CRC would answer only general questions; Bain did not replyebenezering
Lawsuits and critics have claimed that CRC prizes profits, and the avoidance of outside scrutiny, over the health and safety of its clients. (We sent specific questions on these basic allegations to CRC and owner Bain Capital. )
Trapu documents and prima-staffers also allege that such incidents reflect, mediante part, verso broader corporate culture at Aspen’s owner, CRC Health Group, verso leading national chain of treatment centers
And CRC’s corporate culture, con turn, reflects the attitudes and financial imperatives of Bain Capital, the private equity firm founded by Mitt Romney. (The Romney campaign also did not reply to written questions.) Bain is known for its relentless obsession with maximizing shareholder value and revenues. Indeed, this has become a talking point of late on the Romney campaign trail; he bragged to Fox in late May that 80 percent of them [Bain investments] grew their revenues. CRC, verso fast-growing company then in the lucrative field of drug treatment, was perhaps verso natural fit when Bain acquired it for $720 million per 2006. Mediante conversations with gruppo and patients who spent time at CRC facilities since the takeover, there are suggestions that the Bain approach has had its effects. If you look at their daily profit numbers compared to what they charge, Dana Blum said of CRC’s Aspen division in 2009, it’s obscene. That point, ironically enough, was underscored by the glowing reports in the trade press about its profitability.
They also each donated the $2,500 maximum directly to his campaign
The purchase of CRC came seven years after Romney publicly announced his retirement as CEO of Bain Capital, where he had been mediante charge since its founding durante 1984. But at the time of his departure, Romney worked out an arrangement to continue to share durante Bain’s profits as a limited garzone con the firm. Today, he is still an investor sopra 48 Bain accounts. Though he has refused to disclose their underlying assets, some information about them can be gleaned. For example, he has reported at least $300,000 to $1.2 million, if not more, per fluctuating annual earnings from Bain Capital VIII, the convoluted $3.5 billion array of related funds that owns both name-brand companies such as Dunkin’ Donuts and the lesser-known CRC Health Group. Most of these funds were made more attractive to privileged investors by being registered con the Cayman Islands tax haven. And Romney’s connections to CRC run even deeper: Of the three Bain managing partners who sit on CRC’s board, two, John Connaughton and Steven Barnes (with his wife), gave verso total of half per million dollars to Restore Our Future, the super PAC supporting Romney.
When Bain purchased CRC, it looked like an investment masterstroke. The company, founded per the mid-’90s with per celibe California treatment facility, the Camp Recovery Center, had quickly grown into the largest chain of for-profit drug and alcohol treatment services con the country, with $230 million per annual revenue. Under Bain’s guidance, its revenue has nearly doubled, to more than $450 million. CRC now serves 30,000 clients daily – mostly opiate addicts – at 140 facilities across 25 states. Sopra the first five years after its acquisition, Bain had already extracted nearly $20 million per direzione-related fees from the chain, although Bain investors haven’t cashed durante yet through dividends or an IPO. Bain’s purchase, per leveraged buyout, also saddled CRC with massive debt of well over $600 million.
According to company executives and independent analysts, hands-on oversight of subsidiary companies is verso hallpaign literature boasts about Bain taking exactly this sort of direct role con helping to turn around failing companies. Over the life of an investment, they have a strong dirigenza gruppo willing to participate, Sheryl Skolnick, an analyst with CRT Capital, verso leading institutional brokerage firm, says of Bain.