Here's a question to ponder: If one belongs to a religion that bans smoking, should one participate in helping tobacco companies profit from emerging markets? Is there a moral question that has to be answered before undertaking
October 10, 2012

Here's a question to ponder: If one belongs to a religion that bans smoking, should one participate in helping tobacco companies profit from emerging markets? Is there a moral question that has to be answered before undertaking that project?

If you're Mitt Romney, the answer is no. The Huffington Post has a brilliant investigative piece out today. Jason Cherkis and Zach Carter pieced it together after a reader tipped them off to documents in the Legacy Tobacco Documents Library.

Bain & Company were corporate consultants hired to assist companies in marketing, expanding, and streamlining their operations. After Mitt Romney had successfully launched Bain Capital and made a lot of money, he was asked to come back and turn around Bain & Company. It could be argued that Bain & Co was languishing because of the activities of Bain Capital, which was leveraging and consolidating companies that Bain & Co might otherwise have provided consulting services to. Whatever the reason, Romney agreed to come back and try to turn it around.

It would seem that one of the drivers of Bain & Co's turnaround was to inject Big Tobacco companies into Russia's emerging markets. From the article:

The Soviet Union's downfall meant rich rewards for any company able to move quickly, and the timing was right for U.S. and British tobacco companies eager to control the cigarette market. Under pressure at home for marketing an addictive and deadly product, domestic sales were shrinking. It was a dilemma Bain and Romney knew well, having worked extensively on behalf of Philip Morris in the U.S. beginning in 1990. In 1992, Bain approached British American Tobacco -- the international conglomerate behind Kool, Lucky Strike, Pall Mall and Benson & Hedges -- offering a lucrative partnership in Russia. It worked.

Worse yet, taxpayer dollars helped launch the effort.

Bain was in the middle of all of this, putting to work the same skills it had sharpened in the U.S. -- using taxpayer money to help it gain footholds in Russia. In March 1993, the American government gave Bain & Co. a $3.9 million contract to advise Boris Yeltsin's administration on the privatization of the Russian economy, according records detailing the arrangement uncovered by The Huffington Post. Romney's consultants helped foreign firms and aspiring oligarchs decide how to corral Russia's riches -- including writing an official manual that outlined how best to navigate the process. At the same time, Bain leveraged its contacts with senior Russian officials to arrange sweetheart deals for its tobacco clients.

The Russian government was an incredibly corrupt institution from the beginning. The fall of the Soviet Union gave rise to a robust black market system. For all of the high talk about Reagan and the fall of communism in those days, Russia's "democracy" was little more than the oligarchy opening the door to receive some of the riches of the west, and Romney facilitated that.

This abstract of a Princeton study sums it up well, and places responsibility on the shoulders of more than a few:

Russian corruption and organized crime has internationalized rapidly since the collapse of the Soviet Union in 1991. The political losers of the Soviet era were the financial winners of post-Soviet Russia, a rare case in history in which the discredited elite of the old political system enhanced their financial power after the collapse of the system they had run. Ironically, Russia’s criminals and ex- nomenklatura (party elite) members have been among the most successful in capitalizing on the globalization of the world’s financial markets. The collapse of the Russian economy in 1998 was, in part, a consequence of the Russian elites’ ability to move large sums of money out of their banks into offshore havens.

Bain & Co helped to facilitate that.

While the Huffington Post article notes that they cannot say Romney personally participated in the profiteering on the backs of the Russian people's health, no one can believe such an enterprise was undertaken without his full knowledge and likely participation at the highest level of the deal. Mitt Romney is a control freak, and there's no way he would run a company without knowing what that company was doing and who they were dealing with.

The strategy was to move in on the Russian privatization movement and establish footholds by getting smokers to change their behavior to either start smoking or switch brands.

Philip Morris was one of Bain's first new clients under Romney. The consultants were eager for the work. "We pride ourselves on meeting your rigorous standards," Bain executives pledged to the tobacco giant in its Nov. 8, 1990, pitch letter. Philip Morris hired Bain that year. An early project focused on "'switching' behavior." The plan was to convince the established smoker to either change to Philip Morris cigarettes or to keep buying the brand, said one former Bain employee who worked on the project and requested anonymity because of the company's confidentiality policies and the sensitive nature of the story. He told HuffPost that Bain focused on analyzing what made smokers pick one brand over another in convenience stores."

This was all about established smokers -- choosing one brand of menthol over another," the former employee said.

Which brings me back to my original question: Is there a moral question involved when profits depend on promoting a product clearly proven to cause health problems and which is banned from one's own religion?

It's not an easy question to me. If Romney were not Mormon, he would still have to wrestle with whether it was a good idea to introduce products into an emerging market which only harmed people. There's no question now that tobacco does harm and there was no question then. So even without the Mormon ban on tobacco, how is pimping tobacco products in Russia a moral and right thing to do?

For Romney, morality had nothing to do with it. Not one small thing. In the end, that's the most disturbing part of this story.

Bain consultants were allowed to opt out of the Philip Morris work if they had moral objections, recalled the other former Bain employee. "People had the option of working on the case or not," he said. "Nobody was forced to work on it. There were certain people that didn’t."

The former Bain worker didn’t share those objections. "There was nothing illegal," he explained. "It's a free country. People have the choice to smoke. It wasn’t a moral decision. I don’t eat junk food. I don’t think it’s good for you. I don’t judge people who work for Frito-Lay. That’s how I look at it. Are companies bad because they pollute the environment? Are oil companies bad because there’s drilling involved?"

Whether Romney had qualms about working with Philip Morris, the former employee doesn’t know. "He was a very impressive CEO," he said. "He [had] confidence, a strong vision. He was a real dynamic business leader."

Why would it matter if he had qualms or not? He was the CEO. He stood to make huge profits from the work with tobacco companies. And he did make huge profits from them.

To understand Mitt Romney, you need to read this story and understand how he approaches everything. It's about the win, the profit, and the outcome. It isn't about morals, or ethics. This is why he lies about everything, and stonewalls when he's confronted with the lie. To Romney, making money is not a question of morals. It's just a question of having a nose for where the money is.

The tithe takes care of the rest. Send the ten percent to the church and have Ann Romney stand up and say what a guy you are. No need to actually, you know, behave with morals or ethics. The tithe covers the sin.

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