The U.S. also was betting on Russia's transformation, and by 1993 had hired Bain to help transform the post-Soviet economy's small businesses, according to State documents. At the time, Russia's government, headed by Boris Yeltsin, was seen as a solid U.S. ally. Current relations between Vladimir Putin's government and the Obama administration are chillier despite Obama's "reset" effort.
Bain, one of several strategy firms hired by the U.S. Agency for International Development in a $98 million deal headed by KPMG Peat Marwick, sent out teams to lay groundwork with Russian officials in Leningrad and more than a dozen other cities. Bain consultants set up pilot projects, developed commercial property lists and held seminars across the country.
A 1994 internal Bain assessment highlighted the "impressive" pace of Russia's privatization but acknowledged "limited improvement." Bain consultants at times griped about their Russian counterparts and rampant municipal corruption. In a February 1994 note to USAID officials, they also pressed for more money, warning that because of delays "we will be unable to complete our contract deliverables."
That same month, Romney launched his Senate bid in Massachusetts against Democratic Sen. Edward Kennedy. Romney lost in November 1994, and returned to run Bain Capital, his private equity firm.
Associated Press researchers Zhao Liang in Beijing and Fu Ting in Shanghai contributed to this report.
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