private equity at Brave New Films

Menlo Park Action at KKR Headquarters: Take Back the Econom

2008-07-20T12:44:24Z

Protest at the Menlo Park, CA headquarters of buyout giant KKR.

MAMA MIA! John McCain is the Loophole King!

2008-07-20T12:44:24Z

SEIU demonstration 7.17.08 outside McCain for President HQ, calling on John McCain to take action against tax loopholes for corporate buyout tax breaks for people like his supporter, Henry Kravis.

For more, check out the War on Greed .

Watch the video

Billionaires Are Gouging Your Grandparents

2008-07-20T12:53:14Z

Just how is buyout billionaire Bruce Wasserstein gouging our country's elderly? Let's connect the dots: Wasserstein is the CEO of Lazard and has made billions by buying companies, cutting costs, and turning quick profits. Lazard owns and manages Atria Senior Living—the third largest assisted-living provider in the U.S.—as a private equity investment. Atria has been mismanaging its facilities left and right, making medication mistakes, wrongly locking in residents, and even failing to call emergency services.

What is Atria's response? The company slapped residents on a fixed income with steep rent increases to as much as $8,500 per month. What's more, Atria pays its staff a measly average of $8-10 an hour with unaffordable healthcare, while Wasserstein made $41 million in 2007 alone. That's right, Wasserstein is getting rich off our nation's grandmas and grandpas, a gross injustice that we have exposed in our newest video, Bruce Wasserstein: Gouging Grandma.

We have joined the SEIU to demand that Wasserstein stop gouging our grandparents and respect its employees. Here's what you can do:

Sign the petition from Campaign to Improve Assisted Living and Tell Bruce Wasserstein to Stop Gouging Seniors.

E-mail this video and the petition to all your friends, family members, and coworkers.

Spread the word on sites like Digg, which will help create a public outcry to pressure Wasserstein and Lazard.

Make sure everyone knows we won't stand for Wasserstein's despicable behavior, and make sure it happens today.

Watch the video

Lewis Black Rants Against Corporate Greed

2008-06-16T21:29:58Z

From Stephen Lerner, Director of the SEIU’s Private Equity Project:

The Democratic primary is over, and Senators Obama and McCain now face an electorate angry over high gas prices, stagnant wages and a sour economy. The call for change is so loud and so persistent that it’s already become a campaign cliché.

Cliché or not, it’s a major force driving this election, and whichever candidate harnesses the country’s mood will win this election. Henry Kravis, founder of KKR—effectively the nation’s second largest private employer and one of the largest buyout firms in the nation—has more to do with the country’s unease than people imagine.

He’s a symbol of the “Just Us” corporate business mentality that so many Americans want to see change. Rich beyond belief, he still lobbied tenaciously last year against a little reform that would have leveled the playing field between hedge fund managers and buyout executives and teachers, nurses, and other middle class Americans. At stake was the elimination of a single tax loophole that saved Henry Kravis up to $96 million in 2006. Because of the loophole, Kravis and a handful of other buyout executives are able to pay a 15 percent tax rate on much of their income, far less than the tax rates that many middle class Americans pay.

That loophole was just the tip of the iceberg.

Henry Kravis Wins the Loophole of the Year Award

2008-06-19T09:29:54Z

Yesterday, 10 members of the Working Families Party were joined by 5 SEIU 1199 members and 25 members of SEIU Local 32BJ outside the Waldorf Astoria, where Billionaire tax-avoider Henry Kravis of the private equity firm KKR hosted a Columbia Business School award dinner. We had an award for Henry too, the Loophole of the Year Award, for the man who single-handedly dodged his way out of $96 million in taxes in one year alone.

Holding the award plaque and a giant banner, we protested and passed out leaflets to passersby asking why Kravis gets to pay a lower tax rate than nurses and hotel doormen. As tuxedo-clad guests streamed in to the event, we got some great reactions. No one was willing to give Kravis our award for us though, and the Hotel claimed to have lost our tickets. Guess we’ll have to keep looking for Kravis at his next gala event.

Sign our petition and tell our presidential nominees to close the Kravis tax loophole.

Watch the video

Workers Demand that Buyout Billionaires Pay Their Fair Share

2008-07-20T12:53:16Z

http://warongreed.org

May 5th, 2008: Works gather outside the Waldorf-Astoria in NYC to give Henry Kravis the "Loophole of the Year" award.

Watch the video

Buyout Billionaires' Recession-Proof Secrets Revealed

2008-07-20T14:08:16Z

How is it possible for us to be entering a recession while buyout billionaires like Henry Kravis saved $96 million through tax loopholes in 2006 alone? That's just one buyout billionaire, in one year, making use of one loophole! Just think how much these private equity crooks are costing taxpayers who are already battling financial hardships and home foreclosures.

Our earlier War on Greed films garnered over 350,000 views and a lot of attention from The New York Times, The New Yorker, and The New York Post, not to mention the Private Equity Council. Such wonderful feedback made us realize that now is a crucial time to connect the dots between buyout billionaires and everyday Americans suffering through this recession. And in talking with many of you, we thought a short, animated video could be a great means of conveying the gross misconduct of Henry Kravis, KKR, and the policies of buyout exploiters. So Paris, Lee Stranahan, and the team went to work to bring you our first animated video.

Now for the serious part. Join over 18,000 people who have already signed our petition demanding our presidential candidates close the Henry Kravis tax loophole. Then, please send this film along to ten people. Make sure Larry the Loophole is seen by friends, relatives, and schoolmates through Facebook, MySpace-the works! We already started spreading our message yesterday outside the Waldorf-Astoria Hotel in New York, when we joined the SEIU to present Kravis with the "Loophole of the Year" Award.

Last week, journalist David Sirota wrote, "As the facts trickle out about the private equity scam, you can bet public pressure for change is going to start building." Yes, we've presented the facts here with animated satire and humor, but our hope is that this will allow us to reach tens of thousands of people together.

By the way, our Condi Must GO video was a smashing success. Not only was it the #1 Video on YouTube News and Politics, but we received over 70,000 signatures for our petition. However, we still need more to reach our goal. Help us send Condi packing by sending Condi Must GO to all of your friends to sign.

Watch the video

The War on Greed starring Larry the Loophole

2008-07-20T12:53:17Z

Buyout industry executives with multimillion dollar incomes have been amassing fortunes by exploiting a major tax loophole. Their tax privileges have robbed the public purse and placed the burden on working- and middle-class taxpayers. Sign the petition demanding the Presidential candidates close the buy-out industry's tax loopholes at warongreed.org

Watch the video

Blackstone, the New Enron

2008-06-11T15:35:02Z

David Morris has an excellent piece over at AlterNet about how the New York Public Library will rename its main branch the Stephen A. Schwarzman Library in return for his contribution of $100 million. Schwarzman, as Morris points out, is the co-founder and chairman of the board of the Blackstone Group, which "is to the first years of the 21st century what Enron was to the last years of the 20th century."

Blackstone really has it all: a co-founder who makes hundreds of millions a year; the ability to outspend all other private equity firms combined in lobbying Congress to keep tax loopholes alive; and investors who have lost about 60 percent of their money since the company's initial public offering last year, while Schwarzman got billions from his share of the sale.

Nice to know Blackstone is giving something back to the public that they've bilked, and being rewarded for it too!

For more info, check out our ongoing War on Greed.

Watch the video

The Homes of Henry Kravis

2008-03-22T21:55:01Z

Let’s take another peek [Lifestyles theme] into the “Lifestyles of the Rich and Cranky.”

The old rich pride themselves in … well, in having some pride. For example, they tend to set their venerable mansions behind tall walls and shrubs that discreetly obscure their wealth. It's a matter of class. On the other hand, the new rich are more inclined to crassly flaunt their abundance, building garish houses that amount to neon signs screaming; “Look how rich I am, sucker!”

How surprising then that one of the showiest of these look-at-me celebrities of wealth has gotten pouty about being featured in a movie that, after all, is about him. He's Henry Kravis of Manhattan, South Hampton, and... well, so many places. In Henry’s life, everything is about him. He heads an eponymous Wall Street equity firm that essentially borrows money to take over corporations that other people built. To pay off his lenders, Kravis sells off whole chunks of the captured corporation. Then he fires thousands of workers, slashes the wages and benefits of those who remain, and pockets the savings for himself.

The $5 Billion Man

2008-03-14T16:23:18Z

Private equity executive Stephen Schwarzman made $5.13 BILLION last year.

Not too shabby. I think that is somewhere around 100,000 times what the average American made last year.

But let's be fair, most of that income was in stock from Blackstone's IPO - stock that has been falling since its initial offering last June. Out of that $5.13 billion, Steve's salary was a mere $350,000 - oh and $179,482 in perks. Chump change, really.

But what's that $350.2 million in cash distributions I am reading about? That wouldn't be carried interest income, would it? You know, that "special" income that fund managers get to pay 15% taxes on rather than the 35% their salary is taxed at.

Hmmm ... A quick calculation shows that the carried interest tax loophole may have saved our friend Steve $70 million last year. Not too shabby, Steve.

Get involved. Go to www.WarOnGreed.org and sign the petition to close the private equity's tax loopholes.

Super Return '08: Private Equity's Stake

2008-03-08T01:14:01Z

Will private equity lose a part of their “WE ARE THE GOOD GUYS!” argument?

Private equity heads converge in Munich this week. The conference has a far more somber tone than in prior years.

Limited partners at the meeting acknowledge that returns will be lower because of the credit crunch. We won’t go into private equity’s hand in creating that phenomena; we’ll just stay with the fact that fewer deals will get done.

An interesting debate has developed regarding sovereign wealth funds and their participation as investors in private equity funds. The head of pension fund CALPERS, (the California Public Employees’ Retirement System) acknowledged that the presence of such investors will require additional scrutiny.

Legislation is being presented this week in the California State Assembly that would preclude CALPERS from investing alongside these sovereign wealth funds.

If this passes and becomes a standard across all public pension money, private equity will lose a key foundation of its argument that the ultimate beneficiaries of their success are the millions of workers who receive these pensions.

With whom will the private equity funds side? Clearly, the ones with the deeper pockets.

Calling Henry Kravis

2008-07-20T12:53:18Z

Giving up is certainly not something we do here at Brave New Films. This time however, we had to throw in the towel. For weeks, our team repeatedly tried to reach Henry Kravis, the star of our War On Greed video series.

From interns to producers even Director Robert Greenwald himself all tried their luck at calling Mr. Kravis to invite him to share his point of view and to give him an opportunity to speak for himself. We left messages with the switchboard operator, his assistant, and his voice mail became our acquaintance. His PR firm never responded, and obviously, neither did Mr. Kravis.

We would like to add that aside from simply picking up the phone, we proposed Mr. Kravis the sweet deal of meeting with him at his own time, at the location of his choice, at his convenience. All he had to do was say the word and we would have followed. We offered to post the transcript of the would-be interview in its entirety on the web, so that his words would not be misinterpreted or lost in translation. Unfortunately, our perks didn't interest Mr. Kravis, and we have yet to hear from him. Mr. Kravis: you can't say we never tried.

Watch the video

Happy Birthday, 16th Amendment!

2008-03-21T18:48:20Z

On this day in 1913, the 16th Amendment was ratified. It was the first graduated income tax and was implemented later in the year as part of the Underwood Simmons Tariff Act. This was significant because previously, taxes were apportioned according to population (Pollock v. Farmers Loan and Trust Co., 158 U. S. 601 [1895]). The Sixteenth Amendment took the focus away from whether taxes "are direct or indirect by giving Congress blanket power to lay and collect taxes on income 'from whatever source derived,' without any apportionment or regard to any census." This tax season, can you imagine population and the census being the most important question? How would that change things? How would it affect what we focus on or that for which we fight?

What you may not know about MLK. Spanish subtitles.

2008-06-25T08:45:13Z

http://warongreed.org/dreams.php

"Equality means dignity. And dignity demands a job and a paycheck that lasts through the week."

The War on Greed is exactly this kind of fight. The livelihoods of families have been directly attacked by the actions of buyout billionaires like Henry Kravis putting Wall Street's special interests ahead of his 800,000 employees... and pocketing $51,000 an hour in the process.

The first step must be taxing these buyout billionaires at a fair tax rate. It will not solve all the problems, but it is a strong and forceful beginning. With the presidential campaigns underway, it is the perfect time to force this issue into the campaigns the way we did with Wal-Mart and Iraq for Sale.

As our friend Rev. Yearwood, leader of the Hip Hop Caucus, has said: "We are facing a lunch counter moment for the 21st century."

Please join us at our virtual lunch counter by signing the petition to presidential candidates demanding they pledge to close the loopholes and tax the tax dodgers. Buyout billionaires are a menace to our economy. People are hurting, badly, and we must take beginning steps to bring the issue of corporate greed and economic equality to the nation's attention.

Watch the video

Private Equity Continues To Wreak Havoc On American Workers

2008-02-01T19:13:50Z

Bush administration anti-trust regulators have just approved the sale of Midwest Air Group Inc., located in Milwaukee to Texas based private equity firm, TPG Capital for $450 million in cash. This came after the Justice Department closed their investigation of the acquisition.

In addition to reinforcing just how much the system is aligned with the corporate greed merchants, the Midwest sale also demonstrates that financing takeovers with debt is not the only purchasing mechanism at private equity firms disposal. Of course, the potentially disastrous implications for company workers remains the same; it's not how they do it, it's what they do.

Amidst the usual public relations hyperbole that the acquisition would benefit Midwest employees by promoting job growth and a healthier airline, the truth is that Midwest began laying off workers immediately prior to the closing. Almost 400 employees, pilots, flight attendants, mechanics and dispatchers of subsidiary Skyway have already lost their jobs.

It appears that one person who was prophetic about Midwest’s sale, was unsuccessful suitor AirTran Chairman and CEO Joe Leonard who said the following before the deal closed.

The Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm. Private equity investors are laser focused on generating short-term returns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs. If the Midwest board is successful in selling the company to a private equity investor, the Midwest employees should be concerned about their job security and Midwest's customer service is sure to suffer.

And Kevin Healy, AirTran vice president of planning offered this.

It is unfortunate for the employees of Skyway who will lose their jobs. Under the AirTran plan they were ensured of increased opportunities as we expanded the combined network. For other employees of Midwest, I fear this is just the tip of the iceberg.

Of course, the deal provided Midwest management with windfall payouts and job security. Midwest Chairman and CEO, Timothy Hoeksema will as get a payout of more than $10 million and four senior vice-presidents will receive six or seven figure sums as well.

Once again we see here the evidence of a broken system in this country that benefits the few at the expense of the wealthy. Our laws enable corporate greed merchant to trump the rights and dignity of American workers and it’s high time to take a stand and do something.

Please support working Americans by joining Brave New Films War On Greed. Sign the petition, write your elected officials, spread the word to friends and family that the time for change is now.

Private Equity Does Davos

2008-01-29T15:50:22Z

A very interesting piece in The New York Times about those warriors for egalitarianism, private equity executives.

Here is the part I found most interesting:

Last week was a good time to check in on the state of private equity, because most of the private equity bigwigs - including Mr. Rubenstein, Henry Kravis of Kohlberg Kravis Roberts, Stephen A. Schwarzman of Blackstone Group, Leon Black of Apollo Management, Glenn Hutchins of Silver Lake and Jonathan Nelson of Providence Equity - were gathered in one place: Davos, the site of the annual World Economic Forum.
On the one hand, there was a distinct feeling at Davos that private equity was not on the hot seat - at least not as Topic A among the world's economists and financiers. This time it was the sovereign wealth funds that got most of the scrutiny. "We're no longer the object of so much scorn and attention," said Mr. Rubenstein one morning, as he trudged through the snow, wearing a North Face ski jacket over his banker's pinstripes.
On the other hand, back here in the real world, private equity - and all it represents - remains as contentious as ever. Just days before arriving in Davos, Mr. Rubenstein was swarmed by some 50 protesters during a speech at the Wharton School of the University of Pennsylvania.
The protesters, who were escorted out of the auditorium by the police, had come to protest Carlyle's acquisition of a nursing home company. Among other things, they were championing efforts to establish a union at the company - which of course would impair Carlyle's efforts to cut costs if it were successful.
As a protester with a megaphone challenged him, Mr. Rubenstein shot back - sarcastically - "I think a remedial English course would be helpful." (He later called the protester and apologized.)
When Mr. Rubenstein was finally able to begin his speech again, he began by saying that the Golden Age of private equity - a phrase coined by Mr. Kravis at the peak of the buyout boom - had turned into the "Purgatory Age, where we're going to have to atone for our sins a bit."

First of all, the fact that the face of the Bush playground known as the Carlyle Group (not to mention the bin Ladens in the past), David M. Rubenstein, is admitting that the buyout bosses have committed "sins," tells you that the bad pr they are getting from people like us is registering. They obviously realize all their unadulterated greed is starting to become well known and a liability.

Second, if there are protests at Wharton, then they really are in trouble. I went to Penn and did a minor at Wharton. It is Establishment Central. Donald Trump went there. I haven't seen him wearing flowers in his hair while driving his hybrid lately.

If these guys are being protested by 150 people at Wharton, then you know the jig is up. And they are scrambling to protect themselves.

So, while we appreciate your change in rhetoric, Mr Rubenstein, it is well past time to display it in your behavior (see nursing home and union if you don't get my drift).

The Greatest Greed

2008-03-08T01:14:09Z

As a former partner in a private equity firm, I have seen greed at all levels.

In my opinion, there is no greater exemplification of private equity greed than the taking public of a portion of the management companies of private equity firms. Blackstone and Fortress were two that pulled it off. KKR filed documents to go public and several others, including The Carlyle Group, were rumored to do IPOs; however, market conditions kept the latter few from swindling the public markets to line their pockets. The moves by Blackstone and Fortress proved prescient: They made out like bandits.

Blackstone went public at $31 a share on June 22, 2007. This netted the firm’s partners $3.7 billion. The two founders had the best paydays. Steve Schwarzman had a nearly $450 million payday with a residual 24% ownership in the company valued at $7.5 billion. According to public filings, Schwarzman received cash payouts of $400 million the year prior. His co-founder partner, Peter Peterson, cashed out $1.9 billion and retained a 4% stake in the company.

Fortress came out in February 2007. Their five founders had a payday of $409 million. This was after taking combined distributions of $447 million the year prior.

Both companies had a short spike in stock price post-close and have since been trading below its IPO price. Did most institutions cash out at the spike leaving the crumbs for the average investor that has lost money?

Articles on Steve Schwarzman estimated his net worth at $10 billion before the IPO. The IPO nearly doubled his net worth.

Stay tuned – how the Blackstone partners cashed out $3.7 billion in its IPO and avoided paying taxes on it.

What you may not know about Dr. Martin Luther King

2008-07-13T21:27:57Z

Today we honor Dr. King's birthday. We all know him because of his historic impact on civil rights, but many don't realize that later in life he fought just as passionately for the rights of workers and against the entrenched institutions of injustice.

"Equality means dignity. And dignity demands a job and a paycheck that lasts through the week."

The War on Greed is exactly this kind of fight. The livelihoods of families have been directly attacked by the actions of buyout billionaires like Henry Kravis putting Wall Street's special interests ahead of his 800,000 employees... and pocketing $51,000 an hour in the process.

Watch the video

The first step must be taxing these buyout billionaires at a fair tax rate. It will not solve all the problems, but it is a strong and forceful beginning. With the presidential campaigns underway, it is the perfect time to force this issue into the campaigns the way we did with Wal-Mart and Iraq for Sale.

As our friend Rev. Yearwood, leader of the Hip Hop Caucus, has said: "We are facing a lunch counter moment for the 21st century."

Please join us at our virtual lunch counter by signing the petition to presidential candidates demanding they pledge to close the loopholes and tax the tax dodgers. Buyout billionaires are a menace to our economy. People are hurting, badly, and we must take beginning steps to bring the issue of corporate greed and economic equality to the nation's attention.

War on Greed: Fight for the Dream

2008-07-09T07:04:09Z

On this day celebrating the birth of Dr. Martin Luther King who immortalized the words “I have a dream”, we should all stop and take a moment to remember the compelling message of hope that he gave as a gift to us all.

To Dr. King, racial equality was just part of the inspired and virtuous future he envisioned for our nation. He also dreamt of a society where economic fairness would become part of the essential fabric of our democracy. Dr. King’s stirring and inspirational words allowed every man, woman and child to visualize their deserved place in the sun, a society of inclusion without the divisions of class built with the brotherhood and generosity that he believed all men and women capable of. That was his dream for us, and it should be our dream to honor him by fulfilling that.

Today, the reality is that the goals of ending poverty and economic disparity that Dr. King articulated so eloquently have still not been achieved. There are still formidable obstacles built upon foundations of greed standing in the way, and a growing economic disparity that prevents millions of Americans from being able to realize his dream.

Nothing represents these obstacles more than leveraged buyout (private equity) firms such as KKR, led by billionaire Henry Kravis. Companies like KKR and men like Kravis are the antithesis of what Dr. King stood for, seekers of limitless wealth for the few at the expense of the many. Private equity firms like KKR generate huge profits by acquiring public companies with primarily borrowed money. They then take them private to ensure secrecy and often dissect and restructure them for the purpose of selling the company later. In the process, these firms sometimes lay off workers, cut wages and restrict medical benefits to drive up the stock price and increase profitability, insuring a higher sales price. Kravis and others like him also benefit from tax breaks unavailable to the average American. He pays a tax rate of only 15% on a majority of his $450,000,000 annual income, percentage-wise, less tax than many teachers, firemen, and policemen pay.

Brave New Films ongoing “War on Greed” campaign seeks to educate the public about how leveraged buyout firms like KKR operate and the damage that they often do. This new video in the series, “Fight For The Dream” tells the story of the workers at Accuride’s Rockford, Illinois plant; a company bought by KKR, and contrasts the exploitation they faced with Dr. King’s message of equality and dignity.

How the private equity buyout industry works

2008-07-08T01:26:47Z

Jeff Faux, author of The Global Class War, explains how the private equity buyout industry works, and how it hurts American workers and our economy.

Watch the video

Behind Henry Kravis' buyout of Accuride

2008-06-07T16:40:19Z

http://warongreed.org/facts.php

KKR made $79.8 million on the buyout of Accuride. Jeff Faux, author of The Global Class War, explains.

Watch the video

Congress needs to close the buyout industry's tax loopholes

2008-06-10T18:39:33Z

http://warongreed.org/facts.php

Jeff Faux explains that Congress has the power to change the tax code and close the buyout industry's tax loopholes that let them rake in millions while paying less percentage in taxes than regular people.

Watch the video

War on Greed: Rev. Yearwood on MLK's dream

2008-07-08T05:32:55Z

Rev. Lennox Yearwood from the Hip Hop Caucus:

40 years ago, Dr. Martin Luther King Jr. died so all of us could have human dignity and equality here in America. He died to bridge the divide between the rich and the poor. He died so white and black could all come together, so we could all have human dignity. He understood that economic rights were at the core of the fabric of human dignity.

As we fast forward to the 21st century, multi-billionaire wall street tycoons like Henry Kravis and companies like KKR are causing that dream to become a nightmare.

Watch the video

Wal-Mart Lobbies Above Retail Value

2008-03-22T21:54:50Z

This warms the heart:

Wal-Mart's message to America is "Save money. Live better." Its motto in Washington might best be summed up another way: Spend more. Lobby harder.
The world's largest retailer spent nearly $1.8 million in the first six months of 2007 and is on pace to break the nearly $2.5 million it spent for all of 2006.
While overall spending on lobbying appears to be slowing a bit, some industries, such as private equity, and companies, such as Wal-Mart Stores Inc., are bucking the trend.

Why it's only Wal-Mart and private equity that are upping their lobbying. Phew. I thought it was corporate types who were anti-worker or something. Now I feel better.

One of the reasons I enjoyed Walmartopia so much was that it was so refreshing to see things told like they are. No spin. Well, there is no spin for this either. Wal-Mart is spending more money to convince those in Washington to support their ideas, even though most lack merit.

What to do. Keep fighting these greedy un-American forces of corporatism.