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Matt Romney’s Russia Trip, a Preview of Romney Family Crony Capitalism?

Matt Romney’s trip to Russia may not only undercut his father’s campaign rhetoric but also invite scrutiny of Romney family business interests. 

Lee Fang

November 2, 2012

The New York Times has a fascinating scoop detailing how one of Mitt Romney’s sons, Matt, made a business trip to Russia this week to solicit funds for his real estate company, Excel Trust. According to the Times, Matt told a Russian “known to be able to deliver messages to Mr. Putin” that “despite the campaign rhetoric, his father wants good relations if he becomes president.”

The story is sure to undercut Mitt’s campaign effort to paint President Obama as too soft on Russia. Only last week, a pro-Romney group began airing an ad accusing Obama of securing the “dictator vote” of Russian President Vladimir Putin.

Aside from siphoning the life from Romney’s position as a Russia hawk, this trip may also preview the type of family business-related conflicts of interest that are already becoming an issue for the candidate. For one thing, if Matt is going to deliver a foreign policy announcement about his father during a business meeting, isn’t that a clear message to his potential partners that he has special access to policymaking?

Are the Russians more motivated to invest with Matt’s firm now that they know they could be dealing with the future president’s son? The Times reveals that Matt made the trip to Russia to persuade officials to invest sovereign wealth funds with his company, which owns shopping centers in the United States. If Matt keeps relaying substantive policy messages through his firm, he might seem like a good investment if you’re a foreign politician.

Earlier last month, I reported on a similar dynamic that is occuring with another Romney family enterprise, Solamere Capital. Solamere Capital is a “fund of fund” private equity firm that was founded by Tagg Romney, Mitt’s eldest son, with money and help from his father. What sets the firm apart is its incredible network of business partners, which include some of the leading private equity firms in the country.

My story focuses on how many of Tagg’s investment partners own federal contractors plagued by accusations of wasting taxpayer money, from a company that makes Medicare scooters to several for-profit colleges. Tagg’s connections to a Romney White House coud mean millions of dollars for himself and his investors. Already, Mitt has gone out of his way to praise a company — Full Sail University, a for-profit college in Florida — that is owned by a Tagg investment partner (the partner is also a major Romney campaign contributor). Moreover, Romney’s education plan, which would funnel more taxpayer dollars to these types of proprietary schools, already some of the most expensive and lowest performing in the nation, could enrich his son. It’s a particularly bad form of crony capitalism, because debt-ridden students and taxpayers are the only ones who do not benefit in the deal.

There’s a line between succeeding financially because of independent effort, and succeeding financially because of political connections. Romney’s family is already wealthy — but that apparently isn’t stopping them from potentially hopping over that line.

Read Lee Fang's piece on Tagg Romney and Solamere.

Lee FangTwitterLee Fang is a reporting fellow with The Investigative Fund at The Nation Institute. He covers money in politics, conservative movements and lobbying. Lee’s work has resulted in multiple calls for hearings in Congress and the Federal Election Commission. He is author of The Machine: A Field Guide to the Resurgent Right, a recently published book on how the right-wing political infrastructure was rebuilt after President Obama's 2008 election. More on the book can be found at www.themachinebook.com.


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