Yesterday, AFL-CIO head Richard Trumka may have broken a modern record for chutzpah exhibited by a labor leader Friday in criticizing management's decision at bankrupt snack maker Hostess Brands to liquidate in the wake of irreconcilable issues with its unions. In a Friday afternoon report at Politico, Kevin Cirilli not only let Trumka get away with it; he also lent the labor leader's contentions additional misleading support.
Trumka blamed the company's apparently imminent demise on "Bain-style Wall Street vultures." He wants everyone to believe that it's greedy, eeeevil Republican private-equity types who are on the brink of putting yet another company out of business. The "clever" framing of that quoted phrase appears to indicate that Trumka already knew better. It seems very likely that Cirilli also knew better. Three hours before the initial time stamp of Cirilli's report, Zero Hedge re-exposed the heavy involvement of D-D-D-Democrats in Hostess's management and advisors originally documented way back in july at CNNMoney by David Kaplan (additional paragraph breaks added by me; bolds are mine throughout this post):
The Hostess Liquidation: A Curious Cast Of Characters As The Twinkie Tumbles
... America has been habituated following the last season of the reality TV show known as the presidential election, if Private Equity then "bad." Only this time there is a twist: because it wasn't really PE that was the pure evil in the Obama long-term campaign, it was associating PE with Republicans, and thus: with jobs outsourcing.
And here comes the Hostess twist: because Tim Collins of Ripplewood, was a prominent Democrat, a position which allowed him to get involved in the first bankruptcy process in the first place, due to his proximity with the Teamsters' long-term heartthrob Dick Gephardt (whose consulting group just happens to also be an equity owner of Hostess).
In other words, the traditional republican-cum-PE scapegoating strategy here will be a tough one to pull off since the narrative collapses when considering that it was a Democrat who rescued the firm, only to see it implode in a trainwreck that has resulted in the liquidation of a legendary brand, and 18,500 layoffs.
But it only gets better. Because the full cast of characters involved here is quite stunning, as David Kaplan summarized so well recently:
Ripplewood is run by Tim Collins, 55, who's been at the center of other famed PE transactions. Known as a brilliant capitalist-philanthropist-networker, he's an eclectic character: a Democrat in an industry of Republicans ...
... Ripplewood's foray into Hostess was partly enabled by Collins's connections in the Democratic Party. He wanted to explore deals with union-involved companies and sought the help of former congressman (Dick) Gephardt, who in 2005 founded the Gephardt Group, an Atlanta consulting firm that provides "labor advisory services." In his 2004 presidential bid, Gephardt -- whose father was a Teamsters milk truck driver -- was endorsed by 21 of the largest U.S. labor unions; in 2003, Collins was one of 19 "founding members" of Gephardt's New York State leadership committee.
The rest of the story at CNNMoney is one of owners trying to do what they can to save a business, sometimes less than perfectly. Management got union concessions to emerge from bankruptcy the first time, but for a variety of reasons, it wasn't enough, and another round of negotiations was attempted last year. When it became clear that the impasse had no chance of being resolved except under duress, the company filed for bankruptcy again. Now it's not coming back.
Read it all -- at Zero Hedge (especially the chart of the players) and CNNMoney.
"Champion of labor" Gephardt has now positioned himself as an expert who will help his clients:
- Increase the level of trust between management, employees and union leaders
- Develop labor agreements that align the interests of the company and its employees
- Implement strategies for securing win-win agreements and establishing foundations for long term relationships. We also provide labor relations mediation services.
- Identify and evaluate acquisition candidates, perform due diligence, assist with labor cost restructuring and workforce integration.
His group supposedly "will develop an employee relations strategy that helps you achieve your business objectives." Well, not always, it would appear.
Here's the lesson Zero Hedge believes we should take away from all of this:
... what the Hostess story will hopefully teach the always gullible public, is that nothing is ever black or white, and there are numerous shades of gray in every story: even one in which an "evil" PE firm is unable to come to resolution with labor unions, despite the man in charge of it all being a prominent democrat.Because when it comes to money other things such alliances, ideology and certainly politics are always, always, secondary. Sadly, ever more Americans will be forced to learn this lesson the hard way.
Politico's Cirilli and the rest of the establishment press appear determined to make sure that the average American doesn't learn that lesson. Cirilli should be presumptively considered especially culpable because he appeared to betray knowledge of the July CNNMoney story. But instead of exposing Trumka's blatant dishonesty, he buttressed it with references to the presidential election and Rush Limbaugh:
The Bain attack is back.
This time it’s being used against Hostess Brands, the Twinkies and Wonder Bread maker that announced Friday it was closing. AFL-CIO President Richard Trumka drew the comparison in a public statement Friday.
“What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor,” Trumka said in a public statement. “Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price.”
... Trumka’s comparing Hostess to Bain comes after an election in which former GOP presidential nominee Mitt Romney was criticized for co-founding Bain Capital.
The union leader took the workers’ the side, saying Hostess’ leaders and policies were “wrecking America.”
... Hostess filed again for bankruptcy in January, and its debt was later purchased by investment firms, including two hedge funds: Silver Point Capital and Monarch Alternative Capital, according to a CNN Money report.
... Conservative commentator Rush Limbaugh fired back at Trumka on his radio program Friday.
"According to a CNN Money report"? It's hard to imagine it's any other writeup besides the one by Kaplan Zero Hedge referenced above which names Democratic Party names. Odds are Kevin Cirilli knew all about the involvement of prominent Democrats, but proactively chose to carry Trumka's water. If true, how disgraceful.
Readers are going to come away from Cirilli's report believing that Republicans are to blame for Hostess's demise. Obviously, that's complete rubbish. If prominent Republicans with backgrounds equivalent to Gephardt's had been involved, odds are that Kevin Cirilli would have been naming names in his headline and opening paragraphs.
The rest of the press is predictably ignoring the Hostess's Democrat ties. Searches at the Associated Press on "Gephardt" and on "Hostess Democrat," "Hostess Democrats, and "Hostess Democratic (not in quotes) at 7 AM ET all came up empty. The most recent reference to Gephardt in a search on his name at the New York Times is from July 19.
Cross-posted at BizzyBlog.com.
