On April 20, 2012, President Obama’s campaign website KeepingGOPHonest.com released an ‘enemies list’ in an attempt to vilify GOP donors “who benefit from betting against America.” The first name in the list was Paul “Chip” Schorr, a partner at Blackstone Group, a private-equity firm based in New York.
The website states:
“As a partner at Blackstone, Schorr closed a deal in 2007 to outsource the services of seven U.S. companies to a firm in India, boosting that firm’s profits by $220 million and making millionaires of the Indian management team. In 2006 he arranged a buyout of a Colorado travel reservations company that led to 841 layoffs while Blackstone and its partners recouped the billions of dollars they invested in less than a year.”
Now, this is a fairly limiting view of what happened. Highlighting TWO examples of lost jobs as a result of actions by a firm that has a vested interest in the success of the vast majority of the businesses is completely and totally unfair. Either way, it is clear that the Obama campaign had a very negative view of Blackstone Group as of the end of April.
So why did President Obama attend a fundraiser this week in his honor at the home of the president of Blackstone Group?
The Wall Street Journal reported that Obama spoke Monday at a fundraiser at the home of Tony James, the president of the private-equity firm, with the cost of attendance at $38,500 a head. This is the EXACT same company he tried to portray as thieves just weeks ago. BusinessInsider.com stated that “Obama raised over two million dollars” at the event.
On the very same day, his campaign released a video attacking Bain Capital, the private-equity firm started by Mitt Romney, for the failure of GST Steel, a Kansas City, Missouri based steel company.
Mitt Romney’s response:
Is this not the exact same business that Blackstone Group is involved in?
What Obama has done here is said it is a crime for private citizens to give money to Romney because of the business they have involved themselves with, but it is perfectly okay if they give him money.
In reference to the issue at hand, Don Peebles, a Miami real estate executive who has raised over $100,000 for Obama’s campaign, told Buzzfeed, “I think it’s difficult to attack or demonize an industry and then take money from it.” Peebles added, “Any type of attack and vilification of a particular industry is not okay to begin with.”
The actions of private-equity firms will be a hotly debated topic this campaign season because of Romney’s involvement and claims that he has created jobs. Many would argue that private-equity firms have created many jobs. But, businesses do fail, and sometimes that leads to the loss of employment. GST Steel of the Obama ad had problems long before Bain Capital intervened, so laying all of the blame on Bain is unfair….READ MORE