Monday, January 9, 2012

PEGCC to Fight Romney PEU Taint

The Private Equity Growth Capital Council (PEGCC) plans to defend the Bain Capitals of the world, currently under attack given Presidential hopeful Mitt Romney's frontrunner slot in the Republican Presidential nomination.  Romney's Bain Capital, like Blackstone and The Carlyle Group, are private equity underwriters (PEUs).

Romney competitor Newt Gingrich and financial backer Sheldon Adelsen made a 30 minute film exposing PEU practices, job cuts and exportation, loading firms up with debt/higher interest expense, dividend bleeding and flipping companies for doubles and triples after a few years.

PEU Report started in 2007 when I noticed leadership had turned to greedership.  The Private Equity Council, the name of the lobbying group before it added Growth Capital, used advantaged minorities to save their preferred carried interest taxation.

After the 2008 financial crisis, PEU's said they posed no systemic risk.  Horse hockey!  The Carlyle Group was saved by a CalPERS $681 million capital injection. 

The unholy alliance of politicians and big money resulted in PEU's keeping low to no taxes.  The Carlyle Group is a virtual nonprofit organization, according to its IPO filings. 

PEGCC can dust off a prior campaign showing the industry as job creators, just as they pulled a deja vu on "no systemic risk."

Rest assured, more candidates over time will carry the PEU taint.  It's rare to find an ex-politician without a Senior Advisor PEU position.  It's the pool from which candidates arise and the funds that serve as political oxygen.

Newt Gingrich, slime-ball extraordinaire and ex-adviser to PEU Forstmann Little, will use billionaire Sheldon Adelsen's money to make points made numerous times on PEU Report.  The competition to win and send trillions in government spending to one's friends is compelling.

I offer an updated name to the private equity lobby.  It's Private Equity Capital Knowledge Executed Responsibly (PECKER), much to the benefit of investors.

Gird yourself for their next campaign.  Will it be a non-debt, non-equity government injection or a leveraged recapitalization?  Things could get feverish.

Update 1-18-12:  Newt Gingrich solidified his sleazy nature by taking $60,000 to speak effusively about private equity for JLL Investors.  Dealbook elevated JLL's founder in a PEU puff piece.  Credibility established, JLL's CEO took a box knife to Newt's dangling gonads, which he wears on the outside of this pants.  Sleaze personified...

Update 2-7-12:  Business Insider tracked PEU lobbying.  It failed to include lobbying by PEU affiliates.