Company's links to Iran undercut Romney's call for divestment
MERRIMACK, N.H. -- Republican Mitt Romney is urging state pension systems to divest from Iran, yet the presidential contender's former employer and the company he started have links to recent Iranian business interests or deals.
Romney joined Boston-based Bain & Co., a management consulting firm, in 1978 and worked there until 1984. He was CEO of Bain Capital, a venture capital firm, from 1984 to 1999, despite a two-year return as Bain & Co.'s chief executive officer from 1991 to 1992.
Bain & Co. Italy, described in company literature as "the Italian branch of Bain & Co.," received a $2.3 million contract from the National Iranian Oil Co., in September 2004. Its task was to develop a master plan so NIOC -- the state oil company of Iran -- could become one of the world's top oil companies, according to Iranian and U.S. news accounts of the deal.
Bain Capital, the venture capital firm that Romney started and made him a multimillionaire, teamed up with the Haier Group, a Chinese appliance maker that has a factory in Iran, in an unsuccessful 2005 buyout effort.
The target of their $1.28 billion bid -- the Maytag Corp., based in the lead presidential caucus state of Iowa.
A top Romney aide noted that the former Massachusetts governor has not worked at Bain & Co. since 1992, when he left after a two-year stint leading a financial restructuring.
"He has no involvement with or knowledge of the work they do or the investments they make," spokesman Eric Fehrnstrom said Friday.
Bain & Co. spokeswoman Cheryl Krauss also said her company did not profit directly from the National Iranian Oil Co. deal, although it receives a licensing fee from Bain & Co. Italy based on the amount of that entity's profits.
Bain & Co. Italy is owned by Italian shareholders.
Fehrnstrom, meanwhile, noted Romney has not worked at Bain Capital since 1999, when he relinquished his ownership stake in the firm and turned over his investments to a blind trust managed by a Boston law firm.
Romney cites his work with Bain & Co. and his development of Bain Capital as he casts himself as an outsider in the 2008 race.
He offered both companies a firewall when asked Friday about the appropriateness of their dealings given his harsh rhetoric about Iran, as well as his calls for states to cease investment links with Iran.
"This is something for now-forward," Romney said after touring GT Solar Inc., a solar energy manufacturer in this early primary state where he talked about the importance of the U.S. weaning itself from oil produced by its enemies.
"I wouldn't begin to say that people who, in the past, have been doing business with Iran, are subject to the same scrutiny as that which is going on from a prospective basis," Romney added.
He said the importance of future divestment was underscored by an International Atomic Energy Agency report released Thursday. It said Iran has ignored a U.N. Security Council ultimatum to freeze uranium enrichment -- a possible pathway to nuclear arms -- and has instead expanded its program by setting up hundreds of centrifuges.
Yet Iran, described by President Bush as part of the "axis of evil," is hardly a fresh threat on the U.S. foreign policy radar.
During the past two months, Romney has challenged Massachusetts and other New England states to pull their pension funds from companies doing business in Iran.
On Thursday, Romney expanded his divestment call to New York. He sent a letter to Sen. Hillary Rodham Clinton, D-N.Y., a fellow presidential candidate, urging her to support his effort.
Dan Weiller, a spokesman for New York State Comptroller Thomas DiNapoli, said Friday that New York's $150 billion state pension system has holdings with companies that have dealings with Iran or in that country.
Among them is Total SA, a French oil giant. As of March 2006, the state system had about $166 million worth of Total stock.
(Copyright 2007 by The Associated Press. All Rights Reserved.)