In New Ad, Obama Challenges Romney on China Trade

President Barack Obama speaks at Dobbins Elementary School in Poland, Ohio, Friday, July 6, 2012. Obama is on a two-day bus trip through Ohio and Pennsylvania. 

Πηγή: abc news
By KEN THOMAS (AP)
July 7 2012

President Barack Obama is challenging Mitt Romney's promises to crack down on China's trading practices, saying in an ad released Saturday that the Republican candidate profited by allowing China to strip away U.S. jobs.

Obama's ad turns again to a recent Washington Post report that several businesses backed by Romney's former private equity firm moved American jobs to China and India to cut costs. In a parting shot, a narrator says Romney is "not the solution. He's the problem."

The ad follows Obama's two-day bus tour in Ohio and Pennsylvania, where the president announced plans to file a trade complaint against China at the World Trade Organization for unfairly imposing duties on the exports of U.S.-produced automobiles. Ohio is home to several auto plants and tens of thousands of workers directly employed by the auto industry.

China remains a flashpoint in the presidential campaign.

Romney has accused Obama of failing to live up to promises to get tough on the economic powerhouse, saying he would label China a currency manipulator on his first day in office and fight the theft of intellectual property and job losses.

Obama's administration says it has taken a broad effort to crack down on what it calls unfair Chinese trading practices, filing seven trade cases with the WTO against Beijing.

The 30-second spot opens with a clip of Romney during a 2011 Republican primary debate. He says "the Chinese are smiling all the way to the bank taking our jobs and taking a lot of our future. And I am not willing to let that happen."

A narrator responds that Romney "made a fortune letting it happen."

The Obama ad refers to the Post account about the role Romney's firm played with companies that were "pioneers" in helping outsource jobs. It pointed to one business that said it was a "one-stop shop for their outsource requirements."

"Mitt Romney's not the solution. He's the problem," the narrator says.

Romney spokeswoman Andrea Saul said it was "no surprise President Obama would want to distract Americans from the devastating June jobs numbers, but the American people deserve better than dishonest ads."

The accusations over China come against the backdrop of a sluggish economy. The June jobs report released Friday found that the economy added only 80,000 jobs during the month and unemployment stayed at 8.2 percent, fueling Romney's charges that Obama has failed to guide the economy out of the recession.

The Obama spot is part of a $25 million ad buy in July and will run in New Hampshire, Virginia, North Carolina, Florida, Ohio, Iowa, Colorado and Nevada.

The ad represents the latest attempt by Obama's team to discredit Romney's argument that his private sector experience makes him more qualified than the president to steer the economy during high unemployment. Obama's campaign has repeatedly cited a recent Washington Post story outlining how several businesses backed by Romney's former firm, Bain Capital, transferred jobs to lower-wage countries such as China and India.

Romney's campaign has questioned the accuracy of the report and asked the Post for a retraction. The newspaper stood by its report.

At campaign events, Obama has pointed to the outsourcing charges, saying he would end tax credits for companies that shipped jobs overseas, similar to a pledge he made during his 2008 campaign.

"You want somebody who will give tax breaks to companies that create jobs in manufacturing here in the United States, not ship them overseas," Obama said last month in Miami Beach, Fla.

Carlyle founders reap more than $134M each in 2011

The District-based private equity firm is gearing up for a public stock offering, a move that would make it the second largest asset manager in the world. These founders have helped propel the company to success.

Πηγή: Washington Post
By Thomas Heath

Jan 11 2011

The three founders of The Carlyle Group each earned more than $134 million in salary, bonus and income last year, confirming the widely held view that the intensely private buyout firm was as profitable for its owners as it was for its clients in 2011.

The release of the numbers, filed Tuesday in documents with the Securities and Exchange Commission, comes after Carlyle closed out one of its most profitable years ever, returning $15 billion to clients in the first three quarters.

The amounts were not wholly unexpected — founders Daniel A. D’Aniello, William E. Conway Jr. and David M. Rubenstein for years have been ranked by Forbes as among the wealthiest Americans.

Each founder earned $275,000 salary, a $3.54 million bonus and $134 million in income from his share of investors’ profits.

The company is expected to begin selling stock to the public later this year and will list itself on the Nasdaq tech index under the ticker CG.

“It basically shows how well they have done as investors,” said Colin Blaydon, director of the private equity center at the Tuck School of Business at Dartmouth. “Their compensation is performance-based, explicitly. And they are getting what their performance delivered. That’s my best take on it.”

The executives’ earnings become public during an election year in which many have attacked the growing income chasm between the nation’s wealthy and the middle and poorer classes. President Obama has used economic fairness as a mantra during debates with Republican lawmakers over raising taxes on the affluent to avoid budget cutbacks in crucial services for the needy and to push through an extension of the payroll tax credit and unemployment benefits. Occupy Wall Street demonstrators across the country have been protesting that too much of the country’s resources are held by the richest one percent of its citizens.

Carlyle’s numbers were filed on the day of the New Hampshire presidential primary. Republican candidate Mitt Romney, who earned a fortune in the buyout industry while an executive at Bain Capital, has been battling claims that is unfeeling and out of touch with most Americans.

Carlyle Group filed a 400-page document with the SEC in September as a prelude to the public offering. Tuesday’s filing is the latest in a series of amendments that illuminate the inner financial workings of the profitable private equity firm, which was founded in Washington in 1988.

The documents also show that Carlyle’s founders plowed much of their cash back into the firm’s deals. Conway, for example, last year invested $164 million of his own money into Carlyle investments.

The founders, who hold 60 percent of the company, have said they have no intention of leaving Carlyle in the near future, although the public offering allows them to eventually cash out billions.

Carlyle declined to comment on the founders’ earnings report.

The financial powerhouse is among the world’s largest private equity firms, with about $150 billion in assets under its control. Forbes magazine last year ranked the three founders among the richest people in the United State, worth an estimated $2.7 billion each.

Some of that money has found its way to various charities around the country. Rubenstein is the largest donor in the history of the Kennedy Center - where he is chairman of the board of trustees - having given the institution $25 million. Among his other gifts is a $10 million donation to the University of Chicago Law School for scholarships and a $21 million copy of the Magna Carta, which he loaned indefinitely to the National Archives.Conway has given away millions to the homeless and recently asked the public for input on how he should dispose of his fortune. D’Aniello has donated to several charities and institutions, including a library in Pittsburgh, where he grew up, and Syracuse University, where he helps sponsor an internship program for entrepreneurs.

Their wealth is not uncommon in the leveraged buyout industry. The Blackstone Group co-founder Stephen Schwarzman, whom Forbes estimates is worth $4.7 billion, earned about $400 million in 2006, the year before his company went public.

Henry Kravis and George Roberts, co-founders of buyout firm Kohlberg, Kravis, Roberts, are worth $3.7 billion and $3.4 billion respectively, Forbes estimates. David Bonderman of buyout firm TPG is worth $1.9 billion, according to Forbes.

The private equity business is built on buying companies, often with large amounts of debt, and then selling them in three to six years for big profits. The industry standard is for a private equity firm to charge up to a 2 percent management fee on the total amount of the funds and take 20 percent of any profits it earns.

That 20 percent, known as carried interest, is taxed at the capital gains rate of 15 percent instead of the higher income tax rate of 35 percent because the money is deemed to be a capital investment. Critics, including Obama, say the tax rate on carried interest should be higher, but efforts to raise it have been unsuccessful.

“A number of deals they’ve done over the years were sold in 2011, and because those deals worked out well, [the founders] carried interst was worth a lot last year,” said Steven N. Kaplan, finance professor at the University of Chicago Booth School of Business. “I would guess in 2009 they didn’t sell anything and they made far less.”

In the first six months of last year, the company’s profits were $770 million. The company earned about $1 billion in 2010.

It also has been profitable for global investors in Carlyle’s 84 funds, which own all or part of 270 companies and properties around the world, including Asian forests, a Brazilian lingerie firm, rental car company Hertz, Nielsen and rest stops along Connecticut highways.

Since its inception in 1987, the firm has generated a 31 percent annual return for those investors, which include pension funds, insurance companies, sovereign wealth funds and wealthy individuals, Carlyle officials have said.

Carlyle management fees were $483 million in the first six months of 2011 compared with $402 million for the same period in 2010, according to filings the company made with regulators last fall. Performance fees were $1.2 billion for the first six months of 2011 compared with $111 million in 2009, evidence that Carlyle has enjoyed a very successful year so far despite the gloomy economy.

Carlyle’s sale of shares to the public has been anticipated for years and follows two other major private equity rivals, the Blackstone Group and Kohlberg Kravis & Roberts.

Aside from its founders, the firm is owned by Mubadala, the investment arm for the emirate of Abu Dhabi, with nine percent, and California’s pension system, which owns five percent. Carlyle’s 100 partners own the remainder.

Obama still flush with cash from financial sector despite frosty relations

Πηγή: Washington Post
By Dan Eggen and T.W. Farnam

Oct 19 2011

Despite frosty relations with the titans of Wall Street, President Obama has still managed to raise far more money this year from the financial and banking sector than Mitt Romney or any other Republican presidential candidate, according to new fundraising data.

Obama’s key advantage over the GOP field is the ability to collect bigger checks because he raises money for both his own campaign committee and for the Democratic National Committee, which will aid in his reelection effort.

As a result, Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all the other GOP candidates combined, according to a Washington Post analysis of contribution data. The numbers show that Obama retains a persistent reservoir of support among Democratic financiers who have backed him since he was an underdog presidential candidate four years ago.

Obama’s fundraising advantage is clear in the case of Bain Capital, the Boston-based private equity firm that was co-founded byRomney and where he made his fortune. Not surprisingly, Romney has strong support at the firm, raking in $34,000 from 18 Bain employees, according to the analysis of data from the Center for Responsive Politics.

But Obama has outdone Romney on his own turf, collecting $76,600 from Bain Capital employees through September — and he needed only three donors to do it.

The battle for Wall Street cash has become a crucial subtext in the 2012 campaign, which is shaping up to focus heavily on federal banking and markets policies and the struggling economy. Top Republicans have openly courted major U.S. bank executives and financiers, arguing that Obama’s policies have hurt them, while Democrats are seeking to turn the erosion of support on Wall Street to their populist advantage.

Obama has fewer donors from the finance sector than Romney but is simply able to collect more money from each of them.

Obama’s ties to Wall Street donors could complicate Democratic plans to paint Republicans as puppets of the financial industry, particularly in light of the Occupy Wall Street protests that have gone globalover the past week. In response to the protests, the Obama campaign and other Democrats have stepped up their attacks onRomney and other Republicans for their opposition to Wall Street regulations.

One top banking executive who raises money for Obama and who requested anonymity to discuss fundraising efforts said reports of disaffection with the president “are exaggerated and overblown.” He said a strong contingent of financiers in New York, Chicago and California remain supportive of Obama and his economic policies, even as some have turned on him.

But, this donor added, “it probably helps from a political perspective if he’s not seen as a Wall Street guy.”

Romney spokeswoman Andrea Saul said Romney’s success in the financial sector is evidence of the business community’s confidence in him as well as its unhappiness with Obama.

Donors support Romney because of “the state of the economy and the president’s failure to create jobs,” she said. “President Obama and his campaign will say anything to distract voters from his failed economic record.”

Unlike the Republican candidates, Obama can raise money for both his own campaign account, which can take donations up to $5,000 for the 2012 cycle, and for his party’s national committee, which can accept $30,800 per individual each calendar year. The same donors will be able to give another $30,800 to the DNC next year.

The end result is more money from fewer donors in the finance business. Obama has raised a total of $15.6 million from employees in the industry, according to the Post analysis. Nearly $12 million of that went to the DNC, the analysis shows.

Romney has raised less than half that much from the industry, while Texas Gov. Rick Perry brought in about $2 million. No other Republican candidate has raised more than $402,000 from the finance sector, which also includes insurance and real estate interests.

Even so, Obama clearly has trouble appealing to Wall Street fundraisers, who have emerged in recent years as among the most important sources of campaign cash for major national politicians. Put aside the DNC money, for example, and Obama’s numbers look much worse: just $3.9 million from the financial sector, compared with Romney’s $7.5 million.

Obama’s campaign committee has raised notably less money from major banking firms such as Goldman Sachs, whose employees gave him more than $1 million in the 2008 cycle. So far this year, about two dozen Goldman employees together have given Obama’s committee about $45,000, one-sixth of the amount Romney’s campaign has taken in.

But six Goldman employees also gave a total of $92,000 to the DNC side of Obama’s fundraising effort.

Obama’s financial advantage is almost certain to narrow in the months ahead. Once chosen, a GOP nominee will be able to raise money jointly with the Republican National Committee.

Romney is particularly reliant on money from the finance sector, which accounts for about a quarter of his total contributions, the data show. By contrast, about 5 percent of the $90 million raised by Obama’s campaign committee this year came from finance and banking interests.

Obama retains a core group of supporters on Wall Street who are central to his fundraising efforts. About a third of Obama’s top 40 fundraisers, who have helped bundle together $500,000 or more in contributions, hail from the finance sector, including big names such as former New Jersey governor Jon Corzine of MF Global, hedge fund manager Orin Kramer and UBS executive Robert Wolf.

Obama’s chief of staff, William M. Daley, was also vice chairman at J.P. Morgan Chasebefore coming to the White House this year.

Obama’s support within the financial industry tends to be more diffuse than the top Wall Street firms. One of his top sources of cash, for example, is a small Chicago firm called Chopper Trading, which employs a technique of rapid, computer-assisted trading that some experts blame for high volatility in the stock market.

Employees of the company gave $222,000 to Obama after Vice President Biden held a fundraiser at the home of the company’s chief executive, Rajiv Fernando, a campaign bundler. The firm did not respond to a request for comment.

Obama aides regularly point to his $155 million joint fundraising total with the DNC as evidence of the campaign’s momentum but have tended to ignore DNC money when discussing Wall Street. In a memo issued Tuesday, for example, DNC spokesman Brad Woodhouse said Romney’s campaign “seems quite proud of the fact that they are leading the money race for campaign cash from Wall Street.”

Obama campaign spokesman Ben LaBolt said in a statement that contributions from the financial sector show that many corporate leaders agree with Obama on the need for “an economy that’s built to last, not on loopholes and outsourcing.”

“There are business leaders across industries who agree with the president that steps needed to be taken to ensure that the American people are never again held hostage by risky Wall Street deals that threaten our entire economy,” LaBolt said. “Mitt Romney and all the Republican candidates believe the opposite.”

Businesses Pledge to Fight Debt and Spending, Not Taxes

Πηγή: yahoonews

By William Browning

Fri Aug 26, 5:30 pm ET

Big corporations in the United States need to be careful what they wish for. Starbucks CEO Howard Schultz announced over 100 companies have pledged to withhold political donations until Congress and President Obama figure out how to solve the debt crisis.

There's only one problem with their plan. A compromise might include raising taxes on the rich. Many CEOs make over $250,000 per year , an income tax bracket targeted by President George W. Bush for tax relief in 2001. Obama wanted to increase taxes on the wealthiest two percent of Americans by letting the Bush-era tax cuts expire. Instead, Obama had to compromise as Republicans held jobless benefits hostage until he agreed to keep tax rates the same.

Now business leaders want politicians to solve the national debt. Their cry will be heard by both Democrats and Republicans. The GOP will say taxes need to be lower on these corporations, which means budget cuts will have to go deeper. Another solution would be across-the-board tax increases for all Americans instead of just singling out the rich. A third possibility means a combination of more taxes and less spending.

Everyone is fed up with partisan bickering in Washington. The pledge signed by business leaders means nothing as they can choose to contribute limitless amounts of campaign cash to any candidate they see fit. It will be interesting to see which side feels the most threatened by the pledge. Unlimited campaign funds seems to favor Republicans as Mitt Romney was given $1 million by a political action committee. The 2010 mid-term elections also favored much more money raised by GOP candidates.

There is also an advantage in campaign spending when it comes to Obama's run for re-election. He is an incumbent who doesn't need to fight opponents in his own party in a primary election. He can wait until August when a party nominee is decided by voters. If Republicans are already strapped for cash and corporations withhold even more until the debt crisis is solved, the primary season in January may be the key starting point for getting things done in Washington, D.C.

Voters will find out just how much the business pledge means when the Federal Election Commission publishes donations to each candidate every quarter. My bet will be GOP candidates will see a decrease or slow down in campaign finances. Grassroots campaigns may be back if candidates can't get as many donations from large companies.