Mitt's equity army

By DAVID S. BERNSTEIN  |  August 10, 2007

The Olympics were emerging from an international bribery scandal. To launch his political career, Romney needed to financially rescue them. To do that, he needed corporate sponsorships. And he got many of those sponsorships by working his business connections, and his skill at finding ways to make deals worthwhile to the person across the table.

The details of those deals were never disclosed: Romney exempted them from his “total transparency” pledge regarding the SLOC’s finances and business arrangements.

One story told by Romney himself suggests his methods. In Turnaround, his 2004 book about his Olympics experience, Romney tells of the deal he offered to his friend Thomas Stemberg, founder and then-CEO of Staples, for that company’s sponsorship: his Olympics staff “would get to work lobbying SLOC board members and other corporate contacts to switch their office-supply contracts to Staples.”

Romney was on the Staples board at the time, and holding a financial stake in the company, as he was offering to use his SLOC leverage and staff to drum up business for the company, an apparent conflict of interest.

But before Stemberg accepted, SLOC’s outside-sales firm landed Office Depot for the sponsorship. Romney wanted it to go to Staples. As he writes in Turnaround, he arranged for Stemberg to offer a million dollars more than Office Depot had — and then had his SLOC staff offer Office Depot a million dollars to back out of the sponsorship deal. Office Depot declined, and kept the sponsorship.

In other cases, generosity to the Winter Olympics was followed closely by lucrative deals from Bain Capital, which do not prove a quid pro quo but do raise questions.

Utah billionaire Jon M. Huntsman ponied up a cool million dollars to the Olympics — and in July 2001, Bain Capital invested roughly a quarter-billion dollars in Huntsman’s international-holdings company. Huntsman is now a national finance co-chair for Romney’s presidential campaign.

Gateway, too, signed on as a sponsor; in September 2001, it made an agreement for unpaid consulting services from Bain Capital, in exchange for certain underwriting opportunities.

Others of the final tally of 53 corporate sponsors were already under Romney and Bain Capital’s influence. Marriott is led by close family friends — now campaign finance co-chairs; plus, Romney was sitting on the company’s board at the time. Sealy, which Bain Capital owned, became a sponsor. So did, where one of Romney’s sons worked as a consultant. The vice-chair of General Motors was on Marriott’s board of directors with Romney, as were the directors of Blue Cross/Blue Shield and Sears; all became sponsors. Many other sponsors had extensive business dealings with Bain Capital companies, or had top-ranking executives with past connections to Bain Capital companies. And most of them have come through for Romney again, by donating to his campaign.

Cashing in the chits
Many of Romney’s Olympic sponsors were pleased enough with the results to financially back Romney’s presidential campaign. So are scores of business owners, land owners, and investors in Utah who made money off of the 2002 Winter Olympics, whether through licensing deals, local development, or other beneficial relationships.

Many of them, unsurprisingly for Utah, share Romney’s faith: the Church of Jesus Christ of Latter-Day Saints (LDS), a/k/a the Mormon Church. This was a factor in their decision to hire him, some of those on the SLOC board have said, and he already had personal relationships with many of them through the church community.

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