Romney aide trades on political ties

October 07, 2011|By Donovan Slack, Globe Staff
  • Tagg Romney (left) and Spencer Zwick launched Solamere Capital with a third partner two weeks after Mitt Romney quit the 2008 presidential race. It was incorporated at the Boston address where the campaign headquarters had been.
Tagg Romney (left) and Spencer Zwick launched Solamere Capital with a third…

WASHINGTON - As national finance director for Mitt Romney’s presidential campaign in 2008, Spencer Zwick frequently called big-money supporters looking for contributions.

After Romney dropped out of the race, Zwick did not stop calling.

Diving for the first time into the other sphere of the Romney universe - private-equity investing - the trusted aide began asking Romney’s backers to invest at least $10 million each in a financial partnership Zwick launched with Romney’s oldest son, Taggart.

Using their close ties to Romney and a hefty political Rolodex, the partners raised more than $200 million for the startup business, Solamere Capital, despite brutal market conditions and their limited experience in the world of high finance. In their prospectus, they said they expected to reinvest the money in an array of equity funds, each of them also managed by Romney political supporters.

The story of Solamere offers a rare glimpse into the intersecting worlds of Romney’s business and political operation, which continues to employ Zwick as chief fund-raiser for the 2012 campaign. Although campaign finance specialists say his overlapping missions are permitted by law, some ethics watchdogs say the arrangement presents an appearance that key political contributors could be rewarded with business opportunities.

“This setup screams what’s wrong with our broken system,’’ said Bob Edgar, chief executive of Common Cause, a national nonprofit advocacy group that frequently speaks out against the influence of money and lobbying in politics. “This is a business deal, and Romney is the investment. If he’s elected, they will have access and influence at the White House. If he’s not the next president, they’ll still make a bundle on the deal. Either way, they will be rewarded.’’

Mitt Romney and Solamere’s principals declined through representatives to be interviewed. Solamere said in a statement that there was no consideration given to political connections or support in Solamere’s business strategies and that the firm “adhered to the highest ethical standards.’’ Romney spokeswoman Gail Gitcho said Solamere and the candidate’s political interests are completely separate.

Solamere does not disclose the identities of its investors. Although the prospectus obtained by the Globe lists equity and venture firms that would be potential investment targets, the company would not confirm where it has placed its money. The lack of transparency makes it difficult to verify whether Zwick is appropriately managing his overlapping roles, critics say.

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