THESE ARE THE PLUNDERERS
with authors Gretchen Morgenson and Josh Rosner
“Private Equity.” Those two words together sound ever so restrained and elite, even contained. In reality though the world of private equity is rough and destructive and affects all of us from patients seeking health care to workers losing their jobs. There are more than $10 trillion in private equity assets under management. And many public pension funds as well as ordinary members of the public are invested. Not private at all...
I've been following financial sector malfeasance and scandals my entire adult life. And, I did an instructive 5-year stint in subprime credit risk management during the period 2000-2005. See my 2008 post "Tranche Warfare."
Great discussion, this podcast.
Long-time fan of Jen's book.
PLUNDERERS UPDATE
I have some lengthy personal experience with this rapacious "private equity" leveraged buyout "vulture capitalism" stuff. First, healthcare "out-of-network ERs?" been there, done that. See my 2015 post:
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See also my posts on "An American Sickness."
Another history: In January 1986, just prior to my 40th birthday I got my "first day gig" at a radiation laboratory in Oak Ridge after getting my undergrad at UTK in 1985 (yeah, I'm slow; old washed-up guitar player). "ASL" ("Applied Sciences Laboratory"). It was founded by PhD nuclear engineer John A. Auxier, the nation's premier "certified health physicist" (CHP, basically a radiation dose/exposire epidemiologist). John had just retired as the Director of Industrial Health and Safety at ORNL (Oak Ridge National Laboratory). He'd been a member of the Three Mile Island Commission. He was a pilot since his days in the military. He owned several fixed-wing aircraft and a helicopter, serviced by the Smoky Mountain Aero FBO at McGhee-Tyson Airport near Alcoa TN.
My wife was the customer service manager there while I was in school at UT. She managed his aviation account.
Recognizing supreme talent (she's the smartest woman I ever met), he pilfered her to become his Customer Service/Marketing Manager (and eventually QA Lead). Through her he learned of my studies in applied statistics.
"We need to computerize our operations and QC analysis, Cheryl. Would Bobby like to come out and work for us?"
I arrived right after New Year's Day 1986. QC data were computed on yellow pads in pencil by old school scientists brandishing slide rules. Sums of squares done long-hand for QC Sigma limits.
Interesting.
I stayed 5 1/2 yrs. We went from a single building on Bear Creek Rd with 9 employees to a complex of 3 buildings running 24/7, employing many dozens of radiochemists, CHPs, technicians, and biz peeps.
I began using an IBM-XT, the only PC on the property. I wrote all of their code (what we now call "apps"), and installed and managed their Novell Network. I'd never touched a PC before. I was blissfully unaware that you couldn't do these things.
Eventually, ASL got bought by a growing company called "International Technology Corporation" (IT Corp), based in Pittsburgh. We became "IT/ORL."
IT Corp grew and grew and grew. in 1992 they won the DOE environmental remediation contract to assess and clean up the Nevada Test Site nuke mess. Cheryl was the QA Manager. I'd moved on to Digital Industrial Diagnostics (FFT analytics).
I quit. We moved to Las Vegas. We then lived there for 21 years.
IT Corp was now public (ITX), had grown massively via acquisitions, and had ironically now come into the takeover crosshairs of The Carlyle Group. The new CEO was essentially a plant.
Carlyle de-boned and BK'd them in short order. I'll spare you the myriad plunderers' particulars. The CEO made Bank.
Cheryl landed on her feet (most ITX people were not so lucky). ITX was sold to The Shaw Group of Baton Rouge (SGR). Shaw named her Director of Quality of the new "Environmental Division"—her entire former company. Those to whom she'd once reported now reported to her. (Like I said; crazy, scary smart.)
That was a wild period. She spent the entire fall post-Katrina working on the remediation. SGR was the contractor that pumped NOLA out, and ran the "blue tarp" and emergency mobile homes initiatives.
Eventually SGR had an internal political C-Suite dustup, the upshot of which was a demand for Cheryl to relocate from Vegas to Baton Rouge (surely for The Contrarian Bitch to be reined in).
She quit. Finished her career as worldwide Corporate Director of Quality for the esteemed Rhode Island-based Gilbane Building Companies, working out of Concord, CA.
Carlyle's Rubenstein—[bleep] you and your philanthropy and rep-washing PBS hustle. Y'all ruined a technologically adept and committed company. But, I'm sure you did well.
DEC 20TH UPDATE
Deep into "The Plunderers." Excellent. Most of it is just pretty confirmatory for me, as I've long been familiar with the lengthy list of white collar perps. Very well written, this book.
I've also gone back and re-read through much of Jen Taub's book. I bought it in hardcover when it first came out. Loved it. I just bought the Kindle edition as well. My eyes are getting so bad. "...The Golden Years are here at last. The Golden Years can kiss my ass."
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