Vice President Joe Biden recently made the claim that Mitt Romney received a “federal bailout” for Bain & Company, costing “the government and American taxpayers $10 million,” but as the Washington Post reported, Biden’s assertion that the deal cost taxpayers millions of dollars is false since the money came from an institution that does not utilize taxpayer funding.
Biden’s claim stemmed from a recent Rolling Stone report that said “Romney was willing to go to extremes to secure a federal bailout to serve his own interests” in Bain & Company.
In 1990, Romney led the restructuring of Bain & Company, from which Bain Capital spun off in the 1980s. Bain & Company developed problems after the partners drained $200 million of borrowed money from the firm.
The Federal Deposit Insurance Corp. was involved in the loan restructuring since it assumed the Bank of New England, to which Bain & Company owed $38 million. The Boston Globe reported in 1994 that the FDIC agreed to lower the amount owed by $10 million, but the FDIC, a government agency, notably does not utilize taxpayer funding and instead is financed through deposit insurance payments, which negates Biden’s claim that the restructuring cost taxpayers millions of dollars.
In the 1994 Massachusetts Senate race, Romney’s opponent, Sen. Ted Kennedy, considered using this line of attack against Romney in an ad but never released the TV spot “because it turned out to be unnecessary,” Politico reported in July.
ABC News’ White House Correspondent Jake Tapper raised Biden’s inaccurate claim during an ABC News/Yahoo! News interview when he asked Obama campaign officials if making false assertions undermines the Obama campaign’s argument that the Romney team is telling lies.
“When it came to a challenge for the firm of himself and his partners he went to the federal government, to the FDIC, to get a bailout. So I think we try very hard,” press secretary Ben LaBolt said.
“But that’s not taxpayer funds, the FDIC,” Tapper responded.
Deputy campaign manager Stephanie Cutter noted the FDIC is “taxpayer guaranteed.”
“I understand the conversation that we’re having about whether campaigns sometimes bend the truth. And we try very hard to get it right. As opposed to the Romney campaign, who’ve said they’re not going to run their campaign based on fact checks, which means facts don’t matter to them. We do care about fact checks. We do care about the honesty of our ads,” Cutter said.
“I think all of the examples you’ve brought up — the FDIC bailout — we presented the facts. We made our case. We — we did everything we can that they’re accurate claims,” Cutter later added.