WASHINGTON (AP) — As Bain & Co. head in the early 1990s, Mitt Romney presided over the corporate strategy firm's expanding operations into China and Russia, helping their initial attempts to move into the world's free market system.
Bain's expansion abroad under Romney's leadership came at the same time he was rescuing the firm from an internal financial crisis. Now, almost 20 years on, the Republican presidential nominee views those two countries with suspicion.
In his campaign, China and Russia are prime targets for criticism. Romney says China is an unfair economic competitor and should be charged with currency manipulation. Russia, he says, is "our No. 1 geopolitical foe."
In 1993, under Romney's oversight, Bain branched out in Beijing, where the firm's consultants held a series of management seminars for Chinese government trade officials, according to documents, interviews and media accounts. At the same time, Bain consultants were advising Russian officials and conducting seminars to aid the post-Soviet business privatization campaign, according to State Department files.
Bain joined a 1990s gold rush of U.S. consulting companies that tutored emerging post-Communist nations in Western management structure and strategy. Former U.S. diplomats and experts in the Chinese and Russian economic systems say Bain's involvement came at a critical point when both governments sought Western intervention to absorb fundamentals of capitalism.
"The Chinese got a lot of advice from a wide array of U.S. consulting shops and it had a significant impact on China's ability to develop a more efficient market-oriented economy," said Kenneth G. Lieberthal, a veteran China expert at the Brookings Institution. "The consultants were all trying to get in on the ground floor and build relationships with the government."
How useful Bain was to China and Russia in that early period is not easy to assess, mostly because of similar roles played by other strategists and a lack of details about Romney's precise role and the advice provided by his consultants. Both Bain & Co. and the Romney campaign declined to disclose specifics about Romney's involvement and the company's performance. Chinese government officials were unavailable to comment on their dealings with Bain.
Romney has not talked publicly about Bain's expansion into China and Russia or his oversight of the firm's moves there. In his book, "No Apology," Romney describes China's economic success as "free enterprise on steroids." During the campaign, he castigated Chinese "cheating" on trade, and accused Beijing of cyberspying and intellectual property piracy. He also warned of the economic leverage posed by Russia's exploitation of its natural resources.
Although it is not clear whether Bain's 1990s work abroad conflicted with Romney's current stances, Bain's presence in both nations could complicate Romney's foreign policy critique that President Barack Obama has shown weakness in economic and political dealings with the two powers.
"It seems a little hypocritical to be developing economic connections with the Chinese and helping them move into the private sector, then turning around years later and assaulting Obama for being weak on China," said former Tennessee Sen. Jim Sasser, a Democrat who was the Clinton administration's ambassador to China in the mid-1990s.
Bain & Co. is a separate operation from its spinoff, Bain Capital, the private equity investment company founded by Romney that has drawn fire for mass layoffs and overseas job shifts at some of the companies it bought. Romney was a Bain & Co. executive until 1984, when he left to start Bain Capital. He returned to Bain & Co., announced in January 1991 as chairman and chief executive, to rescue the firm from financial turmoil. He negotiated a settlement involving Bain partners, the firm's lenders and federal bank deposit insurers.
Romney campaign spokeswoman Michele Davis would not respond to detailed questions about Romney's oversight of Bain & Co.'s consulting work. She disputed the timing of his departure, saying it came in 1992 rather than a year later. Davis said Romney concentrated on working "intensely to turn around the firm." She added that "no individual businessman can level the playing field with China."
The Romney campaign did not provide any records to buttress its timeline. Corporate documents and media accounts reviewed by The Associated Press from the period, however, show Romney held a top role at Bain & Co. through late 1993.
At least seven Securities and Exchange Commission filings from May to December 1993 by Marriott International, Inc., where Romney served as a director, listed him as "chief executive officer of Bain & Company, Inc." A 1998 Sports Authority SEC filing said Romney was Bain's CEO and chairman to 1993 and a director to 1998. A March 1993 federal credit document obtained by Rolling Stone magazine listed him as Bain's "principal." A Boston Herald news story written in October 1993 by current Romney senior adviser Eric Fehrnstrom described him as Bain's chairman and former CEO.