Wednesday, September 26, 2012

Romney Firm Invested In Chinese Company That Touted Low Wages, Low Tax Liability To Investors


A firm run by Republican presidential nominee Mitt Romney invested in a Chinese company just a week after it touted the low wages it paid its employees, stringent working conditions, and the low tax liability it faced compared to American companies in a document to investors.
Romney has gotten tough on the Chinese government on the campaign trail, but in 1998, Brookside Inc., a subsidiary of Bain Capital, invested in Global-Tech Appliances days after it sent investors a document detailing the low wages it paid its workers and the low tax liability it faced, the Boston Globe reports:
It used “inexpensive labor,” Global-Tech Appliances wrote in a prospectus meant to attract investors on April 8, 1998. Its location in China meant “an overall effective tax rate that may be less than that of US corporations.” It said its current operations would not be subject to “material US taxes because it should not be considered to have significant income effectively connected with a trade or business in the US.” [...]
Nine days after the document was released – on April 17, 1998 — an affiliate of Bain Capital called Brookside Capital Partners Fund acquired about 6 percent of Global Tech, according to Securities and Exchange Commission documents that were first reported by Mother Jones magazine.
A leaked video from a Romney fundraiser showed the candidate giving an account of a trip to China to visit a factory in which Bain considered investing. Romney talked of the long hours worked by teenage girls who lived in dormitories on the premises and earned low wages. Spokespersons for both the Romney campaign and Bain Capital declined to comment for the Globe’s story.
Mother Jones reported in July that Global-Tech also depended heavily on the outsourcing of American jobs to China. Romney has blasted that practice on the campaign trail, but as the chief executive at Bain, he routinely oversaw the outsourcing of jobs to China and other low-wage countries. Investment documents released in August also detailed an investment into a company that is outsourcing jobs to China and forcing American workers to train their replacements.

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