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Thursday, Jul 1 2021

AP: GOP candidate’s private equity resume draws scrutiny in Va

Jul 01, 2021

“They have no conscience.”

A new report from the Associated Press details Virginia GOP gubernatorial nominee Glenn Youngkin’s record of profiting from offshoring American jobs, selling munitions to dictators, and forcing seniors to choose food, medicine and rent during his tenure as chief executive of the Carlyle Group — a role in which he amassed a net worth “estimated at over $300 million.” 

As one senior who fell victim to the Carlyle Group’s practice of exorbitant rent hikes on mobile home park residents put it, “They don’t realize that these are peoples’ homes. We’re not just numbers on a spreadsheet. They have no conscience.”

The Associated Press: GOP candidate’s private equity resume draws scrutiny in Va.

By Steve Peoples | July 1, 2021

Key Points:

  • Newly retired, Judy Pavlick was among hundreds of seniors who enjoyed the low cost-of-living and friendly atmosphere at Plaza Del Rey, a sprawling mobile home park in Sunnyvale, California. Then the Carlyle Group acquired the property and things began to change. Pavlick’s rent surged by more than 7%. Additional increases followed. She said the unexpected jump forced her and her neighbors, many on fixed incomes and unable to relocate, to sometimes choose between food and medicine.
  • But the deal, one of hundreds Carlyle executed in recent years, could become a political liability for Carlyle’s former co-CEO, Glenn Youngkin, who is now running as the Republican candidate for governor in Virginia and highlighting his experience “building businesses and creating jobs.” “They don’t realize that these are peoples’ homes. We’re not just numbers on a spreadsheet,” said Pavlick, now 74 years old. “They have no conscience.”
  • Beyond mobile home parks, Youngkin helped Carlyle make money for investors by targeting nursing homes, auto parts manufacturers, energy companies and even a business that produces “less-lethal” weapons used by governments that have cracked down on democracy advocates. More than 1,000 jobs were moved offshore in recent years as companies were restructured. Hundreds more were laid off after Carlyle instituted a series of cost-cutting measures at a nationwide nursing home chain; complaints of deteriorating service and neglect followed.
  • Perhaps not since former Republican presidential nominee Mitt Romney, now a Utah senator, has a candidate sought higher office with such strong ties to the world of private equity. Romney, too, sold himself as a successful businessman and job creator, but stories of megadeals that routinely put profits over people undercut his White House ambitions.
  • Carlyle made investments in several companies under Youngkin’s leadership that moved at least 1,300 American jobs offshore, according to Department of Labor data. They include Metaldyne LLC, a North Carolina car parts company that sent 176 jobs to Korea in 2008; the Texas company Commemorative Brands, which produced class rings and sent more than 260 jobs to Mexico between 2005 and 2013; and Ohio-based car part manufacturer Veyance Technologies, which sent nearly 300 jobs to Mexico between 2009 and 2011.
  • The firm in 2005 acquired a minority stake in Combined Systems Inc., a “less-lethal” munitions manufacturer that produced tear gas and “super-sock bean bags” subsequently used by governments in Tunisia, Egypt and China to crack down on pro-democracy protesters.
  • Youngkin’s annual compensation package in 2019, his last full year at the company, approached $17 million, according to published reports at the time. That same year, Carlyle sold Sunnyvale’s Plaza Del Rey for $237 million after buying it for $152 million four years earlier.
  • Six years after Carlyle entered Pavlick’s life, she is still fighting rent and fee increases, which continued to surge after Carlyle sold her community to another out-of-state investment firm two years ago. “This park used to be called the park with the heart,” Pavlick said. “They just turned everybody’s happy home upside down.”

Read the full story here.

Published: Jul 1, 2021

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