President Joe Biden has long loved private equity underwriters (PEU). His son Hunter is one and Biden's Cabinet is chock full of them.
Flashback to 2012 to 2015 when Hunter Biden was coursing the PEU world: Fox News reported:
"Our objective was to build a diversified private equity platform, which would be anchored by a globally known Wall Street brand together with a globally known political name," Galanis testified. "Our goal — that is, Hunter Biden, Devon Archer and me — was to make billions, not millions."
"Burnham was the focal point for integrating a ‘Biden family office’ into a large-scale financial company with international influence," he explained, adding that they acquired some of Hunter Biden’s companies like RSP Investments and Rosemont Seneca Advisors.
The greed and leverage boys dominate the executive and legislative branches. The Carlyle Group cut its teeth hiring former political heavyweights and then levering their influence for PEU gains. Carlyle co-founder David Rubenstein is famous for his role in the Great Eskimo Tax Scam.
In 1986, Stephen Norris, a lawyer for Marriott, learned of a change to the federal tax code recently initiated by Sen. Ted Stevens, Republican of Alaska. It allowed Alaska Native corporations, created under the Alaska Native Claims Settlement Act, to sell their paper losses at a discount to companies that could use them to reduce their own taxes. Norris started a business that matched companies with Native Alaskans and persuaded Rubenstein to leave Shaw, Pittman and join him. In a single year, they brokered the transfer of a billion dollars in losses, earning at least ten million dollars in fees. In 1987, they were on the verge of another big transfer when the government closed that loophole. The episode became known in Washington business lore as the Great Eskimo Tax Scam.Jason Galanis did a Native American deal that landed him in jail:
Galanis is serving a 14-year prison sentence after pleading guilty to securities fraud based on bonds issued by a company affiliated with a Native American tribe in South Dakota. The funds were reportedly supposed to be used for certain projects but were instead used for his personal finances.Selling influence, taking advantage of Native Americans, these are foundational events in PEU history.
The Biden PEU story shows how long the game has been underway. For decades politicians Red and Blue have loved PEU, so much so, at times they are nearly interchangeable.
