Ties to Romney ’08 Helped Fuel an Equity Firm (updated)

[ProSense]

Last edited Tue May 1, 2012, 11:20 AM - Edit history (1)

Ties to Romney ’08 Helped Fuel an Equity Firm

By MICHAEL LUO and JULIE CRESWELL

About a month after Mitt Romney ended his bid for the Republican presidential nomination in February 2008, his eldest son, Tagg, and Spencer Zwick, the campaign’s top fund-raiser, met with a beef company executive who had been a major campaign donor over dinner at the posh Torrey Pines resort in San Diego.

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Two years later, despite a challenging fund-raising climate for private equity, Solamere, named after a wealthy enclave in Utah’s Deer Valley where the Romneys have a winter home, finished raising its first fund. The firm blew past its $200 million goal, securing $244 million from 64 investors, including a critical, early $10 million from Mitt Romney and his wife, Ann, and hefty commitments from wealthy supporters of the campaign.

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It is not unusual for start-ups looking for investors to approach friends and relatives. But the overlap between the elder Romney’s political apparatus and Solamere adds a different, potentially nettlesome dimension, given the widespread presumption since the last presidential election that the former Massachusetts governor was next in line for the Republican nomination.

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“No one we went to as an investor said, ‘Oh, your dad is Mitt Romney, I’m going to give you $10 million,” Tagg Romney said, noting that his father’s political future was uncertain when the firm began. He added, “Our relationships with people got us in the door, but that did not get us investors.”

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http://www.nytimes.com/2012/05/01/us/politics/ties-to-romney-08-helped-fuel-equity-firm.html?_r=1&ref=politics&pagewanted=all

Updated to add:

Mitt Romney says 'take a risk' by starting a business ... it worked for Tagg

by Laura Clawson

When Mitt Romney recently told college students to "Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business," telling them about a friend who'd borrowed $20,000 from his own parents, many observers responded "borrow what money from our parents? Our parents don't have $20,000 to lend us." But of course that's the kind of thing that doesn't occur to Mitt Romney, because $20,000 is such a laughable pittance to him. Even when Mitt Romney considers that there are people who would need to borrow from their parents, not having a stock portfolio to draw on, he just assumes that it's a reasonable amount for parents to lend their children. It is just two casual bets for him.

It's also just 0.002 percent of what Mitt and Ann Romney invested in son Tagg's little start-up company. The $10 million the Romneys put into Solamere Capital, a private equity fund started by Tagg and two partners in 2008, came through Ann's blind trust, once again forcing us to pause for laughter between "blind" and "trust." The Romneys didn't only provide direct funding, either. Many supporters of Mitt's then just-concluded 2008 presidential race put money into Tagg's fund.

The issue is not even that Mitt Romney doesn't care about the poor. He probably doesn't, but that question is irrelevant against the larger issue that he really doesn't get that economic struggle is distinct from living off your stock portfolio, that parents who love their kids every bit as much as he loves his can't even pay their college tuition, let alone then lend them $20,000 to start a business. These are the assumptions he'd bring to being president, around which he'd shape policy. And there's literally no place in them for 99 percent of America.

http://www.dailykos.com/story/2012/05/01/1087833/-Mitt-Romney-says-take-a-risk-by-starting-a-business-it-worked-for-Tagg

[orwell]

1. Another inspiring "pulling yourself up...

...by your father's bootstraps" American story.

Horatio Alger lives...

[ProSense]

3. Just borrow the money from your parents! n/t

[Scuba]

2. Thanks. More from the article...

While Solamere has not operated exactly as a subsidiary of the Romney campaign, it has seemed that way at times. The firm shared its first address with the Romney campaign headquarters in Boston. Later, the company was located in the same building as Mr. Romney’s leadership PAC, Free and Strong America, before moving to trendy Newbury Street in Boston.

When Mr. Zwick was leading Solamere’s fund-raising in 2008 and 2009, he was also raising money for the leadership PAC, which paid his finance consulting firm, SJZ, LLC, more than $425,000 during those years.

[Angry Dragon]

4. Willard Rmoney

Mr. Clueless

[CitizenK9]

5. "All but one of the firm's 11 employees ... had come from ... Stanford Financial Group

which federal officials had closed earlier that year for selling sham certificates of deposit financed through a multibillion-dollar Ponzi scheme." (in last 7 paragraphs of the article)

There's some rebuttal that the employees were minor players, but the feds are seeking to recover money from three of them. It appears that the firm is well equipped, both in connections and expertise, to operate in the area between legal and illegal that is so dear to the 1%.