“Crony capitalism” is the latest indictment lodged against the Obama administration by Mitt Romney, who knows all too well the meaning of that term. As a private equity operator, he thrived in a financial sector that has always relied heavily on tax advantages, pension bailouts, state investments, and a panoply of other benefits conferred by elected officials expecting campaign contributions. Within the past few weeks, even as Romney loudly castigated the alleged cronyism practiced by the Obama White House, he attended fundraisers hosted by two of the nation’s legendary beneficiaries of tainted government largesse.
The Hamptons fundraiser for Romney that instantly became infamous — owing to the snobbish, boneheaded remarks of the donors pulling up in their gold-plated vehicles –– occurred at the Creeks, the huge gated compound on Georgica Pond owned by Ronald O. Perelman. Long one of America’s wealthiest investors, Perelman is a bipartisan crony who greases both sides in order to protect his own interests. Much was made of the fact that he maxed out to Barack Obama in 2008 and now supports Romney.
Years before anyone ever heard of Obama or Romney, however, Perelman became notorious for the sweetheart deal bestowed upon him in the aftermath of the savings and loan debacle. In December 1988, the Reagan-Bush administration eagerly rewarded him for taking over several thrift institutions left insolvent in the financial orgy of speculation and thievery that followed deregulation.
While most Americans were left holding the bag, in the form of a trillion-dollar bailout and a sharp recession, Perelman, then already the fifth-richest man in the country, walked away with a mind-boggling bonanza of property and tax benefits. For paying a paltry $315 million, he and his associates received $7.1 billion in sound assets, $5.1 billion in cash to indemnify bad loans, and at least another billion dollars worth of special tax breaks.