With economic uncertainty the foremost issue in millions of voters’ concerns, Republican presidential nominee-in-waiting Arizona Sen. John McCain has been urged to pick as his running mate his defeated rival, veteran businessman and former Massachusetts Gov. Mitt Romney.
A story that broke this week, however, has the potential to make it a wee bit harder for McCain to embrace Romney as his vice president.
An agreed buyout of Clear Channel Communications, whose wholly-owned radio arm Premier Radio Networks is home to leading conservative talk hosts such as Rush Limbaugh and Glenn Beck, and that on over 80 Clear Channel stations airs Sean Hannity, reportedly is unraveling.
Clear Channel’s prospective buyers Bain Capital LLC and Thomas H. Lee Partners LP on Wednesday filed complaints in New York state court, claiming that a group of banks led by Citigroup, Inc., had breached an agreement to finance the $19.5 billion deal. “The behavior of these banks is irresponsible, unprofessional, and unjustified,” said Clear Channel Chief Executive Officer Mark Mays in a statement.
“The defendants,” Mays continued, “have made clear that they are determined, by any means possible, to destroy the merger and thus avoid their obligation to fund, as they are required legally to do.”
Texas-based Clear Channel this week, according to Bloomberg, “asked for a court order banning the banks from interfering with the merger agreement and sought more than $26 billion in damages.” On Thursday, The Associated Press reported that a Texas judge issued a temporary restraining order barring banks from interferring with or thwarting the closing of this deal.
The bank group — Citigroup, Deutsche Bank AG, Credit Suisse Group, Morgan Stanley, the Royal Bank of Scotland Group and Wachovia Corporation — last April signed an agreement to finance the Clear Channel purchase. But loan prices have tumbled since then, and these banks now stand to lose at least $2.7 billion by completing the deal as they had promised to do, funding the deal by last Monday.
The bank group delay has been one factor in driving Clear Channel’s stock price down as much as 25 percent below the $39.20 per-share buyout price Bain and Thomas H. Lee Partners agreed to pay for the company. If these firms fail to close the deal, they are subject to $500 million to $600 million in “breakup fees.”
Mitt Romney has what might be at least a tangential connection to this shaky situation. Romney in 1984 was one of three co-founders of Bain Capital and served as CEO of this venture capitalist (or as liberal critics call it, a leveraged buyout) company.
This company, as it describes itself, has become “one of the world’s leading private investment firms whose affiliates manage over $50 billion in assets.”
Bain Capital has invested in many successful companies, including the Staples office-supply chain, Home Depot, Toys R Us, Burger King, Domino’s Pizza and even Artisan Entertainment, producers of the low-cost, highly-profitable independent movie “The Blair Witch Project.”
Romney left Bain in 1998-99 to rescue the faltering 2002 Olympic Winter Games in Salt Lake City, home of the Church of Jesus Christ of Latter-day Saints to which Romney belongs. His executive genius turned the games into a great success.
The New York Times, however, in 2007 identified Romney as having remained “an investor” in Bain, the main source of his personal fortune — reportedly in the range of $350 million.
Romney’s Bain friends and allies, reported the Times, provided “eye-popping levels of fundraising” for his 2008 presidential run.
“Mitt Romney,” wrote Internet critic Chris Brunner, “while no longer the CEO, remains a silent partner of Bain Capital.”
The current situation with Bain and Clear Channel might prompt liberal Democrats to raise a variety of questions:Is Mitt Romney’s proven expertise at leveraged buyouts, Bain’s main business, the kind of skill and savvy needed to restore the American economy to full health and confidence?Should Americans be concerned if a presidential or vice presidential candidate has even a tangential involvement in buying our nation’s biggest talk-radio syndicator which, through many of the 1,100 radio stations it owns, is the broadcaster of our most popular and politically influential talk shows?Could this slant what is said on the air about a candidate who might also be a future owner of the broadcasting company? Could such a tilt be tantamount to a campaign donation?Was it a conflict of interest that at least two of Clear Channel’s top radio talk hosts voiced positive opinions about candidate Romney as a potential president?
These hosts never told listeners that a company Romney co-founded, and with which he was still involved, was signatory to a 2006 agreement to buy Clear Channel and that completion of this deal was in process during Romney’s presidential run.
Should these hosts tell their listeners about Romney’s tangential connection to the purchase of Clear Channel if bank funding is resolved and this buyout of the broadcast giant gets back on track — and if Gov. Romney becomes Senator McCain’s running mate?
Nothing in Mitt Romney’s potential involvement in this buyout is in any way whatsoever illegal or unethical. The same can be said for honorable Clear Channel hosts who spoke favorably of Gov. Romney.
But in our age of highly charged, hotly polarized partisanship, leftists have demonstrated an eagerness to turn even the tiniest molehill into a mountain of accusation against Republicans, and even against one another.
Caesar’s wife must be above even the slightest suspicion in our era of undue influence and strange political bedfellows.
By bringing light and ventilation to Bain Capital’s and Mr. Romney’s role (if any) in the Clear Channel buyout, we can give McCain more freedom to consider Gov. Romney as a potentially excellent running mate.
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