Booker Was Right: Unions Bet Big on Private Equity
Policy + Politics

Booker Was Right: Unions Bet Big on Private Equity


Democratic Newark Mayor Cory Booker has historically been a vocal Obama administration supporter. But he riled his own party and pleased Republicans Sunday when he condemned a new Obama campaign video portraying likely GOP presidential nominee Mitt Romney as a job destroyer.  The video released today -- the second in what appears to be a series focusing on companies bought by Bain Capital during Romney's time at the firm, highlights the plant closings and bankruptcy of a Marion, Ind. company where 1,500 people lost their jobs.
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“I'm not about to sit here and indict private equity,” Booker said on "Meet the Press" Sunday.  “I live in a state where pension funds, unions and other people are investing in companies like Bain Capital. If you look at the totality of Bain Capital's record, they've done a lot to support businesses, to grow businesses, and this, to me, I'm very uncomfortable with.”  He called the attack on private equity "nauseating," and said American politics had reached "a ridiculous point."

In an apparent effort to contain the damage, Booker posted a web video late Sunday and tweeted Sunday that he still felt Obama should be reelected and that he “encourages it” for the Obama campaign to scrutinize Romney’s past.  In a tweet, he said the intent of his statements were to emphasize that “we as a nation owe it to him [Obama] and ourselves to reject politics as usual.”
Recent data show that when it comes to unions and private equity, Booker has a point.  As of fall 2011, about $220 billion in public employee pension funds were invested in private equity firms—about 11 percent of their assets, up $50 billion over 2010, according to Wilshire Trust Universe Comparison Service.  Also, as of fall 2011, private sector unions including the Service Employees International Union (SEIU) and the Western Conference of Teamsters Pension Trusts had a collective $12.9 billion in defined benefit funds invested in private equity, according to data from Pensions & Investments.

The first video, released last Monday, chronicles the history of GST Steel—a company Bain bought in 1993 and later shuttered its Kansas City plant, leaving hundreds of workers without jobs.  A similar documentary-style video is being released Monday focusing on Ampad—a paper company Bain acquired before shutting down an Indiana plant, which meant the loss of 250 jobs.