Posted on 10/11/2004 8:40:58 PM PDT by crushelits
“What do rap music impresario Sean "Puff Daddy" Combs and former Vice-President Al Gore have in common?" BusinessWeek asks in its latest edition.
The answer: Both are being funded by California’s state pension system – better known as CalPERS (the California Public Employees’ Retirement System).
The business weekly reports that the California pension system is forking over as much as $760 million to Ronald W. Burkle, a billionaire liberal Democrat, to invest in causes and companies that “will benefit minorities, women and blue collar workers.”
One of those “minorities” benefiting from the novel investment strategy is none other than rapper Puffy Combs.
Last year, Burkle reportedly invested $100 million in Sean John, the urban-sportswear company founded by Combs.
Burkle has other ties to Combs. Burkle, as one of the biggest billionaire backers of the Democratic Party, has been working hard to elect John Kerry.
This year Combs suddenly took an interest in politics and formed a new group called Citizen Change with the intent of encouraging younger voters of the MTV generation to vote. The group’s slogan, coined by Combs, is “Vote or Die.”
Combs has said the purpose of his group is non-partisan – but Republican pundits say that such voter efforts are thinly veiled efforts to register and encourage Democratic voters.
Evidence of Combs’ political leanings is Burkle’s involvement in backing Combs’ Citizen Change.
"We were thinking we should do something on the political side with Puffy," a Burkle insider told Fox News’ Roger Friedman, explaining the hip-hop star’s abrupt interest in politics.
Last May, Burkle chose to back another capital-starved celebrity, Al Gore – funding the former vice president’s planned $75 million cable TV station, INdTV, which aims to provide news and entertainment for 18- to 34-year-olds.
Gore’s wannabe network was viewed as the former vice president’s attempt to create a new cable network to challenge Fox News, which he believes is too influential and conservative.
Apparently other social concerns are being met with California pension money. In August, Burkle paid $300 million – some of it CalPERS money – to buy TDS Logistics Inc., a Canadian auto parts concern that had been hit by a strike.
Burkle maintains that the Combs and Gore arrangements not only reflect his social mission but also are good commercial investments.
Furthermore, he says, both companies employ minorities and women and are creating jobs in urban areas.
With TDS Logistics, Burkle not only fronted the cash but also brought in a labor-relations specialist to help settle the strike. "We've gotten great returns by treating people well," Burkle says.
BusinessWeek says that Burkle's deals illustrate how the line between business, social connections and politics can be blurred as pension funds come under increasing pressure from labor unions, politicians and activists to pursue goals other than simply making money.
But some suggest that such arrangements are too cozy for comfort.
"We should be concerned as taxpayers," says Stephen M. Bainbridge, a professor of law at the University of California at Los Angeles. "I don't want them making investment decisions so they can get invited to Puff Daddy's next party or advance their political agendas."
In defense, Gore claims that his new network will not espouse any particular political beliefs.
But the Gore deal was brought to Burkle by San Francisco venture capitalist Richard Blum, whose wife is Democratic Sen. Dianne Feinstein.
For his own part, Burkle told BusinessWeek he will no longer contribute to the campaigns of the California governor, state treasurer or controller while he pursues new business with CalPERS.
Since 1999, Burkle has contributed more than $600,000 to campaigns for state office. Furthermore, he has given millions of dollars to political causes, most of them connected with the Democratic Party.
Despite Burkle ostensibly turning over a new leaf, former President Bill Clinton remains on his team, serving as a senior adviser to Burkle's investment firm, Yucaipa Cos., in return for a cut of the profits.
Meanwhile, CalPERS has been singing Burkle’s praises, noting how the investment guru had earned an average annual return of 45 percent over the preceding 13 years.
But just how much CalPERS makes from its peculiar stable of Burkle investments won't be known until the investments are sold in a few years.
Pensioners keep their fingers crossed as Burkle repeats his mantra that his focus is entirely on making money for California's pension system and bettering life for those less fortunate than he.
What a shame. Government retirement systems as well as unions should stay out of politics. Not all of their represented employees feel the same way they do. It is wrong to assume so and use $$$'s to fund political campaigns.
The head of Calpers is a very partisan Democrat who is positioning himself to run for Governor. He will be ruined for doing this stuff. Throwing significant sums to friends/supporters is a violation of fiduciary responsibility. Look to see the guy sued/ruined sometime in the future.
"One of those “minorities” benefiting from the novel investment strategy is none other than rapper Puffy Combs."
Will the new line of clothing exhibit the bullet hole aeration technology?
Let me see.... The dim's think it is risky for me to have 2% of my Social Security money to invest in controlled accounts in the equity markets but Burkle can use $760M of taxpayers money to pay off liberal causes. And Comb's gets $100M and in exchange for that he uses his 'celebrity' to get the vote out for the dims. Funny how that works.
When the pension fund goes broke, there will be another Jimmy Hoffa "missing" as well as alot of people without pension funds.
I thought there was a law against this, trust a democrat and corrupt union to find a way around it.
One day Union members are going to wake up and realize that the union dues they pay is still their money, and demand it be spent on things like medical insurance, dental plans, and pensions, rather than political ventures, of which not every union member agree's with.
When these union members realize that this money amounts to billions of dollars a year, and what this same money can do to better their lives directly, will they demand it back? Or continue to pay ever increasing dues, and let the Sweeny Weinies continue spending it freely on their every desire, political campaigns, donations to causes not supported by the dues payer, when this money could be used better ways, like a collage CSP for Union members children?
Poor union DUmmies, duped by the smooth talking union rep.
This is probably worse than using taxpayers money. It sounded to me like it was their pension plan. He looses that the people don't have anything to live on when they are not capable of going out and making a living. This is sad, and should be against the law.
No, we shouldn't be "concerned", we should be outraged.
"In defense, Gore claims that his new network will not espouse any particular political beliefs. "
And Dan Rather is an impartial journalist.
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