Private Equity and the Political Left
FBN’s Liz MacDonald on the politicians who have worked at private equity firms over the years.
Bill Clinton. Al Gore. Tom Daschle. Wesley Clark. John Edwards.
All prominent Democrats, and all associated with private-equity firms. While GOP presidential contender Mitt Romney gets demonized for his work at private-equity firm Bain Capital, it is being forgotten that leading Democrats also worked at private equity firms, and there has never been a word of criticism of their involvement in creating jobs -- or job losses. Many Democrats have also joined the banking and hedge fund sectors as well.
Moreover, the biggest beneficiary of political donations from private equity firms was President Barack Obama, says MapLight, the nonpartisan research group that tracks campaign contributions.
Additionally, Democrats got more political donations than Republicans from private equity, the group says. Private equity firms and their executives gave more than $10 million to Democrats between January 2007 to June 2011, it says. Their Republican counterparts got $6.6 million, it adds. Of the Democrats' total, Obama received more than $1.9 million.
Here are the most prominent Democrats and their association with the private equity world and Wall Street firms:
President Bill Clinton was hired as an advisor in 2003 by private equity firm Yucaipa Cos., founded by supermarket magnate Ron Burkle. Yucaipa says it has worked on mergers and acquisitions valued at more than $30 billion. It does leveraged buyouts and restructures businesses, resulting in job creation and losses. Companies include Supervalu, Pathmark Stores and Wild Oats.
Clinton earned a reported $20 million before leaving in 2009. Mr. Clinton also reportedly was a partner in a foreign fund which housed a unit connected to the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum.
Al Gore, former vice president under Clinton, co-founded the London-based private-equity firm Generation Investment Management in 2004, which invests in green companies. The firm has a number of former executives from Goldman Sachs (NYSE:GS), including its CEO, David Blood, who is Goldman’s former head of asset management. That’s why Generation’s nickname is “Blood and Gore.”
John Edwards, former Democrat vice presidential nominee under 2004 Democrat presidential candidate John Kerry, and a former North Carolina senator, was hired as an advisor in 2005 by private equity firm Fortress Investment Group, with $35 billion in assets under management. Edwards earned a reported $479,512 for about a year’s worth of work, and reportedly invested millions of dollars in Fortress. Fortress does leveraged buyouts and restructures businesses, resulting in job creation and losses. Its deals include RailAmerica and Penn National Gaming.
Former South Dakota Senator and Democratic Majority leader Tom Daschle was chairman of the executive advisory board of InterMedia Advisors, a private equity investment firm founded by private equity investor Leo Hindery that does leveraged buyouts and in the media sector. He left in January 2009. Daschle briefly joined the board of Apollo Investment Corp., an affiliate of leveraged buyout firm Apollo Global Management, in April 2006 before leaving in July.
Apollo was founded by former Drexel Burnham Lambert financier Leon Black, and specializes in LBOs, vulture investing and corporate restructuring, with $65 billion in assets under management. It has worked on AMC Entertainment, Caesars Entertainment Corp., Realogy, and the CKE Restaurant chain.
Evan Bayh, former Democrat Indiana senator and governor, is a senior advisor at Apollo Global Management.
General Wesley Clark, former general of the U.S. Army, supreme allied commander-in-chief of Nato's US-Europe operations under President Clinton, and former Democrat presidential contender in 2004, is chairman of Rodman & Renshaw Capital Group, which sells investment banking and private equity services to public and private companies mostly in the U.S. and China, including biotech, metals and mining, and financial services deals.
Former Sen. John Breaux (D-LA) is a past board member of the Managed Funds Association [MFA], the main lobby group for the hedge fund industry. MFA calls itself “the global voice of the hedge fund industry representing over 850 members who manage a significant portion of the estimated $1.1 trillion invested in hedge funds.”
President Obama’s former top economic advisor, Peter Orszag, who ran the Office of Management and Budget, is now vice chairman of global banking at Citigroup (NYSE:C), overseeing customer investments worldwide.
The Carlyle Group, the world’s third largest private equity firm in Washington, D.C. with more than $150 billion in assets under management, was co-founded by David Rubenstein, one of former President Jimmy Carter’s top domestic policy advisors.
The Carlyle Group also has among its executives President Clinton’s chief of staff Thomas “Mack” McLarty, and Arthur Levitt, President Clinton’s former chairman of the Securities and Exchange Commission.
President Obama’s auto “czar,” Steve Rattner, spent three decades on Wall Street and co-founded the Quadrangle Group, a Wall Street private equity firm that focuses on restructuring mid-market companies in the media, telecom and information technology sectors.