Wednesday, January 27, 2021

No Rush to Tax Wealthy


The Biden Team indicated tax increases on the wealthy are down the recovery road:

With a narrowly Democratic-controlled Senate and House, we’re unlikely to see any major tax law changes early in Biden’s presidency, outside of the proposed Child Tax Credit and Earned Income Tax Credit expansion—and so far, that’s just a temporary measure. Biden’s top economic advisor, Jared Bernstein, said during a Politico event that tax increases early on are “going to be very dependent on economic conditions.”  

The uber wealth have already recovered:

Billionaires are minting money during the pandemic, even as millions of Americans join the ranks of the poor.

US billionaires have collectively become $1.1 trillion -- nearly 40% -- richer since mid-March, according to a report published Tuesday by progressive groups Institute for Policy Studies and Americans for Tax Fairness.
Twelve years I wrote:
Taxing wealthy people at rates imposed under Ronald Reagan produce cries of socialism and communism.

Since then billionaires called the shots in Washington.  Biden's team is chock full of greed and leverage boys.  Deferring to the billionaire private equity underwriter (PEU) class is a bipartisan tradition.  

Politicians Red and Blue love PEU.  The average citizen?  Not so much.

Update 3-14-21:  The PEU boys got a mention in Senator Sherrod Brown's Wall Street vs. Workers speech.

Tuesday, January 26, 2021

PEU Leon Black's Epstein Oddities

Apollo Global co-founder Leon Black was very close with serial child molester Jeffrey Epstein and funded the abuser's extravagant lifestyle with $158 million in payments between 2012 and 2017.  Apollo hired Dechert to investigate Eptein's ties with Leon Black. 

Black paid Epstein $50 million in 2013, $70 million in 2014 and $30 million the following year.

That sort of compensation is unusual. Estate planning attorneys and tax advisers are typically paid by the hour or by the transaction. IRS regulations forbid tax practitioners from charging contingent fees “in connection with any matter before the Internal Revenue Service.”

Private equity underwriters (PEU) hate paying money to Uncle Sam but love taking cash from the federal wallet.   If Jeffrey Epstein was such a tax genius why didn't Black use him at Apollo.

Apollo never retained Epstein for any services

Not that Black and Epstein didn't try, according to Dechert's report.

While Black did not try to pressure his co-founders to use Epstein, he did positively comment on the substantial value of Epstein’s services and, at Epstein’s repeated request, did try to introduce Epstein to his co-founders. In the end, neither co-founder hired Epstein or consulted with him on their personal matters. In light of these facts, the statement that Black “never promoted” Epstein is not false but could have been more precise. And it is clear that no Apollo employee other than Black ever seriously considered hiring Epstein, much less actually retained him. 

Extravagant payments for tax advice fail the smell test. 

Black was a frequent visitor to Epstein’s Manhattan mansion, confided personal matters to him and visited his homes around the globe.

In one dispute over Epstein's egregious fees Jeffrey "referenced personal matters shared in confidence."  Is that subtle blackmail?  Epstein is not alive to answer the question.

Dechert investigated on behalf of Apollo's concerns.  This was not a criminal investigation.  

Dechert interviewed more than 20 witnesses (some more than once), including Black, current and former Apollo employees, the co-founders of Apollo, current and former Family Office employees, and current and former legal counsel to obtain their recollection of events that may have been relevant to Dechert’s investigation. With only one exception, Dechert interviewed every witness that it had requested; that witness, a former employee of the Family Office, declined to participate in the investigation but is not believed to have any additional information likely to be material to the investigation.

Dechert did not interview Epstein's accomplice Ghislaine Maxwell, his chef Adam Perry Lang, chief pilot Larry Visoski  or any employees of Jeffrey Epstein.

As Dechert said they found no evidence of Black's involvement with Epstein's international pedophile operation despite Black having a "social relationship with Epstein from approximately the mid-1990’s to 2018." 

Payments were made on an ad hoc basis based on Black’s perceived value of Epstein’s work. Dechert has seen no evidence suggesting that Black ever compensated Epstein for any service other than Epstein’s legitimate advice on trust and estate planning, tax issues, issues relating to artwork, Black’s airplane, Black’s yacht, and other similar matters, philanthropic issues, and the operation of the Family Office. Moreover, such advice was vetted consistently by Black’s other advisors, including Family Office employees, Paul Weiss, and other outside legal, accounting and tax professionals.  

The above mentioned Paul Weiss refused to be interviewed by Dechert.

Black regularly visited Epstein’s townhouse in New York to either discuss business or to meet other prominent guests who were visiting Epstein, including well known businessmen, political figures, diplomats, scientists and celebrities. In general, one-on-one breakfast meetings between Black and Epstein would be more common for business meetings, whereas afternoon meetings with other guests would be more common for social visits.    

Leon Black recalls only flying on Epstein's Lolita Express one time.   He made two visits to Little St. James, Epstein's private island in the Caribbean.  Locals call it "Pedophile Island" and "Island of Sin."  Black had family with him for these trips.

As their relationship fractured Black loaned Epstein over $30 million.  Despite requests for repayment over $20 million stood outstanding when Epstein committed suicide in a New York City jail.  

"Good friend who frequently visited" does not fit with completely unaware of Espetin's pedophile engineered life.  Paying a friend for tax advice on a percentage basis (to the tune of $178 million) fails the smart investor test.  Black is way more than a smart investor.

Elements of Leon Black's Epstein story sound whitewashed.  That does not mean he is guilty of any crimes.  That would require an investigation into areas Dechert avoided. 


Despite the broad mandate of “any Apollo affiliate” the report omits numerous ties between Epstein and Apollo executives. 

For example, John Hannan, a senior partner and co-founder at Apollo, reportedly made a $166,667 donation to Epstein's foundation and replaced Epstein on the Black Foundation Board in 2013. Those details were not included in the report. 

 On a similar note, Marc Rowan, an Apollo co-founder and senior director, reportedly met with Epstein at his townhouse a few years ago. That detail did not make into the Dechert report either. Mr. Rowan is expected to become Apollo’s CEO by July despite previously stepping away from day-to-day duties last summer to make “more time for his Hamptons restaurants.” 

Likewise, William Mack, a founder and former managing partner of Apollo Real Estate Advisors, reportedly donated to Epstein’s charity. That donation was not included in the Dechert report either. 

Dechert’s report says they were assisted in document gathering by Paul, Weiss, Rifkind, Wharton & Garrison LLP. A footnote in the report says that firm has previously served as Apollo’s outside counsel, which creates a potential conflict.

Update 1-28-21:  Ghislaine Maxwell said in a deposition that she learned of Epstein's child abuse from the newspaper when he was charged.  That's as laughable as Lord John Browne's deposition for the Texas City refinery explosion that killed 15 people and injured 180.

Update 1-31-21:  Someone else noticed the odd nature of Black hiring a nonprofessional and then paying him an outrageous sum of money

Update 12-31-21:  A jury found Epstein accomplice Ghislaine Maxwell guilty of sex trafficking underage girls. 

Update 1-9-22:  A jury convicted Ghislaine Maxwell, however the behavior of one juror could result in the judgement being thrown out of court.   That juror is an Executive Assistant for The Carlyle Group. What are the odds a low level PEU employee could indirectly help Leon Black?  Irony or just the ubiquitous nature of the greed and leverage boys?

Update 1-25-22:  Leon Black sued Apollo co-founder Josh Harris for conspiring against him with Black's illicit lover.  These people do not know when to shut up and slither away.  I imagine Black's wife has told him to keep his balls/wallet inside his pants and quit thinking with his crotch/billfold.  

Update 6-29-22:  Epstein associate Ghislaine Maxwell got 20 years for her crimes, however the powerful people who abused girls are yet to be named.

Update 11-29-22:  Reuters reported:

Leon Black, the billionaire co-founder of private equity firm Apollo Global Management Inc, was sued on Monday by a woman who said he raped her two decades ago in the late sex offender Jeffrey Epstein's Manhattan mansion.

Friday, January 22, 2021

Biden Missed Greed

 President Joe Biden's inauguration address cited many challenges facing our country.

Anger, resentment, hatred.

Extremism, lawlessness, violence.

Disease, joblessness, hopelessness.

Later he added:

This is a time of testing.

We face an attack on democracy and on truth.

A raging virus.

Growing inequity.

The sting of systemic racism.

A climate in crisis.

America’s role in the world.

He left out greed, which hollowed out Main Street over the last several decades.  Ten years ago a business reporter wrote me saying:

I have seen so many people -- particularly those in their 50s - 70s -- taken apart by what has happened in their industry as greed has hollowed out the economy. These are people took pride in their jobs and held themselves to this invisible standard that we all just took for granted, but is being wiped out.

The Carlyle Group scares me more than anything I've ever seen on Wall Street. It seems to exist to corrupt politicians and it's hard to know who they even represent.

I watched a video interview of (David) Rubenstein and his arrogance is really beyond tolerance. He was going on about the debt ceiling problem and how there would need to be cuts in services and higher taxes. When the reporter asked him about tax on carried interest he turned really disdainful and said that this "only" amounted to $22 billion over some number of years and this was not serious money. Boy, nothing like everybody doing their small part to save the country from oblivion!

Red and Blue political teams catered to the PEU class, (private equity underwriter).  

Billionaire PEU founders became household names as they made government policy, while eviscerating the middle class.

PEU owned companies rose dramatically over the terms of Presidents Cliinton, Bush (W), and Obama.  Trump gave the billionaire boys the tax cuts they said they deserved.  Virtually none of these new found riches went to workers.  Executives and sponsors took the proceeds for themselves.

Americans know the crumbs haven't fallen from the king's table, despite numerous assurances that something other than their lifeblood would trickle down.  Greed has done this.  The PEU boys had decades of not doing their part.  

The Biden Cabinet is chock full of PEUs.  I don't envision Biden's greed and leverage boys turning on their own, however that is required.  

America's rising middle class was the golden goose.  The PEU boys killed it.

Update 1-25-21:  This is what the greed and leverage boys helped create:

A study published a few years ago by two of America’s most respected political scientists, Princeton professor Martin Gilens and Benjamin Page of Northwestern, concluded that the preferences of the average American “have only a minuscule, near-zero, statistically nonsignificant impact upon public policy”. Instead, lawmakers respond almost exclusively to the moneyed interests – those with the most lobbying prowess and deepest pockets to bankroll campaigns.

The capture of government by big business has infuriated average Americans whose paychecks have gone nowhere even as the stock market has soared.

The populist movements that fueled both Bernie Sanders and Trump began in the 2008 financial crisis when Wall Street got bailed out and no major bank executive went to jail, although millions of ordinary people lost their jobs, savings and homes.

Update 2-1-21:  The Carlyle Group has a new affiliate, Two Six Technologies to pull millions from Uncle Sam's wallet for defense and intelligence.

Update 2-7-21:  Former Labor Secretary Robert Reich wrote " Many are understandably angry after being left behind in vast enclaves of unemployment and despair."  His piece ignores the role the Blue Team had in selling the average citizen down the road the last two and a half decades.

Thursday, January 21, 2021

Billionaires Recommended Trump Pardons

Billionaire Peter Thiel recommended President Trump pardon former Google engineer Anthony Levandowski.  The judge called it "the biggest trade-secret crime I have ever seen."

As an employee, Levandowski downloaded more than 14,000 files containing the intellectual property of Google's former self-driving car division, Waymo, before leaving to found Otto, which was soon acquired by Uber.

Thiel is a private equity underwriter (PEU) with The Founder's Fund and  Mithril Capital

Last year Trump granted clemency at the request of billionaire David Rubenstein, co-founder of The Carlyle Group, a politically connected private equity underwriter.

U.S. President Donald Trump yesterday granted clemency to the so-called junk bond king Michael Milken, among a spate of pardons. Milken, 73, was sentenced in 1990 to 10 years in prison after pleading guilty to fraud and racketeering charges — of which he ultimately served only 22 months. His pardon was backed by a number of high-profile figures, including media baron Rupert Murdoch and Carlyle Group chairman David Rubenstein.

The billionaire PEU class has had outsized influence on public policy for two decades.  Trump tax cuts primarily benefited the super wealthy.  

Billionaires not only make policy, they use their power to push pardons.

Update 9-28-21:  Milken got mention as a bad guy in 2010 for rumor mongering and naked short selling.

Update 5-30-22:  Billionaire Elon Mush tweeted it is morally wrong and dumb” to use the word “billionaire” as a pejorative, adding, “If the reason for it is building products that make millions of people happy.”  What if the reason for that billionaire is decades of preferred taxation?  What if that billion in wealth arose from surprise medical billing?

Friday, January 15, 2021

Biden's Cabinet Level Science Advisor is PEU with F-Prime Capital

President Elect Joe Biden appointed Eric Lander, Ph.D., to his Cabinet as Science Advisor.  Lander is listed as a member of F-Prime Capital's Scientific Advisory Board.  

In 2014 Lander co-authored a WSJ article "Private Money Pays Off for Medicine" with Lou Gertsner, Former Chairman and now Senior Advisor for The Carlyle Group.  Carlyle is a politically connected, Washington, D.C. based private equity underwriter (PEU)

A 2016 STAT article stated:

Current and former colleagues contacted by STAT described Lander as brilliant, prickly, and brash, as having “an ego without end,” as “a visionary” who “doesn’t suffer fools gladly,” and as “an authentic genius” who “sees things the rest of us don’t.”

Lander is a co-founder of Millennium Pharmaceuticals, Infinity Pharmaceuticals, Verastem, and the cancer vaccine startup Neon Therapeutics (Third Rock Ventures). He is a founding advisor to cancer genomics company Foundation Medicine and has close ties to venture capital firm Third Rock Ventures, a major investor in the CRISPR company Editas.

President Elect Biden may have a diverse, talented Cabinet but it has a distinct PEU odor.  Will the public see how good Lander is at explaining the value provided by the greed and leverage boys?

Many U.S. workers felt the sting of private equity ownership in smaller paychecks, reduced retirement funding and other benefit cuts.  That was my experience working for a PEU healthcare affiliate. Executives at the Lander level took all the gains, leaving the people who did the work with no crumbs from the C-Suite table.

The Biden Cabinet is chock full of PEUs.  That's a bad sign for the average citizen.  Politicians Red and Blue love PEU.

Update 2-7-22:  PEU Lander promised ethical behavior but failed to deliver.  

“Everyone is afraid of him. Lander yells — screams. He’ll ask the same thing over and over but getting louder and louder each time.”

Politico reported:

Lander “retaliated against staff for speaking out and asking questions by calling them names, disparaging them, embarrassing them in front of their peers, laughing at them, shunning them, taking away their duties, and replacing them or driving them out of the agency. Numerous women have been left in tears, traumatized, and feeling vulnerable and isolated.”

Ugly American.  Toxic greed and abuse of power are signature PEU behaviors.

PEU Trade Group Halts Political Donations


A private equity lobbying group that represents some of biggest buyout firms, including Blackstone Group Inc and KKR & Co Inc, said on Monday it has paused all political donations following the storming of the U.S. Capitol last week.

“Our country faces enormous health, economic, and social challenges that take precedent over politics. In this environment, the American Investment Council is pausing all political contributions to candidates from the AIC PAC,” a spokeswoman for the Washington-based American Investment Council said in a statement.

The Blue Team should be in good shape for donation restarts as President Elect Biden plans to fill key cabinet positions with private equity underwriters (PEU).

The trade group rebranded from Private Equity Growth Capital Council in May 2016.  I offered a new name for the trade group, Private Equity Capital Knowledge Executed Responsibly.  For some reason the greed and leverage boys did not PECKER.

Wednesday, January 13, 2021

Biden Appoints Another PEU

President Elect Biden picked Kurt Campbell as his White House Coordinator for the Indo-Pacific region.  Campbell is Chairman, CEO and co-founder of The Asia Group. a strategic advisory and capital management group specializing in the dynamic Asia-Pacific region.  

Campbell helps connect companies to private equity underwriters (PEU).

The Asia Group Capital Advisory Partners, LLC (TAG CAP) is a boutique capital advisory firm specializing in cross-border transactions across the Asia-Pacific region. The practice is anchored in Hong Kong and Washington D.C. and covers markets from the Mekong to the Potomac. The firm focuses on connecting private equity, multinational corporate, sovereign, and non-traditional sources of capital with leading technology, consumer, energy, and healthcare assets that reflect political, socioeconomic, and strategic dynamics at play throughout our core markets.

Kurt Campbell knows what the needs of the greed and leverage boys, as do many in the Biden cabinet.

Monday, January 11, 2021

Biden CIA Director is PEU

President Elect Joe Biden continues to appoint private equity underwriters (PEU) to key positions in his administration.  Biden's CIA Director appointee is William J. Burns.  

Burns has five years of PEU experience with The Blackstone Group.

“Bill has been one of the small group ’in the room’ dealing with most of the critical international issues of the last 20 years.  His innate understanding of geopolitical risk will serve us well as we seek new investment opportunities and partners globally,” said Tony James, President and Chief Operating Officer, Blackstone.  “He brings with him an impressive network of relationships built over a distinguished 33 year career and a unique perspective on the investment implications of international affairs. We are delighted to have him join the firm and we welcome him as a Senior Advisor to Blackstone.”

“I’m pleased to be joining Blackstone,” added Ambassador Burns. “I have long been impressed by their deep understanding of and approach to global business.  I feel that we can both learn from one another’s experiences and knowledge and I look forward to working closely with management and their experienced investment teams.”

Private equity growth over the last two decades contributed to income inequality.  Burns is the latest greed and leverage boy to join the Biden team.  Will he make the trip to Davos for the annual World Economic Forum meeting?

Annual Gathering of Global Tamperers Looms

The 2021 World Economic Forum meeting in Davos, Switzerland with kick off in less than two weeks.  

Mission:   The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas.

Global tamperers have facial recognition on their list for 2021.  The forum released a whitepaper on that topic in December.

Facial recognition technology (FRT) creates many socially beneficial uses, mostly through enhanced authentication and identification processes, such as unlocking a smartphone, boarding a plane and accessing online public services. But it has also come under increasing scrutiny for potentially undermining privacy, misidentifying people, perpetuating systemic racism and contributing to surveillance infrastructure.  

The Forum identified income inequality as a concern in 2015.  Global tamperers include legions of private equity underwriters (PEU).  The greed and leverage boys prioritize increased interest expense and massive gains on their initial equity investment over employee wages and benefits.

After raising the issue of income inequality who got a tax break from the Trump administration?  Policy making billionaires, the same billionaires who conduct deals at the annual World Economic Forum meeting in Davos.

Consider the WEF's 2015 warning if income inequality persists:

The inherent dangers of neglecting inequality are obvious. People, especially young people, excluded from the mainstream end up feeling disenfranchised and become easy fodder of conflict. This, in turn, reduces the sustainability of economic growth, weakens social cohesion and security, encourages inequitable access to and use of global commons, undermines our democracies, and cripples our hopes for sustainable development and peaceful societies.

Income inequality grew worse from 2014 to 2020.  The COVID-19 pandemic exacerbated the divide between the rich and poor.

The United States just experienced an uprising from people feeling disenfranchised from persistent lies by President Trump and his allies.  I can't help wonder how many felt abandoned by political, business, cultural and other leaders of society prior to their manipulation.

Friday, January 8, 2021

Rubenstein Doesn't Heed His Advice

 Carlyle Group co-founder David Rubenstein spoke via a World Economic Forum podcast.  He said:

"Nothing was ever done that's meaningful in life without somebody providing some resistance to it," says Rubenstein. "You've got to plow through that resistance if you're actually going to accomplish anything."


Yesterday Rubenstein said the following on CNBC's Squawk Corner:

"I don't think that condemnation today is the most important thing.  It's easy to condemn somebody...what we really want to do is protect our democracy.  The most important thing we should do is worry about what we should do for the next 13 days."  

So much for rising to the occasion.  Everyone involved was "trying to protect our democracy."  The violent rioters did it on the basis of President Trump's serial lies.  The Capital Police were trying to protect our democracy but couldn't see the threat because the Trump team doesn't consider his rabid followers to be problematic.  President Trump was trying to protect and extend his Unitary Executive version of democracy.  

Condemnation is in order, not mealy statements that ensure Carlyle can continue catering to politicians of both stripes.  Rubenstein wants to keep access to Uncle Sam's wallet and preserve billionaire policy making, a feature of our democracy for more than a decade.

Thursday, January 7, 2021

Biden Commerce Secretary is PEU


Just over a year ago Providence Journal reported:

Rhode Island remains unable to extricate itself from the private equity firm co-founded by Gov. Gina Raimondo before she entered politics, even though the state’s initial $5-million, 10-year commitment to Point Judith Capital expired years ago.

And, once again, the state appears to have no say in the matter.

The firm lists Governor Raimondo as General Partner Emerita.  Biden's cabinet adds another private equity underwriter (PEU).  President Elect Joe Biden's may be diverse but it has a PEU odor from the greed and leverage boys.

Politicians Red and Blue love PEU.

Update 1-8-21:  President Elect Biden said Raimondo took on financial predators.  Funny, she founded one.

Update 10-23-21:   Biden's Commerce Chief entered the bowels of greed and leverage at The Milken Global Institute and said the following:

The opposition among some lawmakers – all Republicans as well as some moderate Democrats – to raising taxes on wealthy individuals is "almost religious fervor," said Secretary of Commerce Gina Raimondo at the 2021 Milken Institute Global Conference this week.

Milken, Rubenstein, Schwarzman et al created the PEU religion.  They created the greed and leverage fueled fever.  Raimondo should know given her PEU background.

Update 2-17-22:  Matt Stoller@matthewstoller wrote·

Whoops looks like Commerce Secretary Gina Raimondo slipped on a banana peel and accidentally forgot to disclose $150k payment from the pharmaceutical industry.
TweetSara Sirota@SaraLSirota · 1hPer newly available doc, Commerce Sec Gina Raimondo exercised $65 - $150K in stock at her husband's Big Pharma-backed biotech startup PathAI. Her initial financial disclosure form signed Jan '21 only mentioned his salary there, no options.

Private company equity stakes have long been a problem in federal financial filings.  

The Red Team's custom news outlet spun this ethics lapse as a China conflict.  Remember politicians Red and Blue love PEU.  It's them they serve, not us.

Update 7-10-22:  On Meet the Press Raimondo called the public "cranky" for giving feedback on the impact of inflation to elected leaders.  It brought to mind Jared Kushner calling White House attorney resignation threats "whining."  Both Raimondo and Kusher are PEUs, one Red, one Blue.

Update 1-4-23:  Raimondo has been mentioned as a future Treasury Secretary should Janet Yellen move on.

Update 3-1-23:  Bloomberg said Raimondo is the center of Biden's China policy.

Update 10-31-23:  Forbes asked one contributor covering Raimondo to back off before stopping his articles altogether.