Obama and Regulators Loosened Environmental Restrictions as WH Worked with Buyout Firm to Save “Swing State” Oil Refinery
by MARK MAREMONT August 23, 2012
Since the spring, President Barack Obama's re-election campaign has repeatedly hit Mitt Romney for his career as a private-equity executive and has aired ads accusing his former firm, Bain Capital, of ruining businesses and sending jobs overseas.
At the same time, the Obama White House played a central role in encouraging another private-equity firm to rescue a Philadelphia oil refinery, whose imminent closure by owner Sunoco Inc. SUN -0.23% threatened to send gasoline prices higher before the election.
Gene Sperling, director of Mr. Obama's National Economic Council, helped kick-start discussions to sell the refinery to Carlyle Group, CG -0.04% a well-connected Washington, D.C., private-equity firm. Mr. Sperling later talked numerous times to Carlyle executives, government officials and union leaders as part of a bipartisan effort, according to participants in the talks.
Carlyle last month said it would take a two-thirds stake in the refinery and invest at least $200 million to upgrade it, staving off the potential for fuel-price increases and saving 850 unionized jobs in Pennsylvania, a likely battleground state in November.
To help seal the deal, expected to be made final in September, the Obama administration and state regulators agreed to loosen certain environmental restrictions on the refinery. Pennsylvania's Republican governor, Tom Corbett, contributed $25 million in state subsidies and other incentives.
The refinery story is an example of how the private-equity industry is a more complicated place than the image kicked up by this year's presidential election, in which first Mr. Romney's Republican primary rivals, and then the White House, used Bain as a cudgel. It also helps explain why partisans on both sides argue strenuously about the subject. The successful deal was widely reported, and an article in the Philadelphia Inquirer reported some details of the White House's involvement.
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