Northwest labor press., August 17, 2007, Page 23, Image 23

...Tax breaks for billionaires
(From Page 22)
giant Blackstone recently purchased a
7 percent stake in Deutsche Telecom.
“This story sounds all too familiar
to us. In the late 1980s and early 1990s,
the largest leveraged buyout (LBO),
RJR-Nabisco, resulted in 43,000 lost
jobs. Another large LBO of that era,
Safeway, began with mass layoffs in
the late 1980s and ended with an attack
on employer-provided health care that
led to a prolonged strike in Southern
California in 2004.
“In 2005, a private equity firm
bought up a whole string of largely
mothballed coal mines, reopened the
mines and then took those mines pub-
lic as International Coal Group. The In-
ternational Coal Group bragged about
its safety record in the public offering,
then six weeks after the offering
closed, twelve miners died in the Inter-
national Coal Group’s Sago Mine.
“So the booming growth of private
equity funds, the magnitude of their fi-
nancial resources, and their disregard,
if not disdain, for the labor movement,
is the real issue for us – the predatory
role of private equity players like
Blackstone, KKR (Kohlberg Kravis
Roberts and Company) and Texas Pa-
cific.
“Their business strategy puts them
inherently at odds with the workers’ in-
terest in maintaining living standards,
and at odds with our members’ interest
in having employers and pension funds
that focus on long-term value.
“The AFL-CIO Executive Council
recently passed our first resolution on
this question, demanding action by
Congress — now that we have a Con-
gress that listens to the concerns of
working families.
“We will insist that Congress re-
quire private pools of capital to play by
the same societal rules that others ad-
here to.
“We will demand the same measure
of worker participation in corporate
governance that we do in public corpo-
rations.
“On top of that, we must insist on
hedge fund and private equity trans-
parency, labor force consultation, and
adequate labor, health, safety, environ-
mental and management standards.
“That’s why just this past week the
AFL-CIO publicly challenged the
flawed $4 billion initial public offering
of buyout firm Blackstone.
“We called upon our regulator, the
Securities and Exchange Commission,
to enforce the law in examining
whether Blackstone should be subject
to stricter regulation as an investment
company. We are also communicating
with investors (both pension funds and
individuals) regarding the serious con-
cerns we have with the governance and
tax treatment of this offering.
“If Blackstone can avoid necessary
oversight, it’s only a matter of time be-
fore hedge funds and other investment
pools use similar strategies to avoid
regulation and disclosure require-
ments.
“Not on our watch.
“Finally, we are calling upon our
Congress to take a closer look at the
tax treatment of private equity and the
large cut of all profits (typically 20 per-
cent — called the “carry”) that private
equity firms typically take.
“I cannot emphasize strongly
enough the degree to which the ten
million members of the AFL-CIO
To My
Good Friends in
Organized Labor
Have a Great
Labor Day!
stand shoulder to shoulder with you as
we confront the threats posed by a
global economy that is regulated solely
in the interests of financiers, with little
or no regard for the economic and so-
cial consequences that financialization
is imposing on societies.
“From our standpoint, we are en-
couraged by the remarkable progress
you are making in shaping the public
debate, in particular your call of the G-
8 heads of state to work on new trans-
parency and tax rules for private equity.
“A rising chorus in Europe is chal-
lenging the private equity worldview
that companies are simply a collection
of assets to be bought and sold, instead
of being treated as social institutions
and long-term wealth creators.
“Your work has identified the core
challenge and the necessary response:
the rise of private equity is a symptom
of globalization, and the public policy
and global union response must be
supranational in scope. The OECD
meeting on private equity was a very
helpful start of an international cam-
paign to regulate private equity and
hedge fund investment.
“I hope this forum will allow us to
explore the ways that we can stand to-
gether, confront this threat and con-
tinue to move the debate forward.
“We believe the AFL-CIO can play
an essential role in supporting the Eu-
ropean Trade Union Confederation
and the international labor move-
ment’s response to hedge funds and
private equity.
“In particular, we are focused on
three critical areas of engagement with
private equity: in the workplace, in the
capital markets, and with regulators
and public officials in the policy realm.
“We can only do these things if we
capitalize on our power and make
working people and their concerns the
center of the debate.
“And the power we need can only
come from the solidarity in our cause,
and especially solidarity with our
brothers and sisters across the globe.”
The strength,
prosperity, and
well-being of the
nation depend on
America’s working
men and women.
Happy Labor Day
and
Thank You!
Peter DeFazio, Democrat
U n i t e d S t a t e s C o n g r e s s
O r e g o n , D i s t r i c t 4
Paid for by DeFazio for Congress P.O. Box 1316, Springfield, Oregon 97477.
M or e Th an A C e nt u ry o f Se r vi ce
o n B e h a lf o f O re g on W o r k er s
1887 — Oregon Becomes First State in the Nation to Honor Workers by Recognizing
Labor Day.
When Unions Succeed,
Oregon Prospers!
U.S. SENATOR
RON WYDEN
Paid for & authorized by Wyden for Senate
PO Box 3498 • Portland, Oregon • 97208
1903 — Bureau of Labor Established.
2007 — Oregon Labor Commissioner Dan Gardner Proud to Protect the Rights of
Oregon’s Working Men, Women and Children.
Oregon Labor Commissioner
Dan Gardner thanks all
Oregon workers
for their dedicated service
to their state and
their communities.
Paid For by the Committee to Elect Dan Gardner
AUGUST 17, 2007
NORTHWEST LABOR PRESS
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