Romney Lacks Credibility to Attack Crony Capitalism

At Thursday night's GOP presidential debate in South Carolina, Mitt Romney rightly attacked Barack Obama on the issue of crony capitalism. As noted by NBC's Mark Murray:

And Romney adopts the Palin/Perry "crony capitalism" line against Obama, and dings president on Keystone

Good for him!

Unfortunately, Romney's history shows that he lacks the credibility to make this a real issue during the general election. While serving as the Governor of Massachusetts, Mitt Romney handed over $4.5 million in state government money to cronies of his very own, for companies that failed. Via the Boston Herald (emphasis):

GOP presidential hopeful Mitt Romney has hammered President Obama for his administration’s tax-funded investment blunders — but when Romney was governor, the state handed out $4.5 million in loans to two firms run by his campaign donors that have since defaulted, leaving taxpayers holding the bag.

The two companies — Acusphere and Spherics Inc. — stiffed the state on nearly $2.1 million in loans provided through the state’s Emerging Technology Fund, a $25 million investment program created while Romney was governor in 2003 that benefited 13 local firms.

Acusphere, a biotechnology firm headed by a Romney campaign donor, got $2 million in 2004 that it was supposed to put toward a $20 million manufacturing facility in Tewksbury, which never became fully operational. Calls to Acusphere’s headquarters in Lexington were not returned...

Spherics Inc., meanwhile, was lured from Rhode Island to Mans–field with much fanfare from the Romney administration, partly through a $2 million loan in 2005. By 2008, the company laid off all employees and completely shut down. The state received about $300,000 when the company liquidated its assets, but the firm defaulted on more than $1.5 million of the state loan, Abbruzzese said.

Together, the two companies’ investors and executives donated more than $7,000 to Romney’s past campaigns.

The hypocrisy didn't go unnoticed by a pro-Obama Super PAC called "American Bridge." NBC's Domenico Montanaro reports:

Democratic-aligned Super PACs are going after Mitt Romney on what they depict as essentially his own Solyndra, a further sign that Democrats see the writing on the wall and that they believe Romney will be President Obama's opponent this fall.

A video produced by American Bridge, called “Romney’s energy loan hypocrisy,” hits Romney for loans made while he was governor of Massachusetts to two companies that eventually failed or moved away – and had ties to Romney campaign donors.

They certainly didn't do a very good job of exonerating Obama, but I digress.

Couple this information with what we already know about Romney's inclination to grow and link government with certain businesses. As Timothy Carney wrote in the Washington Examiner last May:

Examine Romney's dalliances with big government that have caused him such grief, and you'll see a trend: They all are described as "pro-business," they all amount to corporate welfare, and they all reflect the technocratic mind-set you'd expect of a business consultant. Romney's record and rhetoric show how managerialism veers away from the free market and into corporatism.

Begin with health care. Romney last week defended his Obamacare prototype in Massachusetts by pointing to the findings of a think tank that was "funded by business." In a similar vein, the Boston Globe attacked Romneycare's critics in an April editorial: "if they weren't hyperventilating about the national law, they might come to recognize that the role Romney played on the state level was skillful, creative, and business-friendly."

Yes, the legislation was business-friendly -- in a big-government way: It required individuals to buy health insurance, and it provided taxpayer subsidies for health insurance, helping insurers and employers at the expense of taxpayers and patients...

Romney didn't compete for business through lower taxes and regulation: He tried to entice them to the state with special subsidies. In 2005, Romney lured Spherics, a pharmaceutical company, away from Rhode Island by offering a $2.5 million direct loan from the state's "Emerging Technology Fund." That same year, he signed a bill creating the Massachusetts Film Office that was empowered to hand out special tax credits to studios filming movies in the Bay State.

Romney's corporatism isn't limited to the state level. In his 2010 book "No Apology," he lays out a national energy plan including more federal funding for energy research and supporting subsidies for "infant industries." He has supported that favorite of Iowa caucus-voters, ethanol subsidies.

On one hand, it's great that Romney is going after Obama for his crony dealings, failed energy policies, and kowtowing to special interests. On the other, how is he going to make the case against Obama during a general election when the president's supporters (as they already have done) can point right back at Romney and invoke rule #4 in Alinsky's book? Mitt Romney needs to ensure the country that he will not partake in crony capitalism on a national level, if he is elected as the GOP nominee. For now, his record indicates that he lacks the credibility to do so.

Peter Schweizer Exposes More of Obama's Green Corruption

Yesterday, I posted a piece about this weekend's episode of 60 Minutes on CBS which will highlight insider trading on Capitol Hill and showcases the new book written by Governor Palin's adviser, Peter Schweizer.

Today, Schweizer released an excerpt from his new book that will also be available in this weeks edition of Newsweek. In this portion, he goes far beyond the the Solyndra scandal and gives Americans a detailed picture of just how the Obama administration operates, and how they manage to hand over BILLIONS of tax dollars to cronies for political kickbacks. He writes:

Where did green-energy cash go? Straight to campaign donors. Read more about Peter Schwiezer’s Throw Them All Out in the new Newsweek on sale Monday.

When President-elect Obama came to Washington in late 2008, he was outspoken about the need for an economic stimulus to revive a struggling economy. He wanted billions of dollars spent on “shovel-ready projects” to build roads; billions more for developing alternative-energy projects; and additional billions for expanding broadband Internet access and creating a “smart grid” for energy consumption. After he was sworn in as president, he proclaimed that taxpayer money would assuredly not be doled out to political friends. “Decisions about how Recovery Act dollars are spent will be based on the merits,” he said, referring to the American Recovery and Reinvestment Act of 2009. “Let me repeat that: decisions about how recovery money will be spent will be based on the merits. They will not be made as a way of doing favors for lobbyists.”

Really?

It would take an entire book to analyze every single grant and government-backed loan doled out since Barack Obama became president. But an examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies. The grants were earmarked for alternative-fuel and green-power projects, so it would not be a surprise to learn that those industries were led by liberals. Furthermore, these were highly competitive grant and loan programs—not usually a hallmark of cronyism. Often fewer than 10 percent of applicants were deemed worthy.

Nevertheless, a large proportion of the winners were companies with Obama-campaign connections. Indeed, at least 10 members of Obama’s finance committee and more than a dozen of his campaign bundlers were big winners in getting your money. At the same time, several politicians who supported Obama managed to strike gold by launching alternative-energy companies and obtaining grants. How much did they get? According to the Department of Energy’s own numbers … a lot. In the 1705 government-backed-loan program, for example, $16.4 billion of the $20.5 billion in loans granted as of Sept. 15 went to companies either run by or primarily owned by Obama financial backers—individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party. The grant and guaranteed-loan recipients were early backers of Obama before he ran for president, people who continued to give to his campaigns and exclusively to the Democratic Party in the years leading up to 2008. Their political largesse is probably the best investment they ever made in alternative energy. It brought them returns many times over.

These government grants and loan guarantees not only provided access to taxpayer capital. They also served as a seal of approval from the federal government. Taxpayer money creates what investors call a “halo effect,” in which a young, unprofitable company is suddenly seen to have a glowing future. The plan is simple. Invest some money, secure taxpayer grants and loans, go public, and then cash out. In just one small example, a company called Amyris Biotechnologies received a $24 million DOE grant to build a pilot plant to use altered yeast to turn sugar into hydrocarbons. The investors included several Obama bundlers and fundraisers. With federal money in hand, Amyris went public with an IPO the following year, raising $85 million. Kleiner Perkins, a firm that boasts Obama financier John Doerr and former vice president Al Gore as partners, found its $16 million investment was now worth $69 million. It’s not clear how the other investors did. Amyris continues to lose money. Meanwhile, the $24 million grant created 40 jobs, according to the government website recovery.gov.

[...]

The Government Accountability Office has been highly critical of the way guaranteed loans and grants were doled out by the Department of Energy, complaining that the process appears “arbitrary” and lacks transparency. In March 2011, for example, the GAO examined the first 18 loans that were approved and found that none were properly documented. It also noted that officials “did not always record the results of analysis” of these applications. A loan program for electric cars, for example, “lacks performance measures.” No notes were kept during the review process, so it is difficult to determine how loan decisions were made. The GAO further declared that the Department of Energy “had treated applicants inconsistently in the application review process, favoring some applicants and disadvantaging others.” The Department of Energy’s inspector general, Gregory Friedman, who was not a political appointee, chastised the alternative-energy loan and grant programs for their absence of “sufficient transparency and accountability.” He has testified that contracts have been steered to “friends and family.”

Friends indeed. These programs might be the greatest—and most expensive—example of crony capitalism in American history. Tens of billions of dollars went to firms controlled or owned by fundraisers, bundlers, and political allies, many of whom—surprise!—are now raising money for Obama again

There will be a lot of revelations coming out in Schweizer's new book, which hits shelves this Tuesday. For now, you can read the entire released excerpt here.

GOP Candidates Endorse Governor Palin

Some of them endorsed her ideas and words anyway...

For instance, during the GOP debate Monday night in Tampa, Peter Hamby tweeted the following:

Bachmann team sends out press release hitting Perry's "crony capitalism" cc @SarahPalinUSA

After the debate, Michele Bachmann appeared On The Record with Greta Van Sustren, stating the following, as Molly Ball reported:

“This is what the American people don’t want. They don’t want crony capitalism. It infuriates them,” she said, drawing a parallel with Obama’s Solyndra controversy. “It’s no better when Republicans engage in that as well,” she said.

Newt Gingrich also embraced Governor Palin's message of reform and against crony capitalism on Greta's show, saying:

I do want to say by the way, that Governor Palin's speech in Iowa last weekend on crony capitalism and on the problems of both parties, is a very very important speech. I'm going to be tweeting a link to it. I'm also going to be doing some other things with it. I think it was maybe one of the most important speeches she's ever given. And I think it raised a series of very profound questions that all of us, Democrat and Republican, have to wrestle with as citizens. And she did it very well. It's a very very impressive speech.

So impressive that Rick Perry borrowed some of the words from Governor Palin speech in an op-ed he penned for USA Today on Monday. He wrote:

We must have a frank, honest national conversation about fixing Social Security to protect benefits for those at or near retirement while keeping faith with younger generations, who are being asked to pay.

From the governor's speech in Iowa:

The status quo is no longer an option. Entitlement reform is our duty now, and it must be done in a way that honors our commitment to our esteemed elders today, while keeping faith with future generations.

I sincerely doubt that any of these candidates would be talking about crony capitalism before the governor gave that speech in Iowa. Whether she's defining the debate, or helping candidates learn how to talk, Governor Palin is shaping the primary race just by sharing her opinion on the issues that effect this nation. The candidates are certainly following her lead, and I commend them for doing so.

Governor Palin understands that she's having an effect on the race, as she stated on Monday (also on Greta's show):

"I’m getting kind of a kick out of … getting out there, giving a speech, making some statements about things that must be discussed and then the very next day watching some of the candidates get up there and discuss what it was that we just talked about, like the corruption, the crony capitalism, the waste, the fraud – some of those things that are going on right now. It’s like, come on, candidates, it’s about time you started talking about that!"

The Glaring Differences Between Palin & Perry

After his announcement last weekend, Rick Perry's record has come under considerable scrutiny from the media and the blogs. One of the most notable items of discussion has been about an executive order that Perry signed, mandating young girls to receive the HPV vaccine known as Gardasil. It was so controversial that the Texas State Legislature stepped in and repealed the law just weeks after Perry had pushed it through.

Tuesday evening, Michelle Malkin published a very detailed column about Perry's Gardasil mandate. She wrote:

In February 2007, Texas Gov. Rick Perry signed a shocking executive order forcing every sixth-grade girl to submit to a three-jab regimen of the Gardasil vaccine. He also forced state health officials to make the vaccine available “free” to girls ages 9 to 18. The drug, promoted by manufacturer Merck as an effective shield against the sexually transmitted human papillomavirus (HPV) and genital warts, as well as cervical cancer, had only been approved by the Food and Drug Administration eight months prior to Perry’s edict.

Gardasil’s wear-off time and long-term side effects have yet to be determined. “Serious questions” remain about its “overall effectiveness,” according to the Journal of the American Medical Association. Even the chair of the federal panel that recommended Gardasil for children opposes mandating it as a condition of school enrollment. Young girls and boys are simply not at an increased risk of contracting HPV in the classroom the way they are at risk of contracting measles or other school-age communicable diseases.

Perry defenders pointed to a bogus “opt-out” provision in his mandate “to protect the right of parents to be the final authority on their children’s health care.” But requiring parents to seek the government’s permission to keep an untested drug out of their kids’ veins is a plain usurpation of their authority. Translation: Ask your bureaucratic overlord to determine if a Gardasil waiver is right for you.

Libertarians and social conservatives alike slammed Perry’s reckless disregard for parental rights and individual liberty. The Republican-dominated legislature also balked. In May 2007, both chambers passed bills overturning the governor’s unilaterally imposed health order.

Fast-forward five years. After announcing his 2012 presidential bid this weekend, Perry now admits he “didn’t do my research well enough” on the Gardasil vaccine before stuffing his bad medicine down Texans’ throats. On Monday, he added: “That particular issue is one that I readily stand up and say I made a mistake on. I listened to the legislature … and I agreed with their decision.”

Perry downplayed his underhanded maneuver as an aberrational “error,” and then — gobsmackingly — he spun the debacle as a display of his great character: “One of the things I do pride myself on, I listen. When the electorate says, ‘Hey, that’s not what we want to do,’ we backed up, took a look at what we did.”

Are these non-apology apologies enough to quell the concerns of voters looking for a presidential candidate who will provide a clear, unmistakable contrast to Barack Obama? Not by a long shot.

There is a ton of information in Malkin's piece and she went to great lengths to link all of her research. I strongly recommend reading the entire column if you have not so already.

While Rick Perry's executive order to mandate vaccines for children is raising eyebrows in the Republican party, I think it would serve us to take a look at what Governor Palin has said on the record about a state government taking such action.

Located within the mountain of emails that were released months ago from Governor Palin's time in office, is a small quote from her that sums up her philosophy about the government's role in such matters. She wrote this in response to an email from her staff in 2008 about chicken-pox immunization regulations:

"I would not propose govt mandating anything like shots for our kids."

I never questioned for a moment whether or not Governor Palin would have done something akin to what Perry did in Texas with Gardasil. That's the luxury of being a Palin supporter. We know her philosophy and we know she's remained steady in her belief of limited government. We also know that she never governed for the benefit of any cronies.

The more I read about Rick Perry, the more I see in him what Governor Palin fought so hard against in Alaska. The Gardasil issue is just one instance in many that it appears Rick Perry put the interests of his financial backers above those of his constituents.

Timothy Carney wrote an eye-opening article for the Washington Examiner called "The cowboy corporatist rides to the rescue." In it, he details some of the other recipients of Perry's 'assistance' after donating money to his political operation. Carney writes:

In his next State of the State address, Perry pushed the Legislature to create the Texas Enterprise Fund, giving the governor, lieutenant governor and House speaker the power to hand out multimillion-dollar grants to businesses seeking to relocate to or expand within the state. Two years later, Perry and the Legislature created another subsidy bank, called the Texas Emerging Technology Fund, using taxpayer money to invest in high-tech companies. Perry made government a venture capital fund.

Muckrakers at the Los Angeles Times and the Austin American Statesman have shown a strong correlation between Perry's biggest campaign contributors and the money handled by these funds and Perry's other public-private partnership. Almost half of Perry's "mega-donors," according to the Times, have received profitable favors from the Texas government. Poultry magnate Joe Sanderson, for instance, gave Perry's campaign $165,000 and received $500,000 from the Texas Enterprise Fund to open a facility in Waco, the Times reports.

The Austin paper documents the unsavory case of $80,000 Perry donor David Nance winning a $4.5 million grant from the Texas Emerging Technology Fund. A regional board had denied the grant to Nance's Convergen LifeSciences, but Perry intervened and ushered the grant through.

And just as President Obama uses renewable energy as an excuse for steering taxpayer money to big business, Perry also loves green corporate welfare. Perry was a featured speaker at the national wind lobby's 2008 conference, where he touted his 2005 law requiring Texans to purchase wind and solar energy -- all in the name of "job creation" and business growth. If you force people to buy a product, of course the businesses selling that product will grow.

How the conservative establishment plans on selling this guy as a bridge between the Tea Party and the GOP establishment, through the duration of the primary campaign is beyond me. Rick Perry's views on the role of government and corporate welfare fly in the face of Tea Party values. Padding one's political piggy bank with the money of people and entities who expect a much larger return on their "investment" is an abuse of the system. The idea that taxpayers go into debt paying out large sums to these "investors" to keep elected officials in their seats of power, is not the sort of behavior you will find any Tea Party activist supporting.

Governor Palin's history of service stands in direct contrast to most politicians, including Rick Perry's. She went against the grain of the deep-rooted corruption in Alaska, and even in her own party. She was independent enough to call out those who were abusing the system, and taking a strong stand against them. The only "interests" that Governor Palin focused on, were those of her constituents. That includes respecting their personal liberty by not "mandating anything like shots" for their children.