Public Money for Private Equity: Pandemic Relief Went to Companies Backed by Private Equity Titans
Hundreds of companies owned or backed by some of the most well-financed private equity firms in the US secured an estimated $5.3 billion in public funds under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
After extensive lobbying by the private equity industry in 2020, federal pandemic relief legislation imposed few conditions on recipients and failed to prohibit them from using public money to enrich investors. With improved balance sheets shored up by government money, private equity firms were able to finance a buyout spree during the economic downturn as well as to extract dividends and fees from their portfolio companies. The private equity industry captured over a billion dollars in funds that should have supported small, independent businesses, especially those owned by women and people of color.
Public Money for Private Equity continues Anti-Corruption Data Collective’s efforts to shine a light both on opacity and accountability issues in the Private Investment Funds industry, and on abuse of and lacking oversight affecting U.S. federal pandemic relief legislation.
David Szakonyi, co-founder of ACDC, said: “The near total opacity of the private equity industry means we rely on media reports and civil society monitoring to assess how much public money private equity-backed companies received from the CARES Act. This same opacity makes the industry a major risk for money laundering and an area of pressing concern for anti-corruption campaigners and, reportedly, for law enforcement.”