High Profile Republican Firm, Cerberus, to Sell Freedom
It has come to this. Cerberus–the private equity firm full of well-connected Republicans like John Snow and Dan Quayle–has decided it can no longer continue to invest in Freedom Group, the maker of the Bushmaster assault rifle used in Friday’s massacre at Sandy Hook.
In its statement announcing the decision, it attempts to absolve itself of responsibility for killing 20 children.
In 2006 affiliates of Cerberus Capital Management, L.P. made a financial investment in Freedom Group. Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise. Sales are made only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations. We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition.
It then couches its decision to sell Freedom in fiscal responsibility, not moral complicity.
It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level. The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment. As a Firm, we are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals. It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators.
There are, however, actions that we as a firm can take. Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group. [my emphasis]
But that mention of its clients, including teachers pension plans, is the real tell. As CNN suggests, it was likely pressure from the California Teacher’s pension fund that prompted this decision.
Yesterday we reported that one of the largest investors in Cerberus private equity funds was the California State Teachers’ Retirement System, which subsequently said it would review its indirect investment in Freedom Group (it made no such pledge following the Aurora shooting, where a Bushmaster rifle also was used).
In any case, having made the decision to sell Freedom, things will now get interesting for Cerberus, as the sharp decline in gun stocks will force Cerberus to sell Freedom at a big loss.
Often when something like that happens–most spectacularly when Cerberus decided to sell Chrysler–it asks for a bailout. Will John Snow and Dan Quayle orchestrate a federal bailout for themselves again, as they did with the auto bailout?
Will John Snow and Dan Quayle orchestrate a federal bailout for themselves again
They can try, but I don’t think they’re going to get very far with it. They certainly aren’t going to get much sympathy from anyone outside Wall Street.
Well, FWIW, Bushmaster is pretty much an empty shell anyway, having been made that way after Quayle and Snow and their Cerberus friends bought it several years ago. The key employees they didn’t get rid of, wound up quitting and then they all got back together a year or two ago under a new name once the non-compete clauses in their terminations ran their course. Quayle, Snow and Cerberus were insulated from liability by a couple levels of corporate shell identities and realistically bore little if any chance of ever being held liable for being anything, other than greedy vulture capitalists.
Rather, dumping Freedom Group is almost certainly more a purely stock-price driven move. And that’s where CalPers probably had the biggest impact – they were losing money holding the stock. They made a shitload of money over the last 4 plus years. Not for nothing does one see at gun shows little posters/pictures of Obama over the logo “World’s Greatest Gun Salesman 2009 2010 2011 2012” or similar. And FWIW, the price of ammunition is roughly double what it was when he took office.
Morality? Well, we’re talking the morality of money (the name of a chapter in Atlas Shrugged, for those of you who forgot) and the only moral action is the profitable one. Dead kids don’t count in this calculus, and if they did we’d all be entitled to a lot more explanations from Obama about his drones than some nutjob in Connecticut. As it stands now, BHO is the biggest killer of kids out there.
Thank you for this post, EW.
And thank you, scribe, for your spot-on comment.
@DWBartoo: Yep spot on
There’s an irony in your title, EW. Yes, indeed, Cerberus has been “selling freedom.” The myth of freedom – to those who purchased its guns. Our freedom – those of us who might apparently become the “tactical” victims of the freedom-loving, gun-toting vigilantes:
And of course they’re “selling Freedom” – the corporation. Yeah… there’s no morality here!
thanks for digging up the tpm essay. it descibes my own youthful experience with guns to a “t”, except that that age was a couple of decades before marshall was a gleem in any one’s eye.
i will say though that the first rifle i owned -at 12 – was in fact described as a semi-automatic 22, having a thin cylindrical magazine just under the barrel. the first thing i did with it, under the tutelage of one of my uncles, was to kill a small yellow bird in the top of a walnut tree across the road from my house.
the matter of the use adjective “tactical” is fascinating. it has become a sales term applied to everything from guns to knives and flashlights. i think it might be a stand-in for or intended to evoke in a possible customer thoughts of “police” or “swat team”.
it’s all commercial, all about money, all about manipulating potential customers.
and it’s all just disgusting.
Now remind me, how many members in the US belong to the NEA, the AFT, and police unions…? Because if those organizations do their job, there’s no way in hell that Snow or Quayle are going to get a damn nickel.
We may be in the throes of vulture capitalism, but it’s long past time these unions started to work with the pension funds to insist that we move to a more sustainable kind of capitalism.
Consider this excerpted item…
AlterNet / By Mark Ames
Cerberus Capital: Literally Blood-Sucking the Poor to Make Their Billions
How one company made $1.8 billion by paying peanuts to human plasma donors, and then manipulated the market by restricting supply to the desperately ill.
January 8, 2010 |
Wall Street vampires . Lately, a lot of Americans, including myself, have used the bloodsucking monsters as a metaphor to describe the Wall Street billionaires who rule us, and who are ruining us. Like so many awful stories of the past few years, it turns out that these Wall Street vampire-billionaires really exist, literally. Like all vampires, they live in remote castles, and they feed themselves by luring poor, desperate humans into their dens, hooking them into blood-pumping machines and sucking out their plasma for mind-boggling profits.
Cerberus Capital, one of Wall Street’s most notoriously ruthless leveraged-buyout firms (or “private equity firms” in PC-speak), recently made a $1.8 billion killing on its human plasma investment, a company called Talecris. Talecris was purchased for a mere $82.5 million just four years earlier, meaning Cerberus made 23 times its investment on human plasma. This was accomplished by the most savage, heartless means possible: by paying peanuts to impoverished human plasma donors, who increasingly come from Mexican border towns to blood-pumping stations set up on the American side, jacking up the price of plasma by restricting supply (a lawsuit filed by the Federal Trade Commission accused Cerberus Plasma Holdings of “operat[ing] as an oligopoly”), and then selling the refined products to the most desperately ill—patients suffering from hemophilia, severe burns, multiple sclerosis and autoimmune deficiencies. The products cost so much—one, IVIG (intravenous immunoglobulin) cost twice the price of gold as of last summer —that American health insurance companies have been dropping or denying their policyholders in increasing numbers, endangering untold numbers of people
But Cerberus is more than just about sucking people’s blood and government handouts. Stephen Feinberg also loves killing deer. In fact he loves shooting deer so much that, like the old Gillette commercial, he bought America’s guns ‘n’ ammo industry. Two years ago, Cerberus bought Remington, America’s oldest firearms manufacturer, and since then they’ve snapped up companies making everything from bullets to silencers, which they’re combining into a new firearms monolith called Freedom Group. The free-marketeers at Cerberus are all about freedom.
Luckily for Cerberus, weapons are “flying off the store shelves,” thanks to all the paranoia about Obama “socialism,” fed by all the bailout money that rightwing billionaires like Cerberus have looted. Sales have also been boosted by the wars in Iraq and Afghanistan—in other words, more government handouts for the billionaires, now that they own the guns ‘n’ ammo business. It’s all going so well that Cerberus is planning a huge IPO this year for Freedom Group, which should net another massive payout.
So Cerberus profits on both ends: from the bailouts, and from the backlash against bailouts; from the wars against Muslim terrorists, and from the paranoia back home about an alleged socialist-Muslim-terrorist president.
Either way, the vampires have us where they want us.
Cerberus Capital: Literally Blood-Sucking the Poor to Make Their …
Jan 8, 2010 – Cerberus Capital: Literally Blood-Sucking the Poor to Make Their Billions … Like all vampires, they live in remote castles, and they feed
you are one super-valuable webworld resource.
tx so much for this information.
Aw shucks,oATL…even a blind pig finds an acorn now and then…