Mitt Romney may not "apologize" for his success in business, but more importantly, you'll also likely never hear him say "thanks" to the American people for the Federal bailout of Bain Capital.

Via:

The trouble began in 1984, when Bain & Company spun off Bain Capital to engage in leveraged buyouts and put Romney in charge of the new operation. To free up money to invest in the new business, founder Bill Bain and his partners cashed out much of their stock in the consulting firm – leaving it saddled with about $200 million in debt. (Romney, though not a founder, reportedly profited from the deal.) "People will tell you that Bill raped the place clean, was greedy, didn't know when to stop," a former Bain consultant later conceded. "Did they take too much out of the firm? You bet."

The FDIC documents make clear what happened next: "Soon after the founders sold their equity," analysts reported, "business began to drop off." First came scandal: In the late 1980s, a Bain consultant became a key figure in an illegal stock manipulation scheme in London. The firm's reputation took a hit, and it fired 10 percent of its consulting force. By the time the 1989 recession began, Bain & Company found itself going broke fast. Cash flows weren't enough to service the debt imposed by the founders, and the firm could barely make payroll. In a panic, Bill Bain tapped Romney, his longtime protégé, to take the reins.
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In fact, Romney had a direct stake in the survival of Bain & Company: He had been working to build the Bain brand his entire career, and felt he had to save the firm at all costs. After all, Bain sold top-dollar strategic advice to big businesses about how to protect themselves from going bust. If Bain & Company went bankrupt, recalls the Romney deputy, "anyone associated with them would have looked clownish." Indeed, when a banker from Goldman Sachs urged Bain to consider bankruptcy as the obvious solution to the firm's woes, Romney's desperation began to show. He flatly refused to discuss it – and in the ensuing argument, one witness says, Romney almost ended up in a brawl when the Goldman banker advised him to "go f*ck yourself." For the sake of Romney's career and fortune, bankruptcy was simply not an option – no matter who got screwed in the process.

It's no wonder Romney wouldn't want to discuss the details of the bailout during a campaign for office. And then when it came to "negotiating" repayment of the bailout, Romney threatened use of a loophole:

In a letter dated March 23rd, 1993, Romney reassured creditors that his latest scheme would return Bain & Company to "long-term financial stability." That same month, Romney once again threatened to "pay out maximum bonus distributions" to top executives unless much of Bain's debt was erased.

In the end, the government surrendered. At the time, The Boston Globe cited bankers dismissing the bailout as "relatively routine" – but the federal documents reveal it was anything but. The FDIC agreed to accept nearly $5 million in cash to retire $15 million in Bain's debt – an immediate government bailout of $10 million. All told, the FDIC estimated it would recoup just $14 million of the $30 million that Romney's firm owed the government.

Sounds more like blackmail than a negotiation, doesn't it?

As if this bailout doesn't sound crooked enough, Bain is now under investigation for tax evasion. Via Think Progress:

Since July, New York Attorney General Eric Schneiderman has been issuing subpoenas to private equity firms including Bain, which he believes intentionally changed management fees into capital gains as a way of hanging onto millions of dollars that would have otherwise been taxed at a higher rate. Bain alone is estimated to have saved “more than $200 million in federal income taxes and more than $20 million in Medicare taxes.” It is unclear whether the tax strategy was used while Romney was at the helm of the company, but the Times reports that Romney is still making money on funds that are using the method in question.

While an attorney for Romney insists that he “can confirm that neither he nor the trust has ever done this, whether before or after he(Romney) retired from Bain Capital," it would certainly be nice, for the sake of transparency, if Romney would release his tax returns.

Voting Rights Act: The State of Section 5

by Suevon Lee ProPublica, Aug. 30, 2012,

Aug. 30: This post has been updated.

A single provision of the Voting Rights Act of 1965 has been playing a key role on the election front this year. Section 5 has blocked photo voter-ID laws, prohibited reduced early-voting periods in parts of Florida and just Tuesday barred new redistricting maps in Texas.

It's the reason South Carolina is in federal court this week to try to convince a three-judge panel its photo voter-ID law will not disenfranchise minorities. It's the reason that Texas went to trial on the same issue last month — and on Thursday, lost.

Not surprisingly, then, Section 5 is increasingly the target of attack by those who say it is outdated, discriminatory against Southern states and unconstitutional.

Under the provision, certain states and localities with a history of anti-minority election practices must obtain federal approval or "preclearance" before making changes to voting laws. In present day, that requirement is burdensome, "needlessly aggressive" and based on outdated coverage criteria, two petitions filed in July with the U.S. Supreme Court argue.

Section 5 applies to nine states — Texas, South Carolina, Arizona, Georgia, Louisiana, Mississippi, Alabama, Virginia and Alaska — and currently to parts of Florida, California, New York, North Carolina, South Dakota, Michigan and New Hampshire. The original coverage formula looked at whether states imposed unfair devices like literacy tests in November 1964, whether less than 50 percent of the voting-age population was registered to vote as of that date, or if less than 50 percent of eligible voters voted in the November 1964 presidential election. In 1975, the formula expanded to include jurisdictions that provided election materials only in English when members of a language minority made up more than 5 percent of voting-age citizens.

Momentum is building at the highest levels to narrow or even eliminate this provision. In a 2009 majority opinion to a Section 5 challenge from Northwest Austin Municipal Utility District No. 1 in Texas, U.S. Chief Justice John Roberts wrote that preclearance and the coverage formula "raise serious constitutional questions," though the justices didn't settle them at the time. In January, in a separate concurrence to the judgment in the Texas redistricting case, Justice Clarence Thomas stated that Section 5 is unconstitutional (for more on how that case reached the Supreme Court, see our previous explainer).

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The famed award-winning investigative reporting team of Donald Barlett and James Steele have just published a new book, "The Betrayal of the American Dream," a followup to their landmark bestseller, "America: What Went Wrong?" As Republicans and Democrats continue disputing who should bear the brunt of the tax burden, Barlett and Steele argue that America’s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite. Barlett and Steele have worked together for more than 40 years, sharing two Pulitzer Prizes and two National Magazine Awards. The duo join Amy Goodman of DemocracyNow! to discuss the assault on the middle class, the great tax heist, deregulation, the outsourcing of U.S. jobs by companies like Boeing and Apple, and the end of retirement. "People are going to have to work forever, and yet what are those jobs going to be? What are they going to pay? And it also puts pressure then on people coming into the workforce. How are they going to get a job if people are having to work between 65 and 75 years old?," Steele says. The duo also discuss their past reporting on the 2002 Olympics in Salt Lake City, headed by the Republican presidential candidate, Mitt Romney, and note he headed "an Olympic committee where that entire operation raided the federal Treasury like no other Olympics in history."

Full transcript here.

Federal Reserve Chairman Ben S. Bernanke spoke dire words during a hearing before the Senate Banking Committee on Tuesday. Bernanke told senators that “economic activity appears to have decelerated somewhat” and that “the reduction in the unemployment rate seems likely to be frustratingly slow.” He did not say whether the Federal Reserve plans to do more to boost growth. He also warned lawmakers that federal spending cuts and tax hikes that automatically take effect in 2013 if Congress does not act to extend the Bush-era tax cuts, is the biggest threat to the nation’s economy. He urged lawmakers to “Do no harm.”

It sounds like CEO Jamie Dimon has some explaining to do...

Reuters:

A U.S. judge has ordered JPMorgan Chase to explain why the court should not force the bank to turn over 25 internal emails demanded as part of an investigation into whether it manipulated electricity markets in California and the Midwest.

The Federal Energy Regulatory Commission (FERC) filed a petition in federal court in Washington on Monday asking the court to order the bank to show cause as to why it would not comply with a subpoena issued by the commission as part of its investigation into the bank's power trading.

On Thursday, U.S. District Judge Colleen Kollar-Kotelly gave the bank until July 13 to submit an explanation as to why the court should not enforce FERC's subpoenas. JPMorgan has asserted the emails are protected by the attorney-client privilege.

I wonder who is going to play Ken Lay in this remake of the Enron scandal?

As JPMorgan announced a $2 billion trading loss, members of Congress called for federal regulators to scrutinize and tighten banking rules and trades. New rules are being drafted as part of the Dodd-Frank bill that prevent federal banks from making investments that might put taxpayers at risk.

“The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today,” said Democratic Rep. Barney Frank.

After the creation of the Volcker Rule, a regulatory law meant to prevent overly risky trading, JPMorgan Chase sent lobbyists to Washington to argue for loopholes that would allow for trades much like those that led to a $2 billion loss announced by the bank on Friday. Bank chief executive Jamie Dimon and other members of upper management paid regular visits to lawmakers to argue that, while they thought some parts of the rule were useful, others would hurt the bank’s ability to hedge against risk. The result, said Senator Carl Levin, was a “big enough loophole that a Mack truck could drive right through it.”