The private equity group that owns a controlling stake in
the nation's biggest firearm company announced within days of the Newtown
massacre that it was selling that investment.
Wall
Street financial hucksters can be downright satanic in their pursuit of killer
profits, but here’s one that puts its hellishness right in its name: Cerberus Capital
Management. In Greek mythology, “Cerberus” is the name of a 3-headed dog that
guards the gates of Hell.
This
$20 billion dollar private equity outfit found itself in a heck of a fix after
the grotesque massacre of 20 school children in Newtown, Connecticut. Cerberus,
it turns out, owns a controlling stake in Freedom Group, America’s largest
firearms maker. That firm produces the .223 Bushmaster semi-automatic assault
rifle used by the murderer at Sandy Hook Elementary School.
The top dog of Cerberus is Stephen Feinberg, a devoted hunter who favors the Remington 700 sniper-style rifle, also made by Freedom Group. Indeed, the NRA has even hailed Feinberg & Co. for supporting gun rights and being “avid hunters and shooters.”
Perhaps
it’s this personal passion that has kept Feinberg’s big-money fund invested in
the gun maker, since Freedom Group keeps losing money — which isn’t the kind of
financial performance that equity investors usually tolerate.
Four
days after the horror of Sandy Hook Elementary, however, Cerberus punted,
announcing that it would sell Freedom Group. Three factors prompted the sale.
One: public exposure of its ownership. Two: a heightened possibility that
Congress will ban assault weapons, thus further lowering the gun maker’s
profits. Three: pressure from big clients, such as the California Teachers
Retirement System — which has $750 million invested in Cerberus, which includes
owning a stake in Freedom Group.
What?
You can expect equity profiteers to have zero ethical qualms about investing in
assault weapons. But teachers? It shouldn’t have taken an event like this to
bring that kind of investment to their attention.
OtherWords columnist Jim Hightower is a radio commentator, writer, and public speaker. He’s
also editor of the populist newsletter, The Hightower Lowdown. OtherWords.org
