While it’s pretty much common knowledge that Ohio’s junior Senator, Rob Portman, has millions of dollars coming into his reelection campaign from billionaires who don’t live in the state, a recent report has emerged that breaks down some of the murky (and unflattering) details about how this is being done and who it benefits.
The report, conducted by an advocacy group called Hedge Clippers — a coalition of policy, labor and grassroots organizing groups — details how “vulture capitalists” from Wall Street have destroyed companies and killed jobs in Ohio, and want to do more of the same, all while bankrolling Senator Portman’s reelection campaign. The report is very damning and its numbers don’t lie, and puts forth the question that several people (including Portman’s opponent, former Governor Ted Strickland) want an answer to: who exactly is Portman representing in the U.S. Senate? Ohioans or billionaires from other states?
According to the good folks at Innovation Ohio, the term “vulture capitalist” derives from the fact that these wealthy billionaires and hedge fund managers tend to “prey on firms that are near death” and create “profits by slashing costs.” Of course, in most of these cases, those “costs” refer to workers’ salaries, pensions and union rights, so you know, just the normal stuff that thousands of people’s livelihoods depend on. However, anything related to people’s livelihoods doesn’t matter to “vulture capitalists” when they see a company that’s on its way out. They circle high above the companies until the right moment, then swoop down to consume the remaining meat, only to fly away and let the carcass’ bones rot in the sun.
So let’s break it down: as detailed by Hedge Clippers, the largest carcass consumed by these “vulture capitalists” in Ohio so far is an auto parts manufacturer called Delphi Automotive. During the economic crisis of 2008 and following recession of 2009, Wall Street hedge funds led by billionaires Paul Singer, Dan Loeb and Nelson Peltz bought Delphi’s outstanding debt for super cheap, then were able to turn their investment into a controlling share of the company’s stock. According to the report, with the hedge fund managers’ newfound controlling faction in the company, they then fought for “more public subsidies for the company and reductions of its obligations to workers like collective bargaining agreements, union wages, health care, and defined benefit pensions.”
The results of those sound, fiscal (LOL) decisions? Thousands of manufacturing jobs were moved from all over the United States to other countries, including 900 from Ohio, and Delphi’s retirees’ pensions were cut by 30 to 70 percent. According to Innovation Ohio’s further analysis, the hedge funds were also able to make a YUGE profit from the auto bailouts that year, nabbing $12.9 billion in taxpayer money, “including $5.6 billion to cover pension obligations to the company’s unionized workforce,” while their salaried counterparts saw their pensions cut dramatically. After the company went public in 2011, one of the hedge funds “made $390 million, another $1.3 billion. The biggest payday went to Paulson & Company, whose shares grew by $2.6 billion.” Naturally, “the company has since reincorporated abroad to avoid US taxes.” Consider the carcass clean.
But now the vultures are circling once more, as Loeb and Peltz are currently orchestrating the merger of Dow and DuPont, which could potentially close a “combined 13 Dow and DuPont Ohio facilities and the more [than] 2,000 employees who work there.” And to make sure this diabolical scheme goes according to plan, the hedge fund managers and their cohorts have become some of the largest donors to Portman’s reelection campaign via the most popular campaign finance tool for Republicans these days, Super PACs. Singer alone has contributed almost a million dollars to the pro-Portman Super PAC Fighting for Ohio, and other hedge fund managers are at the top of donation list as well.
Perhaps this is why the “Securities and Investment” industry has collectively donated over $1.8 million to both Portman’s campaign committee as well as his leadership PAC combined. After all, they are experts at investing and they’re likely planning on getting their money’s worth — and let’s face it, Portman will probably give it to them despite what it could mean for Ohioans’ jobs.
It’s time for Ohio voters to swat away the vultures and tell them — and their crony Portman — to circle elsewhere.