Almost President (51 page)

Willard Mitt Romney was born in Detroit, Michigan, on March 12, 1947, the youngest of four children in the Romney household.
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The Romneys had been devout and prominent members of the LDS faith since a family ancestor became one of the first Mormon converts in England in 1837 and emigrated to America.

George Romney first gained national prominence when he saved the AMC from insolvency by developing the compact, affordable, and fuel-efficient Rambler when the rest of Detroit was building bigger and bigger land yachts. The elder Romney was also renowned for being the rare CEO to refuse raises and bonuses if he felt his performance had not warranted additional compensation. Given his position with AMC, Romney was often involved in Michigan and Detroit politics, such as leading an effort to improve the city's schools. His family was unsurprised when he announced in 1962 that he had decided to run for governor. He had only one question for his wife and children: “Should I run as a Republican or a Democrat?”

He ran and won as a Republican, but that he even asked the question was a sign that Romney was not fully attuned to the shift to the right that was already occurring in GOP politics. Romney, primarily because of his support of federal legislation supporting the civil rights of African Americans, became a champion of the party's fading moderate wing. He briefly considered a run for president in 1964 to help head off Goldwater's nomination, but the moderates were too late and too divided to stop “Mr. Conservative.”

Romney declined to endorse Goldwater and instead leaked a letter he had sent to the candidate, excoriating him for opposing federal civil rights legislation and for attacking federal entitlements. In words that 2012's conservatives may have believed reflected the core beliefs of the son, George Romney told Goldwater, “Dogmatic ideological parties tend to splinter the political and social fabric of a nation, lead to governmental crises and deadlocks, and stymie the compromises so often necessary to preserve freedom and achieve progress.”

George was intent on mounting a more serious presidential bid in 1968, but found that Nixon, who had spent the previous five years of his seeming political exile earning favors from Republicans across the country, had locked up the nomination. Though probably not the decisive moment in his presidential quest that it has been made out to be, the most famous moment in Romney's short-lived campaign was his assertion that he had been the victim of “brainwashing” by the military, which led him to be an early supporter of the Vietnam War, a position he no longer held by 1968.

The person most impacted by Romney's change of heart on Vietnam was his son. Mitt had first attended Stanford University in 1965 where he participated in counter-demonstrations to students protesting the Vietnam War. Now that George had cooled in his support of the war, so did Mitt, who did not serve in the armed forces during the Vietnam era. In addition to two student deferments to avoid military service, Romney also received a ministerial deferment when he pursued the traditional rite of passage among young Mormon men and served two years as a missionary in France, beginning at the age of nineteen. When he returned to the United States in 1970, he drew a high number in the draft lottery.

Like many men of that era in similar circumstances, Romney expressed ambivalence about not serving. “I longed in many respects to actually be in Vietnam and be representing our country there,” Romney said on one occasion, but said with equal conviction at another time, “It was not my desire to go off and serve in Vietnam.”

While performing mission work in France, Mitt Romney had left his girlfriend and fiancé, Ann Davies, in the States. Having already converted to Mormonism for Mitt, Ann waited for him and the couple married shortly after his return, later attending and graduating from Brigham Young University. Taking a short break from education to work on his mother's unsuccessful campaign for the U.S. Senate in 1970, Mitt then pursued a rigorous dual degree program in law and business from Harvard University, where he became known for a remarkable work ethic even among this select group of over-achievers.

As a top Harvard graduate, Romney had his pick of several career options, but made the relatively unusual choice of going into management consulting, first for the Boston Consulting Group and later for Bain and Company. Seven years later, Romney was tapped to lead a new venture for the company, Bain Capital, a private equity investment firm.

During the 2012 campaign, Romney repeatedly defended the concept of “creative destruction,” a phrase coined in the 1940s by Austrian-American economist Joseph Schumpeter to describe a theory of economic innovation whereby the new—new goods, new methods of production, new markets—necessarily kills off the old. Romney himself acknowledged in his book,
No Apology
,
that “creative destruction” is “inherently stressful—­on workers, managers, owners, bankers, suppliers, customers, and the communities that surround the affected business.” It was therefore incongruous that the Romney who praised the willingness to destroy in order to innovate took no risks of his own when he accepted the challenge of creating Bain Capital in 1984.

Romney had been Bain and Company's star consultant. He was comfortable with his life as it was. He had a stellar reputation and made good money. He knew that he and all the partners in the new firm would be asked to contribute to the investment fund. If he failed, both his reputation and his pocketbook would take a hit. So, he was offered an extraordinary deal. If the new venture fell short, Romney would get his old job and his old salary back plus all the raises he might have missed, and if Romney had to return to Bain and Company, the company would announce it was not because he had failed but because he was more valuable as a consultant. As boss, Bill Bain explained, Romney took “no professional or financial risk.”

Bain's business ventures under Romney's leadership were too numerous and complicated to mention in detail. Suffice it to say that Bain could boast of successes not only for their investors, but sometimes also for workers. Staples, Inc. was an early Bain success and one of the companies most often cited by Romney when declaring himself a “job creator.” Where other investors declined to buy into the then speculative idea that a big box store selling nothing but office supplies could be hugely profitable—who would purchase that many paper clips or pencils?—Bain put $2.5 million into the fledgling company, allowing Staples to open its first store in 1986. By 2012, Staples had more than 2,200 stores and 89,000 employees.

But even these successes were not always clear-cut. Critics wondered how many smaller office supply stores Staples had put out of business and how many jobs were lost?

Bain also invested in and advised companies for which their involvement resulted in those companies selling off key assets, increasing company debt, laying off workers, and sometimes being completely liquidated—
after
Bain collected the fees it was owed. The example that received the most attention during the 2012 campaign involved GST Steel. Bain eventually invested nearly $50 million in the company and then directed GST Steel to borrow heavily to modernize its plants in North Carolina and Kansas City “and to pay dividends to Bain,” according to Kranish and Helman. When steel prices fell, Bain closed the Kansas City plant, laying off 750 employees. Asked about how he could justify Bain demanding and receiving large dividends from companies that were already in trouble, Romney said, “It is one thing that if I had a chance to go back I would be more sensitive to.”

Romney's embrace of “creative destruction” would lead to a misstep that arguably cost him the presidency. Confident of his credibility given his father's work at AMC, Romney was harshly critical of President Obama's bailout of the American auto industry. Prior to the bailout taking effect, Romney had penned an op-ed for the
New York Times
in which he argued the companies would be better served if allowed to go into a controlled bankruptcy, though he was unclear who in the private sector, particularly in the midst of the financial crisis, had the resources to help the industry other than the federal government. Romney's opinion piece was headlined, “Let Detroit Go Bankrupt.” Romney had not written the headline himself, but he never disavowed it, instead predicting that with a federal bailout “you can kiss the American automotive industry goodbye.” Instead, General Motors and Chrysler, the two companies who received federal assistance, did turn their fortunes around and reported record sales and profits. The bailout proved immensely popular in states dependent upon the auto industry and its feeder industries for thousands of jobs. Romney's opposition, and his steadfast refusal to acknowledge the bailout's success, prevented him from possibly carrying Ohio and perhaps even Michigan.

Having made his fortune at Bain, Romney, following his father's template, decided to enter politics. Befitting both his pedigree and his status as a successful CEO, he started near the very top, challenging one of the political icons of the twentieth century, the last surviving Kennedy brother, Massachusetts Senator Edward Kennedy, who was seeking his sixth Senate term in 1994.

Despite his father's political legacy, Romney had been a registered independent who had given donations to both Republican and Democratic candidates until he registered as a Republican in October 1993. Such an unformed political identity led a conservative Boston newspaper columnist to call Romney “philosophically vacuous.” As Kranish and Helman noted, for Romney the question was not what did he believe but “what kind of candidate did he need to be to win?”

The only Republicans elected in Massachusetts were moderates, so that is how Romney defined himself. On such hot button issues as legal abortion and gay rights, Romney told supporters of each, “I'll be better than Ted Kennedy.” He also supported gun control measures opposed by the National Rifle Association and declined to sign the “Contract with America” being pushed by congressional Republicans that year, which vowed support for such measures as term limits and a constitutional amendment requiring a balanced federal budget. Romney even distanced himself from the presidency of Ronald Reagan, declaring, “I was an independent during the time of Reagan-Bush.” As a Massachusetts political operative said, “When you deny Ronald Reagan when you're a Republican, then nobody knows where you are.”

Facing his first serious electoral challenge for his Senate seat, Kennedy turned out to be anything but a doddering old timer ready for retirement. When Romney insisted during a debate that he was “pro-choice” on abortion, Kennedy retorted that Romney's position was more “multiple choice.” He used Romney's record at Bain to suggest Romney had been responsible for throwing people out of work, citing GST Steel as a prime example. Outrageously, given the lengths to which his brother had fought to gain acceptance as America's first Roman Catholic president, Kennedy even tried to use Romney's Mormon faith against him, suggesting the Mormon Church still discriminated against African Americans, when the church had begun allowing blacks to become priests more than fifteen years before. Despite that stumble, Kennedy won by seventeen points. Still, Romney had made a credible effort and was poised for future opportunities.

Before another political run, however, Romney took a detour to help “rescue” the 2002 Winter Olympics, scheduled to be held in Salt Lake City. The games were engulfed in scandal when it was revealed that local organizers had gone above and beyond the traditional feting of the International Olympic Committee with gifts and payments so large they amounted to outright bribes in order to secure the games for Salt Lake. Someone needed to be brought in to clean up the mess and restore the local committee's integrity. Given his family's prominence in the Mormon Church and his demonstrated managerial and financial acumen, Romney was chosen ahead of a local son who badly wanted the job himself, future Utah Governor Jon Huntsman, who became Romney's rival for the Republican nomination in 2012.