DERRY, NH -- With just hours to go before voting begins in the New Hampshire primary, Newt Gingrich is taking an extraordinary gamble, betting that Republican voters who once rejected his critique of Mitt Romney's business record will change their minds when they learn more about what Romney actually did in the 1980s and 1990s as head of Bain Capital.
"I don't think a Milton Friedman or a Hayek would say to you, rich guys have to go and rip off companies and leave a wreckage behind," Gingrich said in an interview after a town hall appearance here Sunday night. "I think that's plundering. I don't think that's capitalism."
Gingrich has staked his hopes in large part on the story of struggling steel companies taken over by Bain in the '90s. The industry was suffering devastating losses to foreign competition at the time, and after buying the companies Romney and Bain tried to refocus their strategy and institute new efficiencies. They also greatly increased the companies' debt and paid themselves tens of millions of dollars in dividends. Their efforts failed amid bitter conflict with the companies' unions, and the companies declared bankruptcy in 2001. Hundreds of workers lost their jobs, retirees lost benefits, and the federal Pension Benefit Guaranty Corporation had to cover some of the failed companies' pension costs. (The story was told a few days ago in a detailed article by Reuters, which Gingrich has repeatedly mis-identified as the New York Times.)
One of the failed companies involved was in South Carolina -- a fact sure to be highlighted by Gingrich as that state's primary approaches on January 21.
The steel story is one of several told in a new video that will be released by the pro-Gingrich super PAC Winning Our Future, which received a $5 million donation a few days ago from Las Vegas gambling mogul Sheldon Adelson. "I have not seen the film, although I'm told it's very effective," Gingrich said Sunday.
Targeting Romney's business record is an enormous risk for Gingrich because in the past Republicans have approved of Romney's success in the marketplace. Back in December, when Romney criticized payments Gingrich received from Freddie Mac, Gingrich shot back, "If Gov. Romney would like to give back all of the money he's earned from bankrupting companies and laying off employees over his years at Bain, then I would be glad to listen to him." Gingrich ran into a buzzsaw of criticism from Republicans, who saw his remarks as questioning the very risk-and-reward foundation of capitalism. Gingrich had to beat a quick retreat. "There was a very brief moment where, frankly, he got under my skin and I responded in a way that made no sense," Gingrich told Fox News. "I've said publicly he is a good manager, he is a good business manager. He got that round. If you are scoring rounds in boxing I will give that round to Mitt."
In the interview Sunday, I asked Gingrich why, after that failure, he would try again to criticize Romney's business record. This time, Gingrich was careful to try to distinguish between the kind of risk-taking capitalism that Republicans admire and what he called "looting" of companies. "There is a huge difference between free-market capitalism that goes out and creates companies, grows jobs, and takes an appropriate profit, which can be quite large -- I mean, Bill Gates has done fine," Gingrich said. "It even makes sense to have companies that go out and re-organize inefficient companies and end up making very substantial profits out of doing it…What you have to question is if somebody went out and looted a company, leaving behind a shell." If the Reuters report is accurate, Gingrich said, "Bain Capital actually makes a huge amount of money while cratering the company -- I think you have to question whether that's a very defensible form of capitalism."
"I don't want to pre-judge Romney," Gingrich said. But "you can't have capitalism on the way up and socialism on the way down. You can't have somebody who says, I'm so smart, I want a huge upside, and by the way I'm so smart you're going to get ripped off while I get a huge upside."
"If these things all turn out to be relatively valid," Gingrich continued, referring to the case made against Romney in the new video, "at some point in the near future, he's going to have to do a press conference just on Bain…I think he has to come in at some point and say these were companies we were involved in, this is the actual cash flow of these companies, and this is how it happened. Which is inevitably going to lead to questions about records that he apparently doesn't want to release and conversations he's not going to be able to avoid."
I asked Gingrich whether he was suggesting the Romney release his tax records. Gingrich demurred, but he said he has ordered his staff to pull his own tax records out of storage and begin preparing them for release in anticipation of a battle that focuses on each man's finances. "We pulled them out and we're having our guys go through them, because we want to make sure we put them in order," Gingrich said. "We're getting them in order to potentially release them." Gingrich said he will release his tax returns if he is the Republican nominee and "may" release them earlier.
Romney has not said he will release his tax returns. "I have never seen any candidate at a senior level successfully hide their taxes," Gingrich said of Romney. "It's just not possible. So presumably, if there's nothing there to bother him, he should release them. If there's something there to bother him, it should probably bother every Republican in the country. Because what you don't want to do is have him get to be the nominee and then have them released in September."
Gingrich said in the end, Romney will simply have to release more information about his business career. "If he ever did get to be the nominee, I somehow don't think that Axelrod and Obama would ask in a calm, pleasant way," Gingrich said. "So we'll see."