President Barack Obama’s re-election campaign claims that GOP front-runner Mitt Romney “closed over a thousand plants, stores and offices” while making “hundreds of millions of dollars” while with investment firm Bain Capital. The claim is “a real stretch,” The Washington Post
concluded in a fact check.
The bulk of the thousand closures come from Bain’s deal with KB Toys that ended up shutting 600 stores when it filed for bankruptcy protection in 2004. The Post labels the KB Toys deal “a bit fishy.”
“Bain paid $300 million for KB Toys in December 2000, but only put in $18.1 million in cash, borrowing the rest,” according to the Post. “Then, less than two years later, KB Toys took out bank loans to fund executive bonuses and dividends to Bain totaling more than $120 million. In 16 months, Bain had easily quadrupled its investment.”
The company emerged from bankruptcy but was forced during the economic crisis to liquidate in 2008. However, this had little to do with Romney because the KB Toys deal went down after he left to head the Salt Lake Olympics early in 1999. Romney did retain an interest in Bain Capital until 2001 but the KB payout took place after he formally left the firm in 2002, the Post reported.
“It is a real stretch to claim that Romney — himself! — ‘closed’ these stores. No evidence has emerged that he was involved in the KB Toys transaction,” the Post wrote.
“Two wrongs don’t make a right” the Post concluded in awarding the claim three Pinocchios. “Just because Romney exaggerated claims about job creation does not mean that the Obama campaign can tag him with store closings in which he appears to have played no role.”
© 2013 Newsmax. All rights reserved.