By Illinois Radio Network
SPRINGFIELD – With U.S. Sen. Elizabeth Warren, a presidential candidate, attacking private equity firms proposing legislation that would target their operations, the investment industry is going on the offensive with a campaign in Illinois and other states reminding Congress about the taxes it pays and the businesses it helps.
Calling the industry “legalized looting” and writing in a Medium post that “private equity firms are like vampires – bleeding the company dry and walking away enriched even as the company succumbs,” Warren and other senators in July introduced the “Stop Wall Street Looting Act.”
It’s a multi-pronged regulatory bill that would reinstate the Glass-Steagall separation between commercial and investment banking, increase the risk for investors regarding business failures, limit the equity firm’s abilities to extract fees from an acquired company, and make the firm responsible for the acquired company’s debts.
Led by the American Investment Council, the industry has launched a campaign to highlight the value it brings in a message tailored to reach the ears of Congress.
“We’re a driving force for economic growth and opportunity for American workers,” a 30-second video said. “From manufacturing and agriculture to tech and transportation, private equity employs nearly nine million workers in all fifty states and every congressional district.”
The group contracted EY to extrapolate the economic ripple the industry has on the American economy. It noted private equity has contributed “roughly 1,200 Illinois-based businesses from 2013 to 2018, direct employment of 358,000 workers in Illinois with an average salary & benefits of $73,000 a year.”
It also highlights a number of well-known brands equity investors have helped, including pizza chain Giordano’s.
“Our message is about jobs, investments, and returns for retirees and workers,” AIC’s President and CEO Drew Maloney said. “Sen. Warren has approved legislation now that would impact the private equity business and one of the reasons we’re continuing this business education campaign is to make people aware that if you enacted the legislation that she’s proposing would essentially eliminate the private equity business.”
Illinois Radio Network can be reached at News@WJBC.com.