While the President was bashing Bain Capital earlier this year as an “evil rich” private equity venture capital firm that destroyed businesses causing people to lose their jobs, and perhaps their lives, the White House was in secret negotiations with Carlyle Group, an “evil rich” private equity venture capital firm.
In 2011 Sunoco announced that it would close two refineries in Philadelphia and Marcus Hook, Pennsylvania, citing $1 billion in losses in its refinery business over the past three years.
Closing the Philadelphia refinery, the largest on the East Coast, threatened to disrupt gasoline and heating-oil supplies in the Northeast. A February 27 report from the federal Energy Information Administration warned of the potential for prices to ‘spike’…[White House] aides concluded gas prices could rise 20 to 30 cents a gallon in parts of the Northeast.
This would never do, particularly in an election year. So, Gene Sperling, director of the President’s National Economic Council entered the picture and began working with both Sunoco and Carlyle to keep the refinery open. In the end, Carlyle paid nothing for a two-thirds stake in the refinery, but agreed to invest at least $200 million dollars in plant upgrades.
Notice that is $200 million of private “evil rich” investors’ money, not your tax dollars. If Carlyle can turn the refinery around, it will make money, and the 850 workers at the refinery will keep their jobs. If not, the investors, not you, the taxpayer, will lose that money, and the workers will lose their jobs later, rather than now. It’s a gamble, but only Carlyle was willing to take that gamble.
But, there was a hitch…the terms of a 2005 consent decree between the EPA and Sunoco concerning air pollution emitted by the refinery. If Carlyle did any work on the plant it would have triggered costly environmental reviews, and with this administration, no doubt costly environmental upgrades.
So, the White house was able to make that go away via transferring “emission credits” from the Marcus Hook refinery to the Philadelphia refinery giving the Philadelphia refinery a greater license to pollute.
I can only assume that venture capitalism and pollution are perfectly ok if it’s an election year.