Latest News
July 10, 2008
Private Equity Buyout Industry Gets Its Facts Wrong
With one week until July 17 global actions focused on KKR, industry trying to change the subject
WASHINGTON, D.C. – On July 17, in cities from New York to Tokyo to Paris, SEIU members will be joined by MoveOn.org and Avaaz, and activists from 25 countries to take aim at the special perks and tax loopholes that buyout firms like KKR (Kohlberg, Kravis, Roberts & Co.) depend on to make billions. Activists will hold demonstrations worldwide at KKR offices and KKR portfolio companies such as Toys “R” Us, and delegations of community leaders and workers will press their case with pension funds, legislators, and top KKR executives. For more information visit www.july17action.org
As anticipation grows for the actions of July 17, the buyout industry is doing what it always does: trying to change the subject. In a recent New York Sun opinion piece, the industry gets its facts wrong and illustrates why it needs to change its business practices. The piece was authored by a fellow at Hudson Institute, a right-wing group where Marie-Josée Kravis, the wife of Henry Kravis, KKR’s CEO and co-founder, sits on the board.
The SEIU pension statistics cited in the New York Sun opinion piece are wrong. As of January 1, 2008, SEIU’s national pension fund for rank and file members was 96% funded. In 2006, it was funded at 92%. The accurate funding level is calculated by using the funding measure required by the Pension Protection Act of 2006.
“One of the problems with big employers in America like KKR is they don’t like providing pensions anymore,” said John Adler, Private Equity Director of SEIU’s Capital Stewardship Program. “Instead of criticizing unions that ensure a good retirement for workers, big employers like KKR should provide more workers with pensions.”
To Read the full press release, click here.
Exploitation of Residents at Wasserstein and Lazard-linked Senior Care Facilities Exposed
NEW YORK, New York, / July 7/PRNewsire/--
Lazard CEO Bruce Wasserstein comes under fire as healthcare workers’ union informs residents, families that Atria senior care facilities value private equity gain over safety measures
See the new video by Robert Greenwald's Brave New Films that exposes how Wasserstein and Lazard are gouging seniors:
Members of the Service Employees International Union (SEIU) have also launched an online campaign to bring attention to ongoing safety concerns at leading assisted living provider Atria Senior Living, as well as the controversial business practices of its parent, Lazard Real Estate Partners, a private equity fund affiliated with Lazard Ltd. While costs have increased for Atria residents and some Lazard executives celebrate record compensation, problems with resident care persist. Beginning today, Web ads running on some of the world’s largest news sites will highlight Atria’s gouging of its elderly residents. View the ads online: web ad #1 and web ad #2. Read more.
WEDNESDAY, JULY 3
Major Union Questions PA Pension Fund, Calls On PSERS to Protect Workers, Retirees
HARRISBURG, Pennsylvania, / July 3/PRNewsire/--
Eileen Connelly, Executive Director of the Service Employees International Union’s Pennsylvania State Council, today called on the Pennsylvania School Employees’ Retirement System (PSERS) to protect retiree pension dollars and workers’ rights by steering clear of an investment management firm affiliated with Lazard, Ltd., a troubled firm whose affiliates have lost money for PSERS annuitants and whose past is replete with union-busting and scandals.
On June 23, PSERS’ Board of Trustees announced that it would entrust a Lazard affiliate with $350 million of PSERS participants’ retirement assets. The Board did so despite the poor performance of its Lazard-managed investments. PSERS’s sole investment with a Lazard-affiliated entity—as a investor in a real estate fund called “Lazard-Freres Strategic Realty Investors Fund II”—has consistently underperformed and failed to meet performance benchmarks. More
WEDNESDAY, JUNE 4
SEIU Launches Global Campaign to Close Tax Loopholes for the Ultra-Wealthy
SAN JUAN, Puerto Rico, June 4 /PRNewswire/ --
As the global economy worsens, the Service Employees International Union (SEIU) joined by union leaders from Europe, India, Africa, Asia, Australia and South America launched a global campaign directed at world leaders and legislators protesting the special treatment and tax loopholes for private equity firms like KKR, whose risky debt-laden deals have helped throw the economy into free fall.
SEIU announced that on July 17 outreach to more than 10 million people worldwide will include demonstrations in 100 cities and 25 countries and they will gather petitions directed to legislators that say, "Support the fight to take back the economy and pledge to close tax loopholes that feed the greed of the buyout industry." MoveOn.Org is also joining the campaign. Activists have already committed to staging actions in 100 cities in North America, Europe, Asia, and South America, including Tokyo, Paris, New York City, Washington, D.C., and Mexico City.
Comedian Lewis Black, of the Famed "Daily Show" on television, kicked off the campaign with the launch of a short video that takes on Henry Kravis and the special treatment and tax breaks that have helped to make him one of the richest people in the world while the income gap continues to grow. The video can be viewed at www.july17action.org.
To read the full press release, click here.To read the coverage, click here.
$2.54 Billion Deal Warrants Close Scrutiny, Heightened Standards for Review, Given “Critical Services” Involved
Carlyle’s acquisition of Booz-Allen’s government business, which held $1.2 billion in Department of Defense contracts last year, raises the question if foreign governments could potentially gain access to sensitive national security information through their stakes in private equity firms. The stakes are becoming alarmingly high, as the Carlyle Group announced its intention to invest billions in developing U.S. infrastructure such as toll roads, water and sewer systems, bridges, tunnels, highways and airports.
In a report released last month, “Sovereign Wealth Funds and Private Equity: Increased Access, Decreased Transparency,” the Service Employees International Union outlined issues that arise when opaque foreign funds team up with secretive buyout firms. SEIU is sharing its concerns about the proposed Booz Allen buyout with Senate and House committees on armed services.
To read the full press release, click here.
WEDNESDAY, APRIL 23rd
New SEIU Report on Sovereign Wealth Funds and Private Equity Calls for More Transparency of SWF Investment in U.S. Buyout Funds
“Sovereign Wealth Funds And Private Equity: Increased Access, Decreased Transparency,” a new report released today by the 1.9 million member Service Employees International Union (SEIU) to coincide with tomorrow’s (April 24) U.S. Senate Committee on Banking, Housing and Urban Affairs Hearing on sovereign investments, calls on Congress to equip itself and the public with the tools necessary to make informed decisions about sovereign wealth fund (SWF) investment in United States private equity firms.
Current U.S. rules exempting private equity from many disclosure requirements, coupled with gaps in laws concerning foreign ownership, have inadvertently left a door open for virtually unregulated foreign ownership of American assets, which could have a broad effect, according to the SEIU report.
“Families are working hard to make their house payments and to send their kids to college. When a private equity firm and its foreign government partners swoop in, the public should know who is making the decisions and what immediate and long-term impact these deals could have on their lives,” said Stephen Lerner, director of SEIU’s Private Equity Project.Find out more about sovereign wealth funds and private equity.
To read the full press release, click here.
To dowload the full report, click here.
The War On Greed
Tuesday, February 26 New Report: KKR Portfolio Companies Could Put Consumers, Workers and the Environment at Risk
MUNICH, Germany – A new report released by the 1.9 million-member Service Employees International Union (SEIU) during the buyout industry’s conference in Munich—where until a last minute change participants were set to party to a 1920s/Titanic theme—raises serious questions about the long-term effects of the buyout industry on our nation’s economic health, the environment, the safety of the products we use every day, and employees’ basic civil rights.
Read more »
Download the report »
Tuesday, February 12
Protesters Blast Lazard's Billionaire Boss for $100+ Million Payday at Lazard New York City Headquarters 
I live in a basement apartment in Queens and couldn't afford health care when I was working at Atria. I brought home $300 a week after 10 years at Atria, and this Wasserstein guy is making over $100 million? If he invested just a little of that in Atria facilities, they could increase staffing for residents, offer affordable healthcare and a living wage to hardworking employees," said Radika Munna, former employee of Atria Lynbrook on Long Island.
With one protester dressed as a "fat cat CEO", protesters handed out fliers and fake money to the crowd. Participants also played "Billionaire CEO Bruce Wasserstein or Underpaid Atria Worker?," highlighting the glaring differences between Lazard CEO Wasserstein and the average Atria worker in New York City. |
Protesters then attempted to deliver bags of fake money to Wasserstein's 30-Rockefeller Center offices.
Read Press Release »
See photos from the protest »
The announcement on January 30 by Lazard Ltd. that Bruce Wasserstein, CEO of Lazard Ltd. and a principal of the Lazard group of companies, has signed a new contract worth more than $100 million and will be paid more than $41 million for 2007 is leaving low-wage workers in shock at Lazard-affiliated Atria Senior Living.
"How can they give this guy so much money?" »
What industry insiders are saying:
Portfolio.com 2/5/08 (“Are You Overpaid? Your Board Thinks So.”)
BreakingViews.com 1/30/08 ("Bid'himself up Bruce")
BloggingStocks.com 1/30/08 ("Lazard: Bruce Almighty")
Striking workers TUESDAY, JANUARY 29
Striking Aramark workers to march on Private Equity annual industry meeting in New York
More than a dozen striking workers from Aramark, a private equity owned company that serves and prepares food in New York’s corporate dining rooms, will march on the conference to draw a stark comparison between the workers –some of whom are expected to raise their families on as little as $400 a week—and the excessive bonus, wages, and fees paid to private equity managers and their consultants.
Get the story »FRIDAY, JANUARY 25
SEIU statement on the World Economic Forum Study on the economic impact of private equity
"The buyout business remains at its core a vehicle for the spectacular accumulation of wealth by the few without regard for the impact on others."
— Stephen Lerner, Director of SEIU's Private Equity Project
Could the Carlyle Group buyout of Booz Allen government consulting arm be a threat to national security? Carlyle Group sewer sludge business may increase health risks to communities
People who live near the operations of a Carlyle Group sewer sludge business could be at an increased health risk if Carlyle does not provide information to those communities about toxins and other hazards associated with its business.
Recent news features
Carlyle Exposed: A new web site about the Carlyle Group
Jump to CarlyleExposed.org » | Carlyle Group embrace of Abu Dhabi undermining respect for human rights »
SEIU President Andy Stern calls on states and pension funds to ensure investments support respect for human rights
Press release »
Australian and US unions team up to hold the Carlyle Group accountable for treatment of workers
Go to the article » | Australian Financial Review coverage »
SEIU REPORT
Behind the Buyouts: Inside the World of Private Equity
Workers, communities, and the nation as a whole should share in the economic opportunities being created by the booming private equity buyout industry, according to a new report released by SEIU.
DOWNLOAD THE REPORT (PDF) » | WHAT EXPERTS ARE SAYING (pdf) »
PRIVATE EQUITY PULSE
What financial leaders and experts are saying about the Private Equity Economy
"We are totally conflicted — get used to it."
-- Morgan Stanley Vice Chairman of Investment Banking Robert Kindler [2]
“Their success has put pressure on many public companies to adopt their strategies and tactics -- whether it's being ruthless in reducing costs or taking on more leverage or giving big pay packages to top managers.”
-- Washington Post Columnist Steven Pearlstein [8]