The story begins in 1989, when Romney was the head of Bain Capital, a private equity firm that specialized in buying troubled companies, turning them around, and then selling them for a profit. That year, Bain bought Damon Corp., a medical testing company based in Needham, Mass.The story is all too typical of the "heads I win, tails you lose" approach of modern big business.
Bain took the company public in 1991, and Romney served on the company’s board of directors. In 1993, Bain orchestrated a sale of the company to Corning Inc., getting a handsome return on its investment and earning Romney himself $473,000, according to The Real Romney. After the sale, Corning closed the main facility in Needham, laying off 115 people.
In October 1996, federal prosecutors announced that Damon was agreeing to pay $119 million in both civil and criminal fines after pleading guilty to defrauding Medicare. The company was providing doctors with forms that didn’t make clear what tests included, so doctors were checking off additional tests that weren’t necessary, according to the Globe’s summary of the government’s case.
The overbilling went from 1988 through 1993, prosecutors said. "This is a case, pure and simple, of corporate greed run amok," U.S. Attorney Donald Stern said when the settlement was announced.
Under the most charitable explanation, Romney failed in his ethical and fiduciary responsibilities. Despite these failures, he was handsomely rewarded and was able to walk away from this mess he was involved in.
In this week's debate, Romney said,
...I think it's important for people to make sure that we don't castigate individuals who have been successful and try and, by innuendo, suggest there's something wrong with being successful and having investments and having a return on those investments.There is "something wrong" with running or overlooking a multi-million dollar criminal enterprise. There is "something wrong" with pocketing money that activity. And there is "something wrong" with foisting that illicit enterprise off on some other unwitting investors.
Speaker, you've indicated that somehow I don't earn that money. I have earned the money that I have.
The same types of unethical and irresponsible behavior--create a mess, take your cut, and sell it to the next person--were at the heart of the financial crisis that led to the Great Recession. Romney was just a few years ahead of his time.