During Mitt Romney’s time running Bain Capital, the private equity firm invested in companies that were trailblazers in outsourcing jobs from the United States to call centers and factories making computer components in countries such as China and India, according to a report published late Thursday in the Washington Post.
The report could bring renewed examination to Romney’s career at the company he helped found, as well as scrutiny to one of the Republican nominee’s recurring campaign pledges. Throughout his presidential bid, Romney has insisted repeatedly that, as president, he will get tough on China and thwart the burgeoning economic power from siphoning jobs from the U.S. With his experience as a businessman serving as the cornerstone of his campaign, Romney has argued that he will use his professional experience to create jobs in America.
But according to filings with the Securities Exchange Commission unearthed by the Post, Bain’s involvement in outsourcing came at a time when a growing number of American companies were shipping jobs overseas, making Romney’s financial company an early player in the field.
From the Post’s report:
Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing “general executive and management services,” according to SEC filings.
By 1997, Stream was running three tech-support call centers in Europe and was part of a call center joint venture in Japan, an SEC filing shows. “The Company believes that the trend toward outsourcing technical support occurring in the U.S. is also occurring in international markets,” the SEC filing said.
Stream continued to expand its overseas call centers. And Bain’s role also grew with time. It ultimately became the majority shareholder in Stream in 1999 several months after Romney left Bain to run the Salt Lake City Olympics.
Romney’s time with Bain has been brought to the forefront in nearly each of the former Massachusetts governor’s political campaigns, dating back to his 1994 challenge against the late Sen. Edward Kennedy. The Obama campaign took aim at Romney’s career with the firm almost immediately after the general election campaign began in earnest, but has since withdrawn those attacks.
Tom Kludt
Tom Kludt is a newswriter for TPM. A former research intern and polling fellow for TPM, he lives and works in New York City. Tom graduated summa cum laude from the University of South Dakota in May of 2010 with a B.A. in Political Science and History. He can be reached at Tom (at) talkingpointsmemo.com.
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