Equity hucksters plundered the company to
feather their own nests.
Remember
the horrible murders in 1978 of San Francisco Mayor George Moscone and
Supervisor Harvey Milk? At the killer's trial, his lawyer argued for leniency,
saying that a steady diet of junk food had addled his client's brain. That
claim entered the annals of jurisprudence as the ”Twinkie Defense.”
Even
more preposterous is a recent claim by Ripplewood, a private equity firm that
bought out Hostess Brands three years ago. Just before Thanksgiving, the firm
asserted that it had been forced by greedy labor unions to kill off Hostess,
the maker of Twinkies.
The true greed in this drama comes
from inside Ripplewood's towering castle of high finance in Manhattan. Rather
than modernizing factories and upgrading the junk-food giant's products, as the
unions had urged, the equity hucksters plundered the company to feather their
own nests.
For example, they siphoned millions of dollars out of Hostess
directly into their corporate pockets by paying themselves ”consulting and
management fees,” which did nothing to strengthen the company.
But
it was this year that the rank managerial incompetence and raw ethical
depravity of the vultures of Ripplewood fully surfaced. While demanding a new
round of deep cuts in worker's pay, healthcare, and pensions — they quietly
jacked up their own take. And by a lot. The CEO's paycheck, for example,
rocketed from $750,000 a year to $2.5 million.
Like
a character in a bad Agatha Christie whodunit, Ripplewood — the one so
insistently pointing the finger of blame at others — turns out to be the one
who killed the Twinkie. Along with the livelihoods of 18,500 workers.
Jim Hightower is
a radio commentator, writer, and public speaker. He's also editor of the
populist newsletter, The Hightower Lowdown.
Distributed via OtherWords (OtherWords.org)
