An anonymous "family foundation" has paid for nearly 150 threatening voter fraud ads to go up around the Midwest, often in predominately black and Latino neighborhoods (the one above looms across the street from a housing project in Cleveland). The ads, 85 of which have appeared in Milwaukee and 60 of which are now around Cleveland and Columbus, read, "Voter fraud is a felony! Up to 3 1/2 years & $10,000 fine."
After we published nearly 1,000 pages of Bain Capital's confidential financial records—including audits revealing for the first time that Bain employed a potentially illegal tax dodge currently under investigation by the New York attorney general—we thought we might hear from the good folks at Mitt Romney's former private equity firm, perhaps asking us to take down the documents. Well, Bain finally got in touch yesterday. And they want to explore investing in Gawker Media.
According to the New York Times, New York State Attorney General Eric Schneiderman is investigating Bain Capital, along with several other major private equity firms, to see whether the firms used tax loopholes to avoid paying hundreds of millions in taxes. Schneiderman reportedly issued subpoenas to Bain Capital as well as Kohlberg Kravis Roberts & Company, TPG Capital, Sun Capital Partners, Apollo Global Management and Silver Lake Partners. The subpoenas seek "documents that would reveal whether they converted certain management fees collected from their investors into fund investments, which are taxed at a far lower rate than ordinary income."
Mitt Romney's $250 million fortune is largely a black hole: Aside from the meager and vague disclosures he has filed under federal and Massachusetts laws, and the two years of partial tax returns (one filed and another provisional) he has released, there is almost no data on precisely what his vast holdings consist of, or what vehicles he has used to escape taxes on his income. Gawker has obtained a massive cache of confidential financial documents that shed a great deal of light on those finances, and on the tax-dodging tricks available to the hyper-rich that he has used to keep his effective tax rate at roughly 13% over the last decade.
The new Obama ad "Steel" targets Mitt Romney's Bain Capital by focusing on a Kansas City steel mill bought by the private equity firm — the mill later went bankrupt.
The New York Times Magazine's cover story this week is about Edward Conard, a wealthy private equity titan and former business partner of Mitt Romney's, who has written a book arguing that income inequality is actually good for the middle and lower classes, because the promise of great wealth spurs more investing and risk-taking which eventually benefits all of society.
Mitt Romney has had five or six years to formulate his response to a full onslaught on his record as corporate efficiency dweeb at Bain Capital, and here's what he's come up with: YOU PEOPLE ARE JEALOUS. Stop it. Go away!
Well it's about time that these losers got around to knocking the dickens out of Mitt Romney, that great labor liquidator of the shareholder value revolution. Everyone, right and left, is pointing and laughing the sad galoot over this clip, in which he says he likes firing people. No, scratch that: He says he likes "being able to fire people." What does he really say?
Just five days ago we published a tacky old Bain Capital photo of Mitt Romney and his swanky private equity buddies playing with money, and wondered how long it would take for one of Romney's many enemies to put it to use, attackwise. And sure enough, guess what's included in today's widely-distributed DNC memo? Stern words for Eric Cantor and Mitch McConnell! Also, the Romney photo.
Conventional Valley wisdom: The chaos in the public stock markets won't affect private companies, right? Wrong. In August, LinkedIn had set plans to let employees sell some of their shares to investors. Interest in the company had been keen, given its stated plans to wait to IPO rather than sell out. But the stock-sale plan was conditioned on the Nasdaq index staying above a certain level. It has since fallen through that floor, meaning employees will no longer be able to sell their shares. And we hear Bain Capital, a major LinkedIn investor who's backing the stock-sales plan, has the right to walk away if the Nasdaq doesn't recover by mid-October.
♦ President Bush turned up outside the White House early this morning to urge lawmakers to pass the $700 billion bailout and a vote is expected later today. Bored today? The full text of the bailout is here. [NYT, WSJ]
♦ Citigroup has agreed to buy Wachovia in a deal brokerered by the FDIC. [Dealbook]
♦ The governments of Belgium, Luxembourg and the Netherlands have teamed up to bail out Fortis, one of Europe's largest banks. [WSJ, Bloomberg]
NBC Universal and two private equity firms, Bain Capital and the Blackstone Group, acquired the Weather Channel and Weather.com from Landmark Communications over the weekend for a rumored $3.5 billion. Yes, we're not shocked either that NBC figured out Weather Plus wasn't taking over the meteorological universe. [PaidContent]
Microsoft's Yahoo bid is not the only one in trouble. The $2.2 billion offer for 3Com made by the private-equity firm Bain Capital and Chinese telecommunications company Huawei Technologies is no longer on the table. The company has been unable to work out a compromise with the Committee on Foreign Investment in the United States, a federal panel which has the authority to recommend the White House block or alter terms of deals that involve national security. [AP]
And we thought that Congress was going to be the main stumbling block for 3Com's buyout by Bain Capital and Huawei. Shareholders are suing 3Com, its directors, a former director, Bain Capital, Huawei Technologies, and the Easter Bunny over the "insufficient" purchase price. Just shut up and take the money. No one else is going to buy your little has-been networking-equipment company. [AP]
3Com has agreed to be acquired by Bain Capital for about $2.2 billion in cash — a 44 percent premium over Thursday's closing price. Included in the deal is a minority stake in 3Com for Chinese network giant Huawei Technologies, which is getting control of H3C, the companies' joint venture. By shutting out Nortel, which also was interested in 3Com, Huawei prevents its Canadian rival from getting a foothold in its rapidly expanding home market. [WSJ]