It started with faux billionaires in the
Hamptons and a fat-cat tycoon (or at least an actor wearing a cat mask)
in Washington. Now, a union-led campaign against wealthy private equity
firms is going global.
Beginning Wednesday, the Service Employees International Union,
one of the country's biggest unions, will call upon people to attend
protests on July 17 in 100 cities in 25 countries. The rallying cry
will be: Take back the economy from buyout firms that the union says
have exploited tax loopholes to amass great wealth at others' expense.
think the buyout industry and the way it operates are systematic of
what's wrong in this economy," said Stephen Lerner, director of the
union's private equity project. "We want to make them responsible
The private equity industry counters that
the union is using street theater and overheated rhetoric to bolster
its membership rolls.
"They're using a battering ram of
increasingly extreme and hysterical attacks," said Douglas Lowenstein,
the president of the Private Equity Council, an industry lobbying
group. "They've undermined any opportunity for constructive dialogue."
S.E.I.U.'s latest effort is an escalation of a fight that began last
April, when it began a broad campaign against private equity firms with
a study questioning the value that the leveraged buyout industry adds
to the national economy.
Since then, the union has trained its sights on two of the biggest private equity firms around - the Carlyle Group and Kohlberg Kravis Roberts - as it seeks to clamp down on the handsome profits that those companies reaped during the buyout boom.
The union argues that buyout executives like David M. Rubenstein of Carlyle and Henry R. Kravis
of Kohlberg Kravis have gamed the tax code, reaping huge gains by
piling debt on companies their firms have acquired, only to deduct the
interest from their corporate taxes.
acknowledge, however, that changing the tax code could upend the modern
corporate regime and say they have not endorsed any specific proposals.
union also argues that the attention on private equity firms has been
justified by the huge role they now play in the economy. Companies
owned at least in part by Kohlberg Kravis employ more than 816,000
people, according to the firm's Web site - more than the population of
The fight has been contentious at times, notably
during an altercation between an S.E.I.U. member and Mr. Rubenstein at
an industry conference in Philadelphia. And the bulk of the S.E.I.U.'s
campaign has taken place amid the credit squeeze, which has all but
squelched private equity's lifeblood of striking deals.
To the union, however, that same economic malaise has hurt ordinary workers more.
want to take back the economy from individuals like Henry Kravis and
companies like K.K.R. who have made billions gaming the system while
millions of Americans are having a hard time paying for their car," Mr.
For its latest campaign, the S.E.I.U. has enlisted
the irascible comic Lewis Black for a video professing bewilderment at
how buyout executives make their living via financial engineering. It
is teaming up with groups like MoveOn.org and Amnesty International to drum up participation in the July 17 mass protest.
in tune with the times, the union plans to introduce a political angle
in its attack against private equity: The S.E.I.U. will highlight the
fund-raising that Mr. Kravis, a longtime Republican donor, has done for
Senator John McCain,
that party's likely presidential nominee. The goal, S.E.I.U. officials
say, is to highlight the unwillingness of Mr. McCain to consider
revamping the tax code and make a partisan appeal to a possible
Democratic administration and more Democratic Congress.
The union will encourage supporters in other countries to support similar tax code measures.