Romney's ReBoot Week... Off To A Rocky Start

If not for the big Politico feature Monday morning about Romney's campaign melting down and if not for the leaked tape from right-wing sex pervert Mark Leder's $50,000/plate fundraiser about Romney telling his wealthy donors that he divides America into the moochers and the non-moochers in Mother Jones Monday evening, Frank Rich's New York column on right-wing immersion would have been the dominant story of the early part of a week that will apparently continue developing the theme of the agony of Willard Romney. As U.K. right-wing pundit (and erstwhile Romney booster) Iain Martin put it Tuesday, "[a] candidate stupid enough to say such a thing in an election year, or in any year, should be asking himself if politics is really the game for him."

Rachel covered Frank Rich in the video clip above and we'll come back to him in a moment but I know the DWT readership enough to know that everyone wants more details on right-wing financial predator Marc Leder, who says he started his crooked private equity business after he was inspired by Romney. After his wife of 22 years had an affair with her 22 year old tennis instructor he dedicated himself to a life of debauchery (and, of course, raising money to get Romney into the White House). Julie Creswell reported on his kooky konservative scene last January for the NY Times, reports that aren't quite as explicit as the NY Post reports.

It was, the gossip pages would later report, the talk of the Hamptons-- a midsummer night’s bacchanal in the playground of the 1 percent.

Beyond the windswept dunes in Bridgehampton, at a $400,000-a-month oceanfront mansion, bright young things bubbled up and the Champagne flowed fast. Into the small hours, professional dancers in exotic clothing gyrated atop platforms. One couple twirled flaming torches. The sounds of techno boomed over the beach.

The New York Post summed up the evening’s Dionysian mysteries with the following headline: “Nude Frolic in Tycoon’s Pool.”

The Post’s tycoon, and the party’s host, was a financier named Marc J. Leder, and those weekend revels last July had the East End of Long Island buzzing. Like many deal makers, though, Mr. Leder, 50, is virtually unknown outside financial circles. But from his headquarters in Boca Raton, Fla., he presides over a multibillion-dollar private empire. He is a practitioner of a Wall Street art that helped define an age of hyperwealth, and which has now been dragged into the white-hot spotlight of presidential politics: private equity.

It was through private equity that one Republican candidate, Mitt Romney, amassed his wealth-- and, it turns out, it was through private equity that Mr. Romney first met Mr. Leder. A couple of months after the blowout in Bridgehampton, Mr. Leder was host for a fund-raiser at his Boca Raton home for Mr. Romney’s campaign. But the connection goes back even further. Years ago, a visit to Mr. Romney’s investment firm inspired Mr. Leder to get into private equity in the first place. Mr. Romney was an early investor in some of the deals done by Mr. Leder’s investment company, Sun Capital, which today oversees about $8 billion in equity.

Mr. Romney’s own time in the private equity business, at Bain Capital, has provoked fierce attacks from Republican rivals and others. It has also prompted a lot of questions, including the big one: What good is this business, anyway? Detractors say private equity has enriched a handful of financiers at the expense of ordinary Americans. The deal makers, this line goes, buy companies and then bleed the life out of them. Jobs are often among the casualties.

Whether there’s truth to such claims depends on whom you ask. Private equity executives, as well as Mr. Romney, who left Bain in 1999, say the industry fixes troubled companies and ultimately creates jobs. Whatever the case, three decades after this sort of deal-making burst onto the scene in the merger mania of the 1980s, there are surprisingly few solid answers from either side.

What is certain is that buyout specialists upended the old order and made vast fortunes for themselves. Fueled by easy money from banks, and from endowments and pension funds, these private investors were able to buy companies with borrowed money and put down relatively little of their own cash.

Today, many of these private kingdoms rival the nation’s mightiest public companies. In all, the private equity industry oversees $3 trillion in global assets, according to Preqin, the research firm. Buyout kings control more than 14,000 American companies, including brands like Hilton Hotels and Burger King.

BUT financiers weren’t the only ones to embrace private equity. On the campaign trail, Rick Perry called private equity artists “vulture capitalists.” But as governor of Texas, he blessed the largest corporate buyout in history-- the $44.4 billion takeover of the utility TXU by several investment firms in 2007. Indeed, as in many other places nationwide, public pension funds in Texas used public money to bet on private equity, in hopes of generating the investment returns they needed to pay retirees.

Against this backdrop, the story of Marc Leder might seem a footnote in the nation’s economic ledger. But it is a story worth knowing. That’s because, in many ways, Mr. Leder personifies the debates now swirling around this lucrative corner of finance.

To his critics, he represents everything that’s wrong with this setup. In recent years, a large number of the companies that Sun Capital has acquired have run into serious trouble, eliminated jobs or both. Since 2008, some 25 of its companies-- roughly one of every five it owns-- have filed for bankruptcy.

Among the losers was Friendly’s, the restaurant chain known for its Jim Dandy sundaes and Fribble shakes. (Sun Capital was accused by a federal agency of pushing Friendly’s into bankruptcy last year to avoid paying pensions to the chain’s employees; Sun disputes that contention.) Another company that sank into bankruptcy was Real Mex, owner of the Chevy’s restaurant chain. In that case, Mr. Leder lost money for his investors not once, but twice.

Yet Mr. Leder doesn’t seem to be suffering too much himself. In fact, he is living so large that he can’t avoid the limelight. Last July, he used part of his personal fortune to join a group of investors in buying the Philadelphia 76ers. In December, he was spotted on St. Bart’s with Russell Simmons, of Def Jam and Phat Farm fame, and Rachel Zoe, the celebrity stylist. That again landed him in the New York Post, which dubbed him a “private equity party boy.”

No comments from Pat Robertson, Bryan Fischer, Robert Jeffress, Richard John Neuhaus, Richard Dobson and other paragons of religionist right charlatanism-- not about Romney dividing Americans into the moocher and non-moocher camps (which apparently is fine for Mormons and their bizarre version of Jesus but not something actual Jesus would approve of) and not about holding his event at the orgy-meister's home. But what Frank Rich found in his investigation of the right-roots is that there's plenty of anger out among the angry reactionaries about the GOP Establishment that Romney epitomizes.

What did I learn in my week imbibing the current installment of the Reagan revolution? I came away with empathy for those in the right’s base, who are often sold out by the GOP Establishment, and admiration for a number of writers, particularly the youngish conservative commentators at sites like the American Conservative and National Review Online whose writing is as sharp as any on the left (and sometimes as unforgiving of Republican follies) but who are mostly unknown beyond their own ideological circles. What many of the right’s foot soldiers and pundits have in common is their keen awareness that they got a bum deal in Tampa, a convention that didn’t much represent either their fiercely held ideology or their contempt for the incumbent. They know, too, that their presidential candidate is the Republican counterpart to Al Gore-- not only in robotic personality but in his cautious hesitance to give full voice to the message of his troops. Even Paul Ryan, the right’s No. 1 living hero, let many of his fans down with his convention speech-- not because he fudged facts but because he soft-pedaled his “big ideas” about small government once in the national spotlight. Ryan left some conservatives wondering if the only thing they gained from having him on the ticket was his name on a lousy T-shirt.

...That fury, unsurprisingly, was articulated early by Limbaugh. At the start of convention week, he replayed a Bill Kristol admonition, delivered the day before on Fox News Sunday, that the convention had to advance a positive agenda. “So what he’s basically saying is, ‘Don’t make the convention about bashing Obama,’” was how Limbaugh translated Kristol’s advice. He was having none of it. “I think it’s been a trick the Democrats have used for decades, and I’m stunned that our side keeps falling for it,” he said. “The trick is: ‘These Independents don’t like criticism! They don’t like raised voices! They don’t like partisanship! It makes them nervous. And whenever the Republicans get critical of President Obama, these Independents just run right back to the Democrats and vote for them.’ I don’t believe that for a minute!”

Limbaugh’s disgruntlement proved mild compared to that of his radio peers. As Romney prepared to deliver his acceptance speech Thursday, Michael Savage was on fire during his early-evening broadcast. Declaring himself “sickened” by “the eunuchs in the Republican Party,” he derided the convention for ignoring issues like immigration and Afghanistan in favor of stunts like Ann Romney’s speech domesticating her husband (“Just what we need … a man who may be president, that he does his own laundry!”). He was scarcely more charitable toward Ryan’s, asking if any of the vice-presidential nominee’s fans could “remember one word” that he said. His contempt for the GOP Establishment was bottomless. “The drunken speech the other night by John Boehner was the beginning of the end,” Savage said. “The man slurred as though he was a janitor in a bar, not the speaker of the House of Representatives … Now you understand why the tea-party movement arose, and now you understand why they haven’t even mentioned the tea party … I have no idea what they stand for.” And he was still just warming up. “The Republicans have just dug their own grave,” he continued. “Unless Romney gets up there like a man and stops acting like a pocketbook carrier for his wife, he is finished.”