single one lost their job. Delphi once had 29 factories in the U.S., now just one. Today, GM still gets its parts from Delphi, shipped from the plants that the Romney hedge funds have moved to the People’s Republic of China.

For Democracy Now!, this is Greg Palast reporting.

AMY GOODMAN: Greg Palast’s exposé is part of a film-in-progress called Romney’s Bailout Bonanza. Greg joins us in New York, author of a number of books, including recently released New York Times bestseller, Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps. His piece is just out today in The Nation, called "Mitt Romney’s Bailout Bonanza: How He Made Millions from the Rescue of Detroit."

Greg Palast, welcome back to Democracy Now! So, lay it out for us.

GREG PALAST: Oh, it’s one of the creepiest stories I’ve investigated in a long time, Amy. Mitt Romney, through Ann Romney’s blind trust—not so blind, they could see exactly where the money was going—gave their money to Paul "The Vulture" Singer, a guy you and I have been following on Democracy Now! for five years. Singer, with two of his hedge fund buddies, bought up the auto parts division of General Motors for only 67 cents a share. They were able to turn 67 cents a share into $22 a share by threatening GM and the U.S. Treasury with a complete shutdown of the auto industry. They had complete control of all the steering wheels and steering columns of every car that was being made in America. GM would have been liquidated. They literally threatened to shut down GM. And so, they—the government simply allowed GM to pay them $12 billion. About half of that was straight from the U.S. Treasury in a takeover of Delphi’s pension fund.

Once they got the money—once they got the money, they eliminated 28 of 29 auto plants in the U.S. They moved—they eliminated every single job of every UAW member; 25,200 UAW members all lost their jobs. Almost every plant was then moved by the Romney group to China. Delphi is making a fortune today. So you have 25,000 workers who lost their jobs to China. Three hedge fund managers made at least $4 billion, $4.2 billion. And the Romneys have made at least 15, but the evidence suggests that it’s more like $115 million for the Romneys, about a 4,000 percent profit.

What we can’t get from them at this moment, this may be the reason why they are not releasing their 2009 taxes, because that would give us a better hint. Unfortunately, they’ve not only moved the company operations to China, but they’ve moved their incorporation of the auto parts division of General Motors from Troy, Michigan, to the Isle of Jersey in the Mediterranean Sea, which hides their taxes and also, of course, hides their accounts. So that—that’s the story.

AMY GOODMAN: Greg, how did you get this information?

GREG PALAST: Well, I’ve been, you know, tracking Paul "The Vulture" Singer and his hedge fund for five years, as you saw, for Democracy Now!, from the Congo to England to South America. And I was stunned, absolutely stunned, to find out that the Romneys had given what ABC called a vast chunk of their money to Elliott Management. But it was well hidden. It not only went through Ann Romney’s blind trust, but then the blind trust was put in a special limited liability partnership with Paul Singer, which they then hid their levels of investments. Plus, by putting it in Ann Romney’s name—and remember, every dime that Ann Romney has comes from her husband—by Mitt moving his money to Ann Romney, they didn’t have to declare exactly how much money they made here, only that it was more than a million. But we were able to calculate that it was at least $15 million, and more likely $115 million.

AMY GOODMAN: So, talk about Mitt Romney opposing—this very well-known position he’s had—opposing the auto bailout, and how that plays in here, Greg.

GREG PALAST: Well, two ways. And let’s bring in Paul Ryan, as well. Number one, Mitt Romney said, "Let Detroit go bankrupt." And everyone thought this was a great, principled position. And yeah, he wanted it to go bankrupt so that he could buy the auto parts division for literally pennies, 67 cents a share, then flip it for 30, 40 times that amount. In addition, don’t forget that this is TARP money. This is money that comes from the U.S. taxpayer.

And Paul "The Vulture" Singer became the number one donor also to a congressman named Paul Ryan. And it is, by the way, Singer, according to the Wall Street Journal, who forced Romney to accept Ryan as his running mate, in part because Paul Ryan, despite his speeches against TARP and against the bailouts, Paul Ryan voted for both the bank bailout and the auto bailout, very much enriching his number one donor. That’s—so that’s the politics of it, because also Romney has made Paul Singer a key economic adviser, and in addition, he’s considered the most important donor to the Mitt Romney campaign.

AMY GOODMAN: Now, if you can explain more who Paul Singer is and his significance in Republican politics?

GREG PALAST: Well, according to Fortune magazine and Forbes and the Wall Street Journal, he is considered probably the most important of Romney’s coterie of billionaires. He’s the original $1 million donor to the 37-billionaire PAC called Restore Our Future. He’s the guy who kind of signals all the other billionaires where to put their money. So, Singer is very, very important to Mitt Romney.

But most important is that Mitt Romney—Paul Singer, for five years, as we’ve been following him, has been using what are called "vulture tactics." He buys companies out of—he buys companies out of bankruptcy, he buys nations out of bankruptcy, and then threatens them, kind of—figures out a way to hold them ransom, as he did here with the auto parts, where he said, we’re going to literally withhold all the parts for the—for every automaker in America unless you pay me my ransom. This is how he operates.

His tactics are now illegal—actually, since our last broadcast, Amy, once it went out on BBC. Paul Singer’s tactics have been outlawed in England, all throughout Europe, South America, but not in the U.S.A., except, I should note—and this is very important, which may be why Singer has backed Romney, which is that the Obama administration, President Obama and Secretary of State Clinton, have gone to federal court asking the federal courts to put Paul Singer out of business, basically, by saying his vulture tactics are a threat to the world economy and in violation and opposing United States foreign policy. So, basically, Obama and Clinton want to put Singer out of business. And Romney—Romney, we don’t expect will, because Romney’s number one foreign policy adviser, should he get elected president, would be expected to be Dan Senor to take over as secretary of state. Dan Senor’s day job is working for Paul Singer.

AMY GOODMAN: And specifically, the auto bailout money that Paul Singer got?

GREG PALAST: Yes, he—he picked up—his hedge fund has so far picked up $1.29 billion. And you have to understand, that’s about 42 times what he paid for the Delphi division of General Motors. So, basically, this one guy and his hedge fund have earned over a billion dollars, and some of that has now been pieced off to Ann and Mitt Romney. That’s how they made the big cash.

AMY GOODMAN: Delphi Corporation, its role in outsourcing jobs to China, Greg Palast?

GREG PALAST: Well, basically, once the Romney group—that’s Singer, Romney and two other big hedge funds—three other big hedge funds—got a hold of Delphi, they were able to—they decided that—they have proudly said, "We do not have a single North American United Auto Workers member anymore." They’ve closed every plant and moved them to China.

It wasn’t supposed to be that way. The administration and General Motors cut a deal with Tom Gores, who is the owner of the Detroit Pistons. He’s a billionaire. He’s a Flint—a Flint boy like Michael Moore. And he was going to buy Delphi and keep at least half the jobs in Michigan and in the United States. But because of this—because of really extraordinary financial maneuvering, the Romney group was able to overturn the deal that had already been made with General Motors and with Gores and the Treasury to keep Delphi jobs in the United States. Once the of vulture pack took over, they said, "We’ve got our money. We’ve got our $12 billion from the U.S. government. See you later, guys." And they shut down every plant except for one. [inaudible]

AMY GOODMAN: I wanted to turn to a clip of Mitt Romney in the presidential debate.

MITT ROMNEY: And one thing that the—the president said, which I want to make sure that we understand, he said that I said we should take Detroit bankrupt, and—and that’s right. My plan was to have the company go through bankruptcy like 7-Eleven did and Macy’s and—and Continental Airlines and come out stronger. And—and I know he keeps saying, "You wanted to take Detroit bankrupt." Well, the president took Detroit bankrupt. You took General Motors bankrupt. You took Chrysler bankrupt. So, when you say that I wanted to take the auto industry bankrupt, you actually did. And—and I think it’s important to know that that was a process that was necessary to get those companies back on their feet, so they could start hiring more people. That was precisely what I recommended and ultimately what happened.

AMY GOODMAN: That was Mitt Romney on Tuesday at the presidential debate in Hofstra. Greg Palast?

GREG PALAST: Well, he left out something. He’s—basically, Romney’s taking credit for the fact that the administration put in billions of dollars of funding to save the jobs at General Motors. They also put in billions of dollars of funding to save the jobs at General Motors’ number one supplier, the Delphi—Delphi, their old Delco division. The thing is, is that what he didn’t say is that Mitt—Mitt Romney didn’t say that he and his own co-investors, in a partnership, overturned—overturned the deal that the U.S. government had made to save that auto parts division, and shut it down. They bought it out, shut it down, moved it to China. Now, Romney seemed to have left that one out of the mix. Once again, yes, the auto—Delphi was put through bankruptcy, but unlike General Motors, because of the Romney group’s actions, every single UAW job was lost.

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