GOP candidate's private equity resume draws scrutiny in Va.

Glenn Youngkin amassed a personal fortune estimated at more than $300 million as a senior executive at the giant private equity firm known as the Carlyle Group

Via AP news wire
Thursday 01 July 2021 10:40 BST
Virginia Governor Youngkin
Virginia Governor Youngkin (Copyright 2021 The Associated Press. All rights reserved)

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Louise Thomas

Louise Thomas


Newly retired, Judy Pavlick was among hundreds of seniors who enjoyed the low cost-of-living and friendly atmosphere at Plaza Del Rey, a sprawling mobile home park in Sunnyvale, California Then the Carlyle Group acquired the property and things began to change.

Pavlick’s rent surged by more than 7%. Additional increases followed. She said the unexpected jump forced her and her neighbors, many on fixed incomes and unable to relocate, to sometimes choose between food and medicine.

The 2015 acquisition and subsequent sale of Pavlick’s mobile home park is a core business practice for private equity firms such as Carlyle, which buy and restructure private companies to build value for their investors, sometimes cutting jobs and services in the process.

But the deal, one of hundreds Carlyle executed in recent years, could become a political liability for the company’s former co-CEO, Glenn Younkin, who is now running as the Republican candidate for governor in Virginia and highlighting his experience “building businesses and creating jobs.”

“They don’t realize that these are peoples’ homes. We’re not just numbers on a spreadsheet,” said Pavlick, now 74 years old. “They have no conscience.”

There are no allegations of illegality or wrongdoing, but Youngkin’s political aspirations have drawn new scrutiny to his dealings at the Washington-based investment firm, where he generated a net worth estimated at over $300 million before retiring as co-CEO last summer.

Youngkin now faces another wealthy former businessman, former Democratic Gov. Terry McAuliffe in November’s general election, which has emerged as the nation’s top political contest of 2021.

While McAuliffe’s ties to big donors and lobbyists are well-established, Youngkin has only begun to confront difficult questions about his business background. His team declined to address any of Carlyle’s specific deals.

“As a young man, Glenn joined a small company and over the next 25 years worked his way up to the top of the company, helping to grow it into a hugely successful enterprise that turned good businesses into great businesses, created tens of thousands of jobs, and funded the retirement pensions of police officers, firefighters, and teachers,” said Youngkin spokesman Macaulay Porter. “Under Glenn’s leadership, The Carlyle Group employed nearly 2,000 people and managed assets totaling nearly four times the size of Virginia’s yearly budget.”

Youngkin has made his business experience and status as a political outsider central to his pitch to voters. But more often than not, he discusses his career in broad strokes, without mentioning his lofty position or even the name of his former firm.

Asked in a February interview with a former state lawmaker that was streamed on social media how he viewed the role of private equity in the economy, Youngkin responded: “We invest in companies, and we try to take good companies and make them great companies. And we do that by helping them expand.”

While creating big profits for the firm’s investors, Carlyle’s deals sometimes triggered layoffs, outsourced jobs and complaints from the people served by the companies acquired.

The details in some cases may be politically damaging for Youngkin, but the situation is also complicated for his Democratic critics, who have tried to portray Youngkin as too close to former President Donald Trump McAuliffe himself invested in Carlyle before and after becoming Virginia’s governor in 2014.

The former Democratic governor’s public disclosures show no current ties, but records reveal that McAuliffe invested at least $690,000 in Carlyle funds between December 2007 and the end of 2016. The actual figure is likely much higher because the disclosures require candidates to acknowledge only a broad range of investment with no upper limit in some cases.

McAuliffe spokesperson Christina Freundlich said McAuliffe has made no investments in Carlyle since 2014, describing him as a passive investor with no role in crafting the deals. She noted that many major institutions were among the investors, including the California Public Employees’ Retirement System.

“Glenn Youngkin’s record is clear: shipping American jobs overseas and harming seniors and homeowners, all for his own profit,” Freundlich said. “Virginians deserve better than an extreme, Trump-endorsed job killer with a track record of always putting his own wealth first.”

Carlyle made investments in several companies under Youngkin’s leadership that moved at least 1,300 American jobs offshore, according to Department of Labor data.

They include Metaldyne LLC, a North Carolina car parts company that sent 176 jobs to Korea in 2008; the Texas company Commemorative Brands that produced class rings and sent more than 260 jobs to Mexico between 2005 and 2013, and Ohio-based car part manufacturer Veyance Technologies that sent nearly 300 jobs to Mexico between 2009 and 2011.

After they were restructured, all three were sold for hundreds of millions of dollars more than they were acquired for.

Veyance Technologies was among those companies in a larger fund in which McAuliffe had invested, which means he would have profited from the deal.

A representative for Carlyle declined to comment. The company’s leadership has struggled to defend some of their decisions at times.

The firm in 2005 acquired a minority stake in Combined Systems Inc., a “less-lethal” munitions manufacturer that produced tear gas and “super-sock bean bags” subsequently used by governments in Tunisia, Egypt and China to crack down on pro-democracy protesters.

Combined Systems’ officials said at the time that they could not control how their products were used, but the U.S. State Department condemned the excessive use of force against protesters in Egypt in particular and launched an investigation into the misuse of tear gas after pictures of CSI-branded tear gas canisters were published on social media.

Youngkin joined the firm in 1995 and rose through the ranks steadily in the subsequent years, becoming head of the industrial sector investment team by 2005. By March 2011, he had become the chief operating officer and within seven years, he was named co-CEO.

Carlyle announced Youngkin’s retirement last summer amid speculation that he was interested in running for office. In the announcement, Youngkin said it was the “professional journey of a lifetime and my honor to be part of building Carlyle into the global institution it is today.”


Peoples reported from New York.

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