Jan. 18 (Bloomberg) -- Newt Gingrich, the Republican presidential candidate who has criticized rival Mitt Romney for his role in the buyout industry, was paid $40,000 at a meeting two years ago to deliver a speech that praised the private equity industry, according to the meeting’s organizer.
“We paid him $40,000 and this gentleman praised private equity more fulsomely than I could ever do it,” Paul Levy, managing director at JLL Partners Inc., said in an interview with Bloomberg Television today. “He was great. He gave a great evening. Everybody had fun. He fielded a lot of questions. He gave us a lot of time. Nobody praised private equity, risk- taking, capital more fulsomely than Newt Gingrich.”
Campaign spokesman R.C. Hammond accused Levy of making a “political hit” on Gingrich, saying the former House Speaker takes issue with Romney’s work at Bain, not the entire industry.
“Newt isn’t going out and attacking capitalism,” he said. “What we’ve pointed out is the character and leadership that Romney made as the head of a company.”
On the campaign trail, Gingrich has cast Romney, the former chief executive officer of private-equity firm Bain Capital LLC, as an executive more interested in maximizing profits than jobs.
Speaking to a gathering of business leaders yesterday in Columbia, South Carolina, he characterized the Bain business model as “exploitive” and “not defensible.”
“I’m proud of real capitalists,” he said. “But not particularly proud of people who go in, leverage the game, borrow the money, leave the debt behind and walk off with all the profits.”
Gingrich continued that the private-equity work Romney engaged in “is not venture capital.”
“Venture capital is when you go in and put in your capital and you stick it out,” he said. “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain a great deal of money and leave.”
In a 28-minute film released last week, Gingrich supporters described Romney as a financier “more ruthless than Wall Street.” The film highlights stories of people who say they lost their jobs after their companies were acquired by Bain.
In the Bloomberg TV interview, Levy, who founded the private-equity firm JLL in 1988, urged more managers in the industry to speak out against the criticism from Gingrich and Romney’s other opponents.
“These people, I think, should step forward and speak to their achievements and say, by the way, not every deal goes well,” he said.
Levy said later in an e-mail to Bloomberg News that Gingrich’s response to his comments have “taken hypocrisy to a new level.”
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