In 1983, Bill Bain asked Mitt Romney to launch Bain Capital, a private equity offshoot of the successful consulting firm Bain & Company. After some initial reluctance, Romney agreed. The new job came with a stipulation: Romney couldn’t raise money from any current clients, Bain said, because if the private equity venture failed, he didn’t want it taking the consulting firm down with it.
When Romney struggled to raise funds from other traditional sources, he and his partners started thinking outside the box. Bain executive Harry Strachan suggested that Romney meet with a group of Central American oligarchs who were looking for new investment vehicles as turmoil engulfed their region.
Romney was worried that the oligarchs might be tied to “illegal drug money, right-wing death squads, or left-wing terrorism,” Strachan later told a Boston Globe reporter, as quoted in the 2012 book “The Real Romney.” But, pressed for capital, Romney pushed his concerns aside and flew to Miami in mid-1984 to meet with the Salvadorans at a local bank.
It was a lucrative trip. The Central Americans provided roughly $9 million — 40 percent — of Bain Capital’s initial outside funding, the Los Angeles Times reported recently. And they became valued clients.
“Over the years, these Latin American friends have loyally rolled over investments in succeeding funds, actively participated in Bain Capital’s May investor meetings, and are still today one of the largest investor groups in Bain Capital,” Strachan wrote in his memoir in 2008. Strachan declined to be interviewed for this story.
When Romney launched another venture that needed funding — his first presidential campaign — he returned to Miami.
“I owe a great deal to Americans of Latin American descent,” he said at a dinner in Miami in 2007. “When I was starting my business, I came to Miami to find partners that would believe in me and that would finance my enterprise. My partners were Ricardo Poma, Miguel Dueñas, Pancho Soler, Frank Kardonski, and Diego Ribadeneira.”
Romney could also have thanked investors from two other wealthy and powerful Central American clans — the de Sola and Salaverria families, who the Los Angeles Times and Boston Globe have reported were founding investors in Bain Capital.
While they were on the lookout for investments in the United States, members of some of these prominent families — including the Salaverria, Poma, de Sola and Dueñas clans — were also at the time financing, either directly or through political parties, death squads in El Salvador. The ruling classes were deploying the death squads to beat back left-wing guerrillas and reformers during El Salvador’s civil war.
The connection between the families involved with Bain’s founding and those who financed death squads was made by the Boston Globe in 1994 and the Salt Lake Tribune in 1999. This election cycle, Salon first raised the issue in January, and the Los Angeles Times filled out more of the record earlier this month.
There is no shortage of unsavory links. Even the Tribune article referred to by the Romney campaign reports that “about $6.5 million of $37 million that established the company came from wealthy El Salvadoran families linked to right-wing death squads.”