Pawlenty: Why are Republicans attacking capitalism?

That’s a good question, especially since it turns out that one of them has financial ties to the very same leveraged-buyout industry he’s currently demonizing. Tim Pawlenty visited Radio Row at the Manchester Radisson and sat down with me for a few minutes to discuss the criticisms of Mitt Romney’s Bain Capital experience by Newt Gingrich, Jon Huntsman, and Rick Perry. Pawlenty, who endorsed Romney in August and is campaigning in New Hampshire this week for him, couldn’t quite believe that these remarks are coming from Republican candidates. Pawlenty is “really disappointed” that the Republican contenders are making “Democratic arguments” and using “class warfare,” and says the argument isn’t accurate anyway, since Bain actually created many more net jobs than were lost.

Pawlenty is the one who tipped me to this story, reported by both Fortune and the New York Times, which showed that Gingrich both investing in and worked on an advisory board for Forstmann Little — a competitor of Bain in the leveraged-buyout industry.  Here’s Fortune:

Upon leaving Congress in 1999, the former Speaker joined private equity firm Forstmann Little & Co. as a member of its advisory board.

It is unclear how long Gingrich served on the advisory board, or how much he was paid. The campaign has not yet responded to a request for comment.

Forstmann Little was one of the world’s original leveraged buyout firms, although its founder — the late Teddy Forsmann — often railed against what he saw as over-leveraging by rival firms (presumably including Bain). It effectively began winding down operations in 2005, following a legal dispute with the State of Connecticut over failed investments in a pair of large communications companies. Forstmann Little lost the case at trial, but wasn’t required to pay any significant restitution (both deals were done within two years of Gingrich being named to the advisory board).

During Saturday night’s GOP primary debate in New Hampshire, Gingrich said: “I’m not nearly as enamored of a Wall Street model where you can flip companies, you can go in and have leveraged buyouts, you can basically take out all the money, leaving behind the workers.”

And here’s the NYT, which Gingrich cited as an authority during this weekend’s debates:

But Mr. Gingrich was himself on an advisory board for a major investment firm that had a similar business model, Forstmann Little, a pioneering private equity firm co-founded in 1978 by Theodore J. Forstmann that was, along with Mr. Romney’s Bain Capital and Henry R. Kravis’s Kohlberg Kravis & Roberts, among the leading private equity firms during the 1980s and 1990s.

Forstmann Little earned billions of dollars in profits from its investments in companies including General Instrument and Gulfstream Aerospace. But the firm shut down most of its operations a decade ago after suffering losses from ill-timed bets on highflying telecommunications companies at the height of that industry’s bubble.

Mr. Gingrich’s involvement with the firm could complicate his attacks on Mr. Romney. …

Mr. Gingrich would attend twice-a-year Forstmann Little advisory board meetings in Manhattan, which were held typically at the Four Seasons restaurant or at the ’21’ Club. The partners discussed potential investment with Mr. Gingrich, particularly those in the health-care industry.

Over time, Mr. Gingrich made investments in Forstmann Little portfolio companies.

So was Forstmann Little employing Gingrich as a historian?

At least one Republican candidate managed to remain a champion of the free enterprise system, as Michelle Malkin — no fan of Mitt Romney — pointed out:

Leaving the frozen event, Santorum also declined to take a shot at Romney over a remark earlier from the front-runner that he “likes to fire” workers who are not doing a good job.

“We try to hire good people, we try to keep them employed. If someone if obviously not performing their duty and their mission, obviously a business has a responsibility for the greater good of the business and the other employees to make sure that everybody there is pulling their weight,” Santorum said.

Asked whether Romney’s corporate takeover experience at Bain Capital would be a liability, Santorum said: “I’m not making it a liability. I believe in the private sector.”

Yeah, I remember when most Republicans used to believe in it, too.  The irony in this is that the super-PAC backing Gingrich will use $5 million from Las Vegas casino owner Sheldon Adelson — who, by the way, is a good conservative and stalwart defender of right to work laws — to blast Romney for, essentially, betting on struggling companies — and having a better than 3-1 record in rescuing them.