The Real Romney (18 page)

I
n the fall of 1990, Exponent II published in its journal an unsigned essay by a married woman who, having already borne five children, had found herself some years earlier facing an unplanned sixth pregnancy. She couldn’t bear the thought of another child and was contemplating abortion. But the Mormon church makes few exceptions in forbidding women to end a pregnancy. Church leaders have said that abortion can be justified in cases of rape or incest, when the health of the mother is seriously threatened, or when the fetus will surely not survive beyond birth. However, even those circumstances “do not automatically justify an abortion,” according to church policy.

The woman feared excommunication. She had come to love the church and couldn’t bear the thought of losing it, she said. It was her whole life. Then her doctors discovered she had a serious blood clot in her pelvis. She thought initially that this would be her way out—of course she would have to get an abortion. But the doctors, she said, ultimately told her that, with some risk to her life, she might be able to deliver a full-term baby, whose chance of survival they put at 50 percent. One day in the hospital, her bishop—later identified as Romney, though she did not name him in the piece—paid her a visit. He told her about his nephew who had Down syndrome and what a blessing it had turned out to be for their family. “As your bishop,” she said he told her, “my concern is with the child.” The woman wrote, “Here I—a baptized, endowed, dedicated worker, and tithe-payer in the church—lay helpless, hurt, and frightened, trying to maintain my psychological equilibrium, and his concern was for the eight-week possibility in my uterus—not for me!”

Romney would later contend that he couldn’t recall the incident, saying, “I don’t have any memory of what she is referring to, although I certainly can’t say it could not have been me.” Romney acknowledged having counseled Mormon women not to have abortions except in exceptional cases, in accordance with church rules. The woman told Romney, she wrote, that her stake president, a doctor, had already told her, “Of course, you should have this abortion and then recover from the blood clot and take care of the healthy children you already have.” Romney, she said, fired back, “I don’t believe you. He wouldn’t say that. I’m going to call him.” And then he left. The woman said that she went on to have the abortion and never regretted it. “What I do feel bad about,” she wrote, “is that at a time when I would have appreciated nurturing and support from spiritual leaders and friends, I got judgment, criticism, prejudicial advice, and rejection.”

One woman who had been active in the Exponent II organization was Judy Dushku, a longtime scholar of global politics at Suffolk University in Boston. At one point while Romney was stake president, Dushku wanted to visit the temple outside Washington to take out endowments, a sacred rite that commits Mormons to a lifetime of faithfulness to the church. She had never entered a temple before and was thrilled at the chance to affirm her dedication to a faith she’d grown up with and grown to love. Earlier in her life, temples had been off-limits to Mormons who, like Dushku, were married to non-Mormons. Now that rule had changed, and she was eager to go. But first she needed permission from her bishop and stake president.

After what she described as a “lovely interview” with her bishop and after speaking with one of Romney’s counselors, she went to see Romney. She wasn’t sure what to expect. Despite Romney’s willingness to allow some changes in 1993, he and Dushku had clashed over the church’s treatment of women. “He says something like ‘I suspect if you’ve gotten through both of the interviews, there’s nothing I can do to keep you from going to the temple,’ ” Dushku recalled. “I said, ‘Well, why would you want to keep me from going to the temple?’ ” Romney’s answer, Dushku said, was biting. “He said, ‘Well, Judy, I just don’t understand why you stay in the church.’ ” She asked him whether he wanted her to really answer that question. “And he said, ‘No, actually, I don’t understand it, but I also don’t care. I don’t care why you do. But I can tell you one thing: You’re not my kind of Mormon.’ ” With that, Dushku said, he dismissively signed her recommendation to visit the temple and let her go. Dushku was deeply hurt. Though she and Romney had had their differences, he was still her spiritual leader. She had hoped he would be excited at her yearning to visit the temple. “I’m coming to you as a member of the church, essentially expecting you to say, ‘I’m happy for you,’ ” Dushku said. Instead, “I just felt kicked in the stomach.”

T
he world map hung at the church’s Boston branch neatly captured the growing diversity within the faith. Bright stars marked the countries from which branch members hailed: Haiti, Nigeria, Mexico, Lebanon, and many others. These immigrants were injecting fresh energy into Mormonism and remaking its face. They were also posing new tests for local church leaders. In his roughly eight years as Boston stake president, Romney oversaw a dizzying expansion. In the past, most area Mormons had been white and living in the suburbs. But the church had begun a major push to recruit new members from immigrant communities in urban enclaves in and around Boston. This had exposed Romney and other church leaders to poverty, lifestyles, and cultural traditions with which they’d had little experience. “It has been a great challenge to local members to provide leadership and support to begin six new branches in this stake in the past seven years,” Romney said in 1991. “But it has also been a great source of joy to see so many people join the church and see them progress in the Gospel.”

Romney and other Mormon officials made a conscious effort to take the church to the people, instead of letting the people come to the church. In the cities they created so-called storefront branches dedicated to certain nationalities and languages. Missionaries worked with Laotians, Cambodians, Portuguese- and Spanish-speakers, Chinese, Haitians, and others. Area wards and branches became a potpourri of world cultures. “Love those people,” Romney told Keith Knighton in calling him to be president of the Boston branch in the late 1980s. “Just simply love them.” David Gillette, who ran the Boston mission program in the early 1990s, worked closely with Romney and other stake leaders to bring new faces into the church. From 1991 to 1994, Gillette said, they baptized some 1,600 new members. “We taught in seven different languages.” A whole new stake had to be created to account for all the newcomers. Though Gillette’s missionaries were the ones baptizing Mormon converts, Romney played a major supporting role in establishing new congregations, figuring out where they would meet and how to pair them with more established local wards and branches. Because he had learned French on his own mission, he was also able to personally counsel many Haitians, both in Boston and at suburban meetinghouses. He would sprinkle in some French, too, when regaling missionaries and area congregations with stories from his two and a half years in France.

It was fitting that the Boston area, which had helped spread Mormonism in its infancy in the mid–nineteenth century, was again becoming a source of growth and change for the faith. “You feel humbled by the character of great men and women who walked here 150 years ago as the church was starting,” Romney said during his stake presidency. “We see it starting over and over again as each brother and sister finds the truth and is baptized.”

If Romney’s Mormon mission in France had deepened his connection to the faith his family had helped establish, his leadership in the Boston church, which lasted until 1994, gave him the chance to apply it, to put its teachings into practice, and to bring its spiritual message into new quarters. In time, more secular leadership demands, in business, sport, and politics, would command ever greater shares of his attention. But Mitt Romney’s faith and family would remain two unshakable pillars in his life. “To understand my faith, people should look at me and my home and how we live,” he would say years later. “What my church teaches is evidenced by what I have become, and what my family has become.”

[ Six ]

The Moneymaker

I never actually ran one of our investments. That was left to management.

—MITT ROMNEY ON HIS WORK AT BAIN CAPITAL

B
y the time Mitt Romney walked into the Faneuil Hall offices of his mentor and boss, Bill Bain, in the spring of 1983, the thirty-six-year-old was already a business consulting star, coveted by clients for his analytical cool. He was, as people had said of him since childhood, mature beyond his years and organized to a fault. Everything he took on was thought through in advance, down to the smallest detail; he was rarely taken by surprise. This day, however, would be an exception. Bain, the founder of Bain & Company and a legendary figure in the consulting trade, had a stunning proposition: he was prepared to entrust an entirely new venture to the striking young man seated before him.

From the moment they’d first met, Bill Bain had seen something special, something he knew in Mitt Romney. Indeed, he had seen
someone
he knew when he interviewed Romney for a job in 1977: George Romney. “I remember him [George] as president of American Motors when he was fighting the gas guzzlers and making funny ads. . . . So when I saw Mitt, I instantly saw George Romney. He doesn’t look exactly like his dad did, but he very strongly resembles his father.” Beyond appearances, Mitt had an air of great promise about him. He seemed brilliant but not cocky. All of the partners were impressed, and some were jealous. More than one partner told Bain, “This guy is going to be president of the United States someday.”

Bain had hired Romney away from the Boston Consulting Group, after a former colleague of Bain’s at BCG had told him, “I don’t believe you have anybody better than he is.” During his interview with Bain, Romney had posed a series of smart questions, including this one: with all of his success at BCG, Romney asked Bain, how had he found the nerve to leave? “It was a flattering question,” Bain said. “Mitt had a presence so that you took him seriously, but he acted as if he took me very seriously.”

They had come to BCG by very different paths: Romney, a child of privilege, had been heavily recruited as a graduate of Harvard’s law and business schools; Bain had scraped his way up from humbler roots in Tennessee, and although he would retain a trace of his down-home accent, his bearing was patrician and intensely competitive. Before Bain had bolted to form his own firm in 1973, he had been seen as the heir apparent at BCG. He had taken with him several colleagues and some of his prime clients. He also carried with him an idea, the seed from which his namesake firm would grow.

The Bain Way, as it became known, was intensely analytical and data-driven, a quality it shared with some other firms’ methods. But Bill Bain had come up with the idea of working for just one client per industry and devoting Bain & Company entirely to that company, with a strict vow of confidentiality. As a result, the companies shared more information, and consultants could plow to greater depth. Bain thought the value of his firm’s advice could be maximized by sticking with clients, guiding restructuring plans from the page of a consultant’s report to the executive suite and the factory floor. It meant actively seeking out relationships with CEOs and mastering the projects that mattered to them. Success would be measured by the improved performance of the business. It doesn’t sound like a revolutionary notion, but in many ways it was.

From the start Romney was perfectly adapted to the Bain Way and became a devoted disciple. Patient analysis and attention to nuance were what drove him. It took a healthy ego to go into a business and tell an owner how to run his own firm better, and most clients lauded Romney’s efforts. For six years, he delved into numerous unfamiliar companies, learned what made them work, scoped out the competition, and then presented his findings. He was successful enough, swiftly enough, that he could have taken his talents to any consulting firm or perhaps risen to the top of Bain & Company. An increasing number of clients preferred Romney over more senior partners. He was plainly a star, and Bain treated him as a kind of prince regent at the firm, a favored son. Just the man for the big move he now had in mind.

And so Bain made his pitch. As the two men talked in his office, just beyond the nearby marketplace of shops and restaurants teeming with tourists, Bain laid out a surprising vision for Romney’s future—one that could make Romney and his partners a lot of money. Up to that point, Bain & Company could only watch its clients prosper from a distance, taking handsome fees but not directly sharing in profits. Bain’s epiphany was that he would create a new enterprise that would invest in companies and share in their growth, rather than just advise them.

Starting almost immediately, Bain proposed, Romney would become the head of a new company to be called Bain Capital. With seed money from Bill Bain and other partners at the consulting firm, Bain Capital would raise tens of millions of dollars, invest in start-ups and troubled businesses, apply Bain’s brand of management advice, and then resell the revitalized companies or sell their shares to the public at a profit. It was a risky leap, but Bain was convinced that it would work—and that Romney, who was as prudent as he was ambitious, would be the ideal leader. It sounded exciting, daring, new. It would be Romney’s first chance to run his own firm and, potentially, to make a killing. It was an offer few young men in a hurry could refuse.

Yet Romney stunned his boss by doing just that. He saw the opportunity, of course, but he also saw risks. First, he felt comfortable in his life. He already had a great job and had five young sons at home. Second, he and the partners in the new firm would be expected to contribute significantly to the investment fund, and thus, if deals went south, they could lose their own money. Romney explained to Bain that he didn’t want to risk his position, earnings, and reputation on an experiment. He found the offer appealing but didn’t want to make the decision in a “light or flippant manner.” So Bain sweetened the pot. He guaranteed that if the experiment failed, Romney would get his old job and salary back, plus any raises he would have earned during his absence. Still, Romney worried about the impact on his reputation if he proved unable to do the job. Again the pot was sweetened. Bain promised that, if necessary, he would craft a cover story saying that Romney’s return to Bain & Company was needed because of his value as a consultant. “So,” Bain explained, “there was no professional or financial risk.” This time Romney said yes.

Years later, when Romney launched his 2012 campaign, he revealed none of the calculation involved in his decision. His description of how he began the work that would earn him hundreds of millions of dollars was almost quaint. “I left a steady job to join with some friends to start a business,” Romney said. “It had been a dream of mine to try and build a business from the ground up. We started in a small office.” But this start was nothing like that of the typical small business. It was a nearly risk-free opportunity with substantial financial backing—and a lucrative fallback plan in case of failure. And he had the security of knowing that he would still report to Bain and have offices just down the hall from his mentor.

Just as Romney took the reins, the entire Bain operation moved from its funky surroundings at Faneuil Hall, where the younger partners had enjoyed the hustle and bustle of the marketplace and the buildings with exposed brick and pipes, to a newly opened office tower at Copley Place in Boston’s Back Bay. Crammed into a sterile suite on the seventh floor, with metal desks and outdated chairs, the partners shared a small room and Romney had his own office. The consulting business of Bain & Company was at one end of the hall, and the spin-off, Bain Capital, was at the other. The setting was businesslike and spare, and that suited Romney. He struck some of his partners as being uncomfortable amid crowds, ill at ease when riding an elevator with everyday shoppers. He was at home in the conference room, free of distractions. An early riser, he was usually the first in the office and often forgot to eat lunch. He was ruthlessly efficient with his time, both to get the work done at the office and to ensure that he could make it to church activities and his kids’ athletic events. If he took a briefcase home with him, he said, he left it in the car.

Romney, fully in charge, searched for partners who fit his comfort zone. He promised his new hires that they would all be key players, with every major decision hashed out openly in meetings. Romney once described his style as a two-step process. One step was to “wallow in the data,” following the “Bain Way” of deep analysis. Then he encouraged vigorous debate: “Get people of different background and experience who disagree with each other and are willing to debate and argue.” He was, in a sense, replicating the way he had once dissected cases with his fellow students at Harvard Business School. In business, the method often worked well. Later, in politics, Romney would find that the model didn’t fit so neatly.

Most of Romney’s hires were of a certain type: they were spreadsheet geeks ranking at the top of their class, often alumni of Stanford, where Romney had spent an undergraduate year, or Harvard. Though Bain & Company was a much-sought-after workplace in the 1980s, Bain Capital was little known and risky. Some of Romney’s recruits were attracted by the pace of life in a relatively provincial city like Boston and passed over glamorous jobs in New York City or on the West Coast. One former partner described the group as a cast of brilliant, socially awkward young men—and they were all men—anxious to prove that they were just as worthy as peers who had gone to big Wall Street firms. Bob White and Josh Bekenstein were hired by Bain & Company out of Harvard Business School, and Geoffrey Rehnert came from Stanford Law School. Romney was only thirty-seven when he took the reins of Bain Capital, and many of his new employees were a decade younger.

Robert Gay came by a different route. Gay, one of the few Bain employees who shared Romney’s Mormon religion, worked for a Wall Street firm but had become disgusted by deals being done largely for big fees, whether merited or not, and by the job losses or factory closures that often followed mergers and acquisitions. Afraid that he would become the kind of person he “despised,” Gay leapt at a chance to become one of Romney’s partners. Financially, it made “no sense,” he said later. Bain was a fraction of the size of Wall Street firms, with fifteen employees and only a handful of deals completed. But Gay was convinced that Romney would enable him to exercise much more “influence for good” at Bain than he could elsewhere. So he took a pay cut and signed on. Gay and the other partners had one thing in common: they were utterly loyal to Romney, and that loyalty would only grow as they all grew rich together.

Thus began Romney’s fifteen-year odyssey at Bain Capital. Boasting about those years when running for senator, governor, or president, Romney would usually talk about how he had helped create jobs at new or underperforming companies and say that he learned how jobs and businesses come and go. He’d typically mention a few well-known companies in which he and his partners had invested, such as Staples. But the full story of his years at Bain Capital is far more complicated and has rarely been closely scrutinized. Romney was involved in about a hundred deals, many of which have received little notice because the companies involved were privately held and not household names. The most thorough analysis of Romney’s performance comes from a private solicitation for investment in Bain Capital’s funds written by the Wall Street firm Deutsche Bank. The company examined sixty-eight major deals that had taken place on Romney’s watch. Of those, Bain had lost money or broken even on thirty-three. Overall, though, the numbers were stunning: Bain was nearly doubling its investors’ money annually, achieving one of the best track records in the business. Most of that success came from a handful of little-known but incredibly successful investments. But the venture had begun with plenty of failures—and lessons.

R
omney was on yet another road show to attract investors, firing up an overhead projector and explaining how prudently he would handle their money if they bought into the fund that would make up Bain Capital’s first pool of capital. It could be a hard sell; his firm had no track record to speak of, just that magic name Bain. Romney and a number of Bain & Company partners had put $14 million of their own money into the fund and then worked to drum up support from outsiders. He and his road-show partner, Coleman Andrews, were well short of their funding goal. Then, one day, Romney got a tip from a Bain & Company executive, Harry Strachan, that some wealthy families in war-torn regions of Central America were looking for a place to invest, a safe harbor for their cash.

Romney was intrigued but worried. Already thinking of a career in politics, he wanted to be sure that the funds would not later be regarded as tainted. El Salvador, for example, was a scene of regular massacres and assassinations of political figures. Strachan said Romney “expressed to me that I had to put my hand in the fire for him, that none of the people we were introducing to him were involved in illegal drug money, right-wing death squads, or left-wing terrorism.” Strachan assured Romney that he would carefully vet the investors, including one whose nephew reputedly had a questionable background; he concluded that the investors’ money was clean. With that assurance, Romney agreed to meet with the Central American investors at a Miami bank, where he approved the investment. Years later, when he was asked about reports that some of the family members of investors might have had ties to paramilitary groups, he said he was satisfied that the individuals who had put money into Bain Capital had gotten the funds from legitimate sources. “We investigated the individuals’ integrity and looked for any obvious signs of illegal activity and . . . found none,” Romney said. For Bain, the Central American money was crucial, providing $6.5 million of $37 million in the fund.