Monday, April 1, 2024

Biden's Big Money Night with Clinton & Obama

News stories on the star studded gathering of former Presidents at a fundraiser for President Joe Biden did not mention private equity underwriters (PEU).  President Bill Clinton helped PEUs get a foothold in their early days, while President Barack Obama helped them survive and thrive through the financial crisis.  President Biden stacked his cabinet with PEUs after taking office in 2021.

Forbes reported in June 2012:

When President Bill Clinton's time in politics was up, he landed at Ronald Burkle's private equity firm, Yucaipa Companies. For six or so years after he left the White House, Clinton served as an adviser to various Yucaipa investment funds and those funds paid him a lot of money. Clinton finally ended his relationship with Yucaipa, reportedly walking away from a huge $20 million payday, because the relationship was deemed to be overly sensitive for Hillary Clinton’s political ambitions.
Both the Red and Blue political teams utilize the automatic door between politics and private equity.  Private equity firms pay former politicians huge fees for a few hours work.  The Clintons and Obamas have cashed in from such engagements.

The "work" is generally very part time, involves obscene fees and can come directly from the PEU or an affiliate (owned company).  KKR owned Laureate Education paid Bill Clinton $18 million for his service as "honorary chairman."

Former President Obama's PEU ties are not as public as Clinton's.  Key Obama advisors became PEUs.  Obama has a family office, meaning his wealth warrants a personal PEU like operation.  Last May Michelle Obama co-founded PLEZI and will serve as strategic advisor.

Both Clinton and Obama ponied up to the greed and leverage boys and continue to ride alongside them.  Seven months ago Bloomberg Law reported:
Former US President Bill Clinton is teaming with Israeli billionaire Ziv Aviram to launch a climate fund with about $1 billion of start-up capital.

The announcement came at 2023 Clinton Global Initiative, relaunched in 2022 from self-banishment for shameful insider profiteering.

The fine print at EcoBridge's website states:
*EcoBridge is creating an Impact Advisory Board to gain the insight of its members and to help the fund with respect to its analysis of climate sustainability. President Bill Clinton will serve as chair of the Impact Advisory Board, advising EcoBridge on climate impact across different political, economic and government environments. The Impact Advisory Board will be supported by the Clinton Foundation, to align EcoBridge’s investment focus with the educational and climate impact goals of the Foundation. 

Disclaimer: Neither President Clinton nor the Bill, Hillary and Chelsea Clinton Foundation will provide any investment advice to the fund or will be responsible for the fund’s operations. President Clinton is not a Co-Founder of EcoBridge, but has agreed, along with the Foundation, to provide certain services to support EcoBridge’s mission, including advising on political structures, climate change issues, global trends, or making introductions to persons or companies within President Clinton’s or the Foundation’s network. Because President Clinton and the Foundation are not registered or licensed as financial professionals, the services that they will provide to EcoBridge will not include valuation of investments or making recommendations or decisions to buy, sell or hold investments. All investment advisory services provided to the fund will be performed by EcoBridge. President Clinton and the Foundation are receiving compensation for their services.
The disclaimer did not state the amount or type of compensation Clinton is to receive from Ecobridge.

The Israeli consulate of the Marshall Islands found this to be news.  Their story characterized the venture as::
EcoBridge is a New York-based investment manager with a strategic presence in Israel that has a mandate to manage private investment funds with a global focus.
Clinton's non co-founder, co-founder offered in a Sea Change Radio interview:
This morning, President Clinton and I were together on stage and announced about new fund. We call it EcoBridge, which is a climate tech fund, where the intention is to invest in cutting edge technologies that can reduce the climate edge effects. And we intend to raise between one to $2 billion and start as quickly as possible to invest in companies in a global scale, not just, uh, in Israel, or not just in the United States, but globally. 

So we need to find areas where there’s enough mature companies that are already active in this space. We still checking where will be the most effective. We have pretty good idea already, but our first challenge is in the next half year, year is to raise enough money that we’ll have enough means to invest in those companies.
He zeroed in on CO2 reduction identifying three areas for investment:
.....agriculture food (production) is the number one. The second one is constructions and the materials for the construction, which releasing enormous amount of c o two to the air. Then of course transportation in in the whole, the jets, the trains, the boats, the vehicles, which is the third in the line.
It's an investment that apparently needs government subsidy/assistance:
And it’s, it’s clear that at the beginning, the profit and the revenue from this kind of activities will be low. So government should invest first, but in parallel, the business sector should find solutions.
The feel good mantra for outsized profits arose during the interview:
I see in this activity, although it’s a fund for profit for investors, but in my perspective it’s philanthropy.
Yippppeeee!  The world has yet another David Rubenstein (patriotic philanthropy) and Sam Bankman-Fried (effective altruism).

Back to the gathering Presidents.  Obama offered to frustrated Americans: 
There are "structural problems" that frustrate people. "If you're working hard, and your paycheck is getting stretched, beyond the breaking point, and you're worried about rent, and you're concerned about the price of gas, it's understandable."
Hard working Americans have seen the super rich PEU class, now occupied by Clinton and Obama, garner the vast majority of economic gains.  

While Clinton, Obama and Biden have all been PEU enablers, the Red Team has been more overtly shameless in their PEU love.  It's an odd and disturbing form of bipartisanship, one that has consistently worked against the will of citizens.

Politicians Red and Blue love PEU and increasing, more are one.  It even has its own Legends Tour.

(And no this is not an April Fool's post.  It just happens to be April 1st.)

Update 4-2-24:  The day after the Blue "big money" show, Biden bundlers gathered to increase the take.  NYT reported:
To be considered a “presidential partner,” donors have been asked to raise $2.5 million, while a “principal shareholder” is asked to raise $750,000.
Is that a limited or general partner? 

Also, enough people have worked for a PEU affiliate and experienced the carnage as funds shift from staff and quality operations to paying annual management fees, much higher interest expenses and giant cash withdrawals by their "sponsor."  It's traumatic for those jettisoned and leaves a long lasting cultural stench.  That sounds structural to employees.  

My wise friend wrote:
Whether you believe in climate change or not, one thing is for sure.  Politicians will go into heat over funding schemes that provide them new positions to profiteer and screw the public in ways Masters and Johnson would find novel. 

Even if you accept the screwing the politicians and PEU's have given the public, the most nauseating and damaging aspect to a capitalistic society is they have removed themselves completely from the vicissitudes of economic activity and its effects.
The structures embedded in the deals to scrape every morsel of sustenance through fees from the operating entity struggling for life are devoid of a true managing operator mindset. It's parasitic at best, sadistic when blooming. 
Add in all the other games they play and ask yourself once you wire them the money, how do you have recourse? They are in control, They are where all the flows concentrate, what is their risk? Really none. Rewards Unlimited. 
There was a coup, it was supported by the Fed and our politicians. They should have just let them fail. I don't think there's a way out of this.

Update 4-5-24:   A member of the British Parliament has awakened to the evils of private equity.