August 18, 2012
Mitt Romney and Paul Ryan’s brother provide an object lesson on how crony capitalism is done,
Romney may have breached state ethics laws as Governor of Massachusetts by holding a stake in a company that did lucrative work for his administration and was linked to the family of Paul Ryan, according to the Daily Telegraph.
Imagitas, a marketing company, was contracted by the state of Massachusetts after receiving $5 million investment from Bain Capital, Romney’s investment firm.
DT has learned that one of Paul Ryan’s brothers, Tobin Ryan, is a former Bain consultant. Both Romney and Tobin Ryan apparently stood to benefit from the $230 million sale of the company in 2005, while Romney remained governor of Massachusetts.
Massachusetts law requires that all state employees divest themselves of financial interests in private sector contracts with state agencies. At the time, failure to do so could have resulted in a $2,000 fine or a 2.5-year prison sentence.
DT goes on:
The finding also sheds light on previously unnoticed connections between Mr Romney’s involvement in the private sector, government and campaign finance.
Imagitas donated tens of thousands of dollars to the Republican Governors’ Association while it was chaired by Mr Romney. A former Imagitas investor and director donates to both Mr Romney and Paul Ryan, who also received thousands of dollars in contributions from his brother Tobin….
For three years from 1995, Tobin Ryan, who is now 47, was a senior manager at Bain & Company, the consulting firm where Mr Romney made his name. Mr Romney was at the time leading Bain Capital, the firm’s investment arm, inside the same Boston headquarters.
In March 1998, Mr Ryan left Bain to become a vice-president at Imagitas. The company had been co-founded by Tom Beecher, another former Bain consultant. Their company secured the $5 million (£3.2 million) from Bain Capital in June 2000.
Flush with funds, Imagitas quickly expanded. It won contracts with several state governments to produce vehicle registration mail-outs, on which it sold advertising. Five colleagues said that Tobin Ryan had responsibility for this project. “He was my boss’s boss,” said Michael Donovan, the firm’s director of government relations at the time.
“A lot of the folks who joined us around that time came from the worlds of politics and government,” said a manager who reported to Mr Ryan on the vehicle registration project. Another, who like several former employees requested anonymity, said Mr Ryan’s role included travelling to states to meet with senior government officials.
In December 2001, Imagitas secured a contract with Wisconsin, whose then-governor, Scott McCallum, was a political ally of Paul Ryan, who is a US congressman for the state. Roger Cross, the administrator of Mr McCallum’s department of motor vehicles at the time, said: “I know Tobin through politics, not business”. Tobin Ryan declined to say whether he had been involved in the Wisconsin deal.
Imagitas announced a similar partnership with Massachusetts in July 2002, shortly before Mr Romney was elected as the state’s Republican governor, and just after Tobin Ryan says that he departed the company. Its work for the state continued for several years under Mr Romney’s governorship. His officials boasted that it saved taxpayers tens of thousands of dollars a year.
Mr Romney’s 2002 financial disclosure form states that he still owned 100 per cent of Bain Capital Investors VI, the fund’s controlling entity, and Bain Capital Inc, their overall parent company. However, the forms did not detail the individual companies, such as Imagitas, in which Bain Capital held investments. New state employees were obliged to prevent conflicts of interest with existing contracts…
Spokesmen for Mr Romney repeatedly declined to confirm or deny that he had profited from the sale of Imagitas, or to answer a series of detailed questions about his financial connections to the firm lodged by The Daily Telegraph earlier this week. “You’ve seen his disclosure forms – you know what’s on them,” one campaign source said….
Another corporate backer to profit was The Carlyle Group, the Washington-based investment firm with extensive links to the Republican party, which put $20 million (£12.8 million) into Imagitas in 2000.
Tobin Ryan omits his work at Imagitas from his corporate biography.
This article was posted: Saturday, August 18, 2012 at 7:45 am