Romney, Fiorina, Trump: who did the most harm?

Last week a friend of mine wondered out loud who ruined more lives—Donald Trump, Carly Fiorina or Mitt Romney?

After doing a little Internet research, I would say—probably Mitt Romney, possibly Carly Fiorina, but not Donald Trump.

Mitt Romney was CEO of an investment firm called Bain Capital.  It started out in 1984 as a venture capital firm; its most successful investment was the Staples chain of office supply stores.

But from 1989 to 1999, it adopted a new strategy—borrowing money to buy existing companies, saddling the companies themselves with the debt while meanwhile giving Bain big consulting fees.

Some of the companies collapsed under the burden of debt, some survived.  Having to service a big debt obligation probably tipped many into failure.  Nobody would argue that it helped.  But Romney and the other Bain partners did well whether the companies succeeded or not.

Carly Fiorina became head of Hewlett-Packard in 1999.   Her most notable accomplishment was aquisition of Compaq Computer, which by most accounts didn’t pay off.  The H-P board of directors fired her in 2005.

The Boston Globe estimated that 30,000 employees were laid off during her tenure.  On the other hand total jobs at H-P when she left were roughly equal to the combined H-P and Compaq employment in 2009.

Donald Trump took his companies into bankruptcy—that is, reorganization under Chapter 11 of the U.S. Bankruptcy Code—four times.  These were Trump Taj Mahal in 1991, Trump Plaza Hotel in 1992, Trump Hotels and Casino Resorts in 2004 and Trump Entertainment Resorts in 2009.

In each of these reorganizations, Trump took a loss and gave up control.   The businesses continued, and evidently there weren’t any big layoffs at the time.   Trump Taj Mahal filed again for bankruptcy last year, but Trump no longer controls it.

Donald Trump

Going into Chapter 11 is nothing for a CEO to be proud of, but Trump himself paid a price for his failure, which is more than Romney did with the failed Bain ventures nor Fiorina with Hewlett-Packard.

I am not a supporter of Donald Trump.  I think casino gambling is a sleazy business.  I think there are questions to be raised about Trump’s connections with organized crime.  But I think he has done less harm than either Romney or Fiorina.

LINKS

Greed and Debt: the True Story of Mitt Romney and Bain Capital by Matt Taibbi for Rolling Stone (2012)

Romney’s Tenure at Bain Was Defined By Layoffs, Bankruptcies, Outsourcing by ENEWSPF in Park Forest, Illinois. (2012)

Can a CEO Who Laid Off Thousands, Botched a Merger and Left with $21 Million Become President? by David Corn for Mother Jones.

HP Layoffs an issue in Carly Fiorina’s GOP campaign by Annie Linskey for The Boston Globe.

The Backstory on Donald Trump’s Four Bankruptcies by Emily Stewart for The Street.

Donald Trump v. Carly Fiorina: Who Was the Worst CEO? by Charles Gasparino for The Daily Beast.

How Close Was Donald Trump to The Mob? by David Marcus for The Federalist.

Tags: Bain Capital, Bankruptcies, Carly Fiorina, Donald Trump, Hewlett-Packard, Layoffs, Mitt Romney, Outsourcing