Over the past 30 years, as the gap between wealthy and poor grew ever wider, total philanthropic giving almost tripled, In an age of widening partisanship and plummeting trust in government, this outpouring of philanthropy has produced a distinct breed of philanthropist: The policy-making billionaire.The Times piece went on to mention Carlyle Group co-founder William Conway. Private equity underwriter (PEU) Conway is a well know tax hater.
William E. Conway Jr., a founder of the Carlyle Group investment company, is planning to give away $1 billion of his personal fortune, and is said to be considering how his money can aid in financing major infrastructure projects.Note: Conway's PEU firm has a $1.15 billion infrastructure fund, itching to invest.
In keeping with the anti-government spirit of the times, the new philanthropists share a disdain for established politics and an impatience with the slow churn of old-fashioned policy making.Billionaires shed that disdain when they visited Capital Hill to keep their preferred status regarding "carried interest" taxation. Carlyle's Conway leads a virtual nonprofit organization, paying a mere 1% in taxes on its $9 billion in net income over the last five years.
Also, PEU's saddle affiliates with dramatically increased interest expense and new management fees, often taking away tax liability for years. It's a business model that "starves the beast."
“As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business, by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.”Conway announced his planned $1 billion donation in late September. It came on the heels of Carlyle's strong arming of Brintons, a British carpet maker. Carlyle dropped the pension fund, cut UK jobs and closed plants. Those moves dimmed the future prospects of many workers. It also shifted retirement responsibility to a public, i.e. government entity.
Did Brintons employees get first dibs at Conway's $1 billion? Hardly.
The very loftiness of (the above) ambitions raises a significant question: Can even the very wealthiest philanthropists finance public services on the scale necessary to achieve social change — that is, on the scale of government itself?Kaching! It's back to Carlyle's distinctive competency, influence peddling. PEU money finances politicians. It's used to lobby for preferred tax and regulatory status, as well as steer chunks of Uncle Sam's trillion dollar budget to affiliates.
Instead of seeking to supplant what government does, philanthropists can finance advocacy to change it.
Carlyle kaching is used to settle legal investigations and fund attorneys offering laughable defenses (in the case of LifeCare Hospitals' 25 patient deaths after Hurricane Katrina and SemGroup's bankruptcy).
The Times piece sprayed perfume over the PEU stench.