skip to Main Content
Rich & Peaceful: Progressive Politics Book Shop Cover

Billionaires Screw People & Companies In Ways Illegal In Other Countries

The Rich Bribing Congress

Our laws let hedge fund managers earn billions screwing people with financial speculation, using insider information unavailable to small investors, in ways that are illegal in every other major nation.

Mostly, hedge fund managers charge massive fees just to invest other people’s money. And most of them do it poorly, with far worse returns than the stock market.

Our laws let private equity and hedge fund managers like Mitt Romney make hundreds of millions of dollars destroying companies. They buy and flip businesses by putting down small amounts of their own cash and borrowing most of the money.

Without carried interest, corporate debt interest, and capital gains tax loopholes, most of their deals wouldn’t even make money.

Their massive bank loans become debt for the acquired company, not for the private equity firm. And the previous CEOs and executives cash out with generous exit packages.

The private equity and hedge fund managers load up so many massive fees, commissions, and dividends, it very often forces the companies to fire people, sell stores or other assets, cut pensions or other benefits, or send jobs overseas.

They may sell the debt of companies and hide it, then sell the company. All these things enrich the CEOs and stockholders but hurt the workers and destroy the company.

Hedge funds and private equity managers have put about 20 retail chains into bankruptcy in just the last year, including Kmart, Sears, and Toys R Us.

Hedge fund billionaire Eddie Lampert merged Kmart and Sears, loaded them up with debt to make windfall profits, sold off buildings, then charged Sears rent for what used to be their own buildings.

Between 2005 and 2010 alone, Lampert spent over $5 billion on Sears stock buybacks to manipulate the price of stocks to enrich himself and his stockholders.  By doing this, he neglected upgrading the stores to keep customers and failed to bail out the Sears pension fund.

At Sears/Kmart alone, about 200,000 people lost their jobs over the last 10 years as revenue plummeted 50%.  This kind of cheating would be illegal in most countries, yet we let these billionaires walk out of bankruptcy court and remain in control of the companies.

Private equity firms have bought up even essential services like ambulance companies, fire departments, and water companies. They often raise prices, cut costs, and aggressively sue people for payment to make more money.

Private equity firms now own 25% of all ambulance companies. The resulting mechanical breakdowns of ambulances, slower response times, failing heart monitors, and expired medicines actually result in patient deaths.

And private equity firms are buying nursing home chains and extracting billions in profit, leading to skyrocketing health code violations.

For example, Carlyle Group, one of the richest private-equity firms in the world, bought the ManorCare nursing home chain, the second largest nursing home chain in the US, serving about 25,000 patients.

After the Carlyle Group took over, health code violations like neglect of feeding assistance and personal hygiene, overdoses, bedsores, falls, infections, failing to take care of injections, colostomies, and prostheses, and even broken bones increased.  Some facilities had roaches and ants all over.

Carlyle extracted $1.3 billion for investors in 2011, selling nearly all the hundreds of nursing home buildings and assisted care facilities, forcing ManorCare to pay rent to the new owners.  Carlyle also charged $80 billion in fees, eventually forcing extreme staff shortages and forcing ManorCare into bankruptcy.

Corporations are setting up so many layers of subsidiary companies that lawyers find they can’t sue nursing homes for severe abuse of elderly residents because the assets are held in owner corporations overseas.

Now hedge funds and private equity companies are buying up payday lenders, bail bond providers, low-income homes for rent, and prison phone services to extract more money out of poor people.

Chuck Falcon’s new book Rich & Peaceful: Progressive Politics details these abuses and more in the chapter Rigged For The Rich.

© Copyright 2018 Peace & Harmony Press. All rights reserved.

Back To Top