Monday, September 25, 2023

SEC to Open PEUdora's Box?

Seeking Alpha

The U.S. Securities and Exchange Commission has escalated its investigation into the financial industry's use of personal devices for communicating about business matters by collecting thousands of messages, according to a media report.

Now the SEC is asking at least 16 investment firms for messages from the first half of 2021 that pertain to their businesses, Reuters said, citing four people with direct knowledge of the matter. The companies include Blackstone (NYSE:BX), Apollo Global Management (NYSE:APO), KKR & Co. (NYSE:KKR), Carlyle Group (NASDAQ:CG), and TPG (NASDAQ:TPG), three of the people told the news organization. Another person said some hedge funds, including Citadel, were also involved.

Private equity underwriters (PEU) brought us nonlobbyist lobbying where billionaire founders set U.S. policy via "personal relationships" with legislators, governors and Presidents.

Indicted Blue Team Senator Bob Menendez had Blackstone and Apollo in his top five donor list.  Did any PEU insiders use their nonlobbyist lobbying relationships to fuel their insatiable greed?  PEU personal devices may shed light on that question.  

It will be interesting to see what evil flies out of PEUdora's WhatsApp box.

BIG's Take on PEU WCAS

Matt Stoller wrote on BIG:

“Awesome! Cha-ching!” 

That’s the phrase that an executive at private equity-owned financial firm U.S. Anesthesia Partners (USAP) used after acquiring yet another Texas anesthesiology practice, with the intent of hiking prices on Texas patients. And “Cha-ching!” was the right way to put it, since the excess profits amounted to tens, or even hundreds of millions of dollars, in just one medical specialty, in just one state. 

But the new quote should be ‘uh oh.’ Because today, the Federal Trade Commission, led by Chair Lina Khan, filed suit against USAP for monopolization, as well as its owner, New York City-based private equity firm Welsh Carson, which from its offices on Park Avenue engineered the entire strategy of gouging patients in Texas. It’s an important suit, for reasons I’ll go into, and it also reflects a more aggressive antitrust enforcement regime, and skepticism of private equity in health care.

Stoller quoted a NYT piece that concluded "private equity funded consolidation led to price increases" in a number of medical specialties.  He stated Welsh Carson ripped from that playbook.  

Actually WCAS wrote the playbook.   Brian Regan, General Partner in the Healthcare Group, implemented it at USAP.   Also in the Healthcare Group, former Medicare Chief Tom Scully.

WCAS is currently employing that very strategy in orthopedics with United Musculoskeletal Partners.  The December 2021 press release stated:

Welsh, Carson, Anderson & Stowe ("WCAS"), a leading private equity firm focused exclusively on the healthcare and technology industries, and Resurgens Orthopaedics, one of the nation's largest orthopaedic practices, today announced the formation of a new venture focused on building the premier physician-owned orthopaedic platform in the country.

The press release referenced WCAS past medical practice companies that rolled up

WCAS has deep experience building industry leading companies in partnership with physicians, including: US Radiology Specialists, US Anesthesia Partners, US Acute Care Solutions, US Oncology and USPI, among others.

WCAS' man at US Oncology is now CEO of Humana.  Bruce Broussard continues to use Humana funds for joint ventures with WCAS.  Humana makes significant profits from Medicare and Medicaid.  It invested alongside WCAS in occupational medicine, urgent care, primary care and home health/hospice ventures.

WCAS cashed out of its stake in Kindred Hospice, since renamed Gentiva by another private equity underwriter (PEU), Clayton, Dubilier and Rice. I'm sure WCAS's profit on Kindred Hospice was a majorly awesome cha-ching!

Tom Scully's ability to quote statistics supporting WCAS' greed is analogous to the Saudi Crown Prince bin Salman's recent data filled slide show.  They both have nefarious ends, more money, power, and influence....

Matt Stoller does fine work.  Consolidating and overcharging, it's been going on for a long time.  Yet, the future holds more threats than simple roll-ups.

In 2021 WCAS started Valtrius.  It is essentially a healthcare venture capital company.  Valtrius sounds like a herpes medicine and its aims to grow healthcare profits in virus like fashion.

Valtrius recently launched TailorCare:

Valtruis, a WCAS company, announces the launch of TailorCare, a risk-based company that provides evidence-based, clinically-designed care navigation to patients living with joint, back, and muscle pain.
TailorCare partners with in-market providers to deliver high-quality MSK care. This includes primary care and specialty providers, such as United Musculoskeletal Partners (UMP), TailorCare's anchor strategic orthopedic partner.
Layering of PEU affiliates will be the next challenge for any Federal Trade Commission. 

A round of applause for anyone who can hold, even turn back the PEU surge overrunning our healthcare system.  

Politicians Red and Blue love PEU, and increasingly, more are one. 

Update 9-25-23:  KKR owns healthcare provider Brightspring and appears ready to take it public.  Buzzfeed found serious care problems at the company.

Friday, September 22, 2023

Senator Bob Menendez Indicted for Self Serving

U.S, Senator Bob Menendez (Blue Political Team- New Jersey) got caught with his hand in the halal jar.   NBC News reported federal agents found forbidden booty during their years long investigation:

Agents found more than $480,000 in cash, “much of it stuffed into envelopes and hidden in clothing, closets, and a safe,” including jackets bearing the senator’s name that were hanging in his closet, as well as more than $70,000 in Nadine Menendez’s safe deposit box, the indictment alleges. 

Menendez "dismissed the allegations against him in a statement, saying prosecutors have 'misrepresented the normal work of a Congressional office.'"

So the "normal work" of a Congressman is to personally profit from the application of influence on behalf of "insiders?"  Thank you for that clarification, Senator!

Menendez' insiders included the founder of IS EG Halal.   In early 2020 the Egyptian Prime Minister decreed the company as the only entity capable of granting halal certification. 

This decree legitimizes the establishment of IS EG Halal (Edgewater, New Jersey) as Egypt’s sole authorized halal certification entity in the United States for food and beverage products exported to Egypt.

It also established IS EG Latin America SRL for certifying food exports from Latin and South America.

IS EG Halal's website states:

“Halal” in Arabic means permissible or lawful. When it is applied to food or other goods it denotes specific regulations as to which types of food/drink Muslims can consume as well as how those products are prepared. 

So why did IS EG Halal's founder need Senator Menendez?   The indictment states:

Menendez "provided sensitive U.S. Government information and took other steps that secretly aided the Government of Egypt." It also says the senator pressured an official at the U.S. Agriculture Department for the purpose of protecting a business monopoly granted by Egypt to Hana, who is an Egyptian American. 

According to the indictment, Hana and Nadine Menendez "were friends for many years" before she started dating the senator. In early 2018, she informed Hana that she was dating Menendez and "in the following months and years," they worked to introduce Egyptian intelligence and military officials to the senator "for the purpose of establishing and solidifying a corrupt agreement" in which Hana, with assistance from the two other businessmen, "provided hundreds of thousands of dollars of bribes" to the senator and his wife "in exchange for Menendez's acts and breaches of duty to benefit the Government of Egypt, Hana, and others, including with respect to foreign military sales and foreign military financing," the filing alleges.

With Senator Menendez even the date he met his current wife is under a cloud of suspicion.

Open Secrets
showed Menendez' top donors from 2017-2022.  Two of the top five are private equity underwriters (PEU).  Blackstone and Apollo Global Management came in at #3 and #5.  The PEU boys are masters at tapping Uncle Sam's wallet and keeping their unjust preferred "carried interest" taxation in place.  

Everything about IS EG Halal reads PEU.  Worldwide franchise established by Egyptian government. Check.

Product becomes prohibitively more expensive due to change.  Check.

After Egypt disqualified the four previously designated companies, the price paid by retailers to get certified halal beef was expected to increase to about $200 a metric ton, up from about $20, according to a USDA report.
History doesn't repeat, but it echoes.  Recall the bribery of the wife of Congressman John Conyers by Synagro Corporation, an affiliate of The Carlyle Group, another politically connected PEU?  Conyers said at the time:

"Public officials must expect to be held to the highest ethical and legal standards."

The system is designed to produce otherwise.  

Politicians Red and Blue love PEU, and increasingly, more are one.

Wednesday, September 20, 2023

Scheming Billionaires: PEUs Red and Blue

Blue Team Senator Sheldon Whitehouse gave compelling testimony about billionaire efforts to control parts of our national government.  He cited Red Team oriented billionaires shaping the Supreme Court and then currying favor with conservative appointees.  Congress enacted legislation that enables special interest organizations to influence elected officials and impact government operations.

The U.S. grew a new class of billionaires over the last three decades. Co-founder David Rubenstein located The Carlyle Group in Washington, D.C. to tap Uncle Sam's wallet and influence policy.   Carlyle is a politically connected private equity underwriter (PEU).

Rubenstein descends on Capital Hill every time Congress pretends to take a serious run at eliminating PEU preferred "carried interest" taxation.  He dines with Presidents regardless of their political stripes.  

He benefacted his Nantucket estate for many of President Biden's Thanksgiving vacations.  Surely, Sheldon is aware of this given Rhode Island's proximity to Nantucket.

I am grateful the Senator pointed out decades of undue influence by a few of our wealthiest citizens.  It's happened on many fronts and the people steering the politicians reap the benefits.  That's not the common citizen.

Congress designed a system that enables people with more resources to have significantly more influence.  Politicians Red and Blue love PEU and increasingly, more are one.

Monday, September 18, 2023

Musicco Latest to Leave CalPERS CIO Role

Yet another CalPERS Chief Investment Officer is stepping down.  Nicole Musicco leaves the end of September after eighteen months in the role.  Chief Investment Officer reported Musicco is leaving to address the needs of her family.  She is leaving an empty seat at CalPERS, one that has taken considerable time to fill in the past. 

The CIO piece provided some interesting history:

Musicco, the second woman to ever lead the investment division, took the role in March 2022, more than a year after the departure of Ben Meng, who was embroiled in controversy after he approved a $1 billion investment into a Blackstone private equity fund while personally holding $100,000 in Blackstone shares in 2021.

Musicco is a former partner at Redbird Capital Partners, a private equity underwriter.  Watch where she lands once her family situation settles down.  

Not long ago Musicco had a nice interview with Carlyle Group co-founder David Rubenstein.  He hammered the point that she could make bigger money elsewhere.  Might Carlyle or Rubenstein's family office (Declaration Partners) need someone with Musicco's skills?  

Start the music.  There are seats to fill in this version of Musicco Chairs.

Saturday, September 16, 2023

Texas Senate OK's PEU Sponsorship in Paxton Acquittal

The Texas Senate acquitted Attorney General Ken Paxton of all impeachment charges.  Texas Red Team senators carried the voting load that let Paxton stay in office.  

Only two Red senators out of nineteen voted to convict Paxton and they did so on twelve of the sixteen charges.  The other seventeen Red senators found Paxton's actions not to rise to the level of impeachment.

This is good news for Texas elected officials who wish to cozy up to billionaire private equity underwriters (PEU) and marshal state resources on those billionaire's behalf.  It is even better news for Human Abuse Department chiefs who wish to dismiss pesky whistleblowers.  And it means Ken Paxton can once again ask Texas taxpayers for $3.3 million in settlement money for his untoward actions towards the people trying to uphold state ethics standards.

Yeeeehaaawwww! Texas Reds vote for PEU sponsorship!  Line 'em up boys.  We'll have the best billionaire sponsored government anywhere!  Yeeehaawwww!!!

Politicians Red and Blue love PEU and increasingly, more are shamelessly attached to at least one.  Ken Paxton/Nate Paul 2026!

Update 9-17-23:  Paxton never testified to any legislative body on the charges but plans to go on Tucker Carlson's Twitter/X channel to "address the nation."  I hope his future running mate Nate Paul joins him on Carlson's podcast.

Paxton warned the Biden administration to "buckle up."  Paxton would have been wise to have never unbuckled for a lady other than his wife.   Ken, it was your own political party that impeached you in the Texas House.  

I guess it's the Insane Red Team and their billionaire sponsors vs. the Blue Lucys and their billionaire backers.  May the biggest bankroll win.  Ken Paxton/Nate Paul 2026!

The Fort Worth Star Telegram ran an editorial titled:  "A sad day for Texas:  Acquitting Ken Paxton condones corruption, abuse of power."  A Tarrant County judge blamed the "corrupt media" for Paxton's ethical lapses.

Update 9-18-23:  The Texas Senate ensured the Attorney General's office will remain a hostile environment for ethical employees.

Update 9-23-23:   Unfortunately Paxton's unethical behavior was both defended and tolerated.

The evidence is explicit and undisputed that Attorney General Paxton blatantly and continually abused his office and power for personal gain. Time and time again, General Paxton put his own interests above that of Texans. His actions are an unequivocal breach of public trust in the Office of the Attorney General. As legislators, it is our responsibility to ensure that such actions from the chief law enforcement officer in Texas are neither tolerated nor defended.

Paxton's Impeachment Has PEU Odor

Rep. Andrew Murr (Red Team-Junction) said the following in his closing of the Attorney General Ken Paxton's impeachment trial in the Texas Senate:

"Nate Paul brought incredible wealth and a lavish lifestyle to the partnership.  Ken Paxton brought the incredible power of the state.  The defense isn't that he didn't do it.  It's that it doesn't matter because he won the election."

Several months ago PEU Report found that Nate Paul is a World Class private equity underwriter (PEU).  

Texans will soon learn if elected officials are public servants or PEU sponsored.

Politicians Red and Blue love PEU and increasingly, more are one. 

Update:  Texas Reds vote for PEU sponsorship!  They acquitted Paxton on all charges.  Line 'em up boys.  We'll have the best billionaire sponsored government anywhere!  Yeeehaawwww!!!