Hartford, CT – After unsuccessfully self-financing his 2010 gubernatorial run, Tom Foley will take public funding for this campaign. But Connecticut voters should be wary – it is purely a cosmetic move for Mr. Foley.
“Tom Foley’s taking public financing does not change who he is. There’s of course nothing wrong with being wealthy – for many, it’s the American Dream – but Tom Foley made his money off the backs of hardworking, honest workers by slashing payrolls and bankrupting companies. Instead of improving businesses, which is what Tom Foley promised to do, he personally profited from driving Bibb into the ground – it’s that simple. That’s why he’s now making reckless promises on taxes he can’t keep without gutting funding for local education, pulling the plug on healthcare, and laying off thousands of employees,” said Democratic Party Chairwoman Nancy DiNardo. “The question isn’t whether Tom Foley should or should not be taking public financing, it’s whether he’s right for the people of this state. He isn’t. Taking public dollars for this campaign is merely a political ploy to divert attention from the real Tom Foley – someone who personally profited off the blood, sweat, and tears of middle-class families. And someone who would take Connecticut back to the old, failed policies of the past.”
Foley Sold An Unprofitable Division Of Bibb In 1985, Cutting Payroll By About 1,000. According to Forbes, “Foley was on his way. First priorities: raise money and cut costs. Even before the buyout closed in October 1985, Foley struck a deal to sell Bibb’s unprofitable carpet yarn division for $ 11.5 million; that lopped the payroll by about 1,000. He scrapped management’s plan for a $ 35 million capital expansion program — more savings — and contracted with two mills to supply Bibb with woven goods. He brought in new managers who responded quickly to Foley’s incentive compensation plans. More than $ 7 million in bonuses have been given. As if from a textbook, Bibb worked as Foley said it would. Pre-Foley net earnings were $ 6 million. Last year: $ 11 million.” [Forbes, 9/5/88]
Hartford Courant: Foley’s NTC Group Earned Millions In Management Fees “Even As Bibb Struggled.” According to the Hartford Courant, “Foley’s Greenwich-based holding company, the NTC Group, collected management fees from Bibb of $4 million each year from 1992 to 1994, then $3.4 million in 1995, even as Bibb struggled and began losing money in 1994, according to filings with the U.S. Securities and Exchange Commission. He estimates he personally collected about 20 percent of those fees. While Foley has enjoyed success in business overall, his Bibb venture contrasts starkly with the rosy-hued picture of his career painted in his campaign literature.” [Hartford Courant, 5/21/10]
Foley Said NTC Group Made About $20 Million Over 10 Years From Bibb In Management Fees. According to the Associated Press State & Local Wire, “In response to Malloy’s continued attacks focusing on the Bibb Co., Foley said his company, NTC Group, bought the Macon, Ga.-based textile company in 1985 when it was losing money and turned it around. He said the recession of 1990 and increasing competition from overseas hurt the company, which went through a restructuring in 1996 that ended with bondholders owning and controlling Bibb. Foley said he had no role in management or operations after 1996, and Bibb closed its largest fabric mill in Columbus, Ga., in 1998. He said Bibb’s new owner filed for bankruptcy protection in 2001. Foley said NTC Group did make about $20 million over 10 years from Bibb in routine management fees.” [Associated Press State & Local Wire, 10/11/10]
Foley Lost His 95 Percent Ownership Stake In Bibb In 1996. According to the Hartford Courant, “But one of Foley’s claimed success stories – his ownership of The Bibb Co., a textile manufacturer that he bought through a junk-bond-financed leveraged buyout in 1985 – ended with him relinquishing executive control and most of his 95 percent stake in Bibb 11 years later.” [Hartford Courant, 5/21/10]
Bibb Underwent A Prepackaged Bankruptcy Where Foley Lost Most Of His Ownership Stake In Exchange For His Debt. According to the Hartford Courant, “As the ad claims, Bibb did file for bankruptcy after the debt-heavy company ran into cash-flow trouble and missed a loan payment. But that happened 11 years after Foley took over, and while the ad makes no specific claim about the timetable, the quick pace of the script gives the inaccurate impression of a fairly compact time period. The copy also could easily be viewed as suggesting the bankruptcy heralded the demise of the business, and that after the filing, 2,000 workers promptly lost their livelihoods. But the bankruptcy was a “prepackaged” reorganization in which Foley’s creditors continued running the company after swapping the debt they were owed in exchange for nearly all of Foley’s equity in the business.” [Hartford Courant, 9/22/10]