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Sunday, January 15, 2012

Mitt Romney's Steel Dynamics Took Subsidies Not Once, But Twice, Under Bain's Ownership

Mitt Romney touts the virtues of free markets and the dangers of government intervention, yet when Bain Capital became the largest owner of Steel Dynamics in 1994, the company was already looking for state and local incentives for its first plant in DeKalb County, Indiana, according to the Los Angeles Times (h/t Jed Lewison). The same month Bain invested $18.2 million in the company, June 1994, state and local governments in Indiana approved a $77.84 million incentive package after months of negotiations with the company (Fort Wayne Journal Gazette June 23, 1994, via Nexis, h/t Phil Mattera).

The Steel Dynamics subsidy story doesn't end there, however. Four years later, while still owned by Bain Capital, the company got $18 million in local tax incentives for a structural steel mill in Whitley County, Indiana (AP State & Local Wire, October 21, 1998, via Nexis).

Even after Bain cashed out with an $85 million profit, the company continued its subsidy seeking ways, getting state tax incentives and training grants for an expansion in Indiana in 2005 (M2 EquityBites, December 1, 2005, via Nexis), a $52,886 property tax break in Continental, Ohio, in 2007 (Toledo Business Journal, February 2007, via Nexis), and other deals.

The Bain Capital subsidy saga does not end with Steel Dynamics. Phil Mattera of Good Jobs First has the best rundown, covering a total of nine companies Bain owned, including Sealy Mattress, which received $600,000 to move from Ohio to North Carolina.

As Jed Lewison points out, when Romney talks about "crony capitalism," he ought to be talking about himself. Steel Dynamics has from its outset been a subsidy-generating machine, and Bain dove right into it.

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