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Posts Tagged ‘Ripplewood Holdings’

Top Democrat Donor Shut Down Hostess Twinkies

In Obama Administration, Political Rhetoric, Uncategorized on November 22, 2012 at 12:53 am

Box of Twinkies

Richard Trumka of the AFL-CIO had it all wrong in his bizarre attack on the private equity firm that backed Hostess Foods, maker of Twinkies and Ding-Dongs.  He said, “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.” [1]

Not only does Bain Capital have nothing to do with Hostess, union overindulgence hurt the competitiveness of the maker of Wonder Bread, which was already strained by market changes.  Even more rich than white Twinkie filling is the fact the actual private equity owner is Ripplewood Holdings.  According to tracker OpenSecrets.org, Ripplewood gave $141,000 to the Democratic National Committee in the 2010 cycle, making it the 10th biggest DNC donor and the largest amongst private equity firms. [2]  Ripplewood was founded by Timothy C. Collins, a major donor to Democrats. [1]

Collins’ family gave a half million dollars to the Obama Super PAC Priorities USA. [3]  That means he personally is responsible for almost all the anti-Bain ads of the 2012 election, because they were almost all run by Priorities USA.  [6] This includes ads rated as wholly false by the Washington Post Factchecker such as the one that claimed a death was caused by Bain. [7] 

Collins gave another “$90,800 to Democratic campaigns and committees during the 2012 election cycle.” [3]  Collins also is on the board of the Hamilton Project, a liberal interest group, where he sat with big Obama Administration names like Timothy Geithner, Peter Orszag, Jason Furman, and Democratic power Robert Rubin. [3]  He leveraged former Democratic House leader Richard Gephardt to aquire Hostess. [1]  Collins met personally with President Obama six times at the White House and another four with Obama advisor Valerie Jarrett. [3]  A search of the Huffington Post’s political donation database shows 85 instances of Collins making donations and they were almost exclusively to Democrats. [4]

Hostess logo with heart.jpg

Did Ripplewood cause the demise of Hostess?  As discussed in many business periodicals, Hostess struggled with evolving American tastes, high costs and antiquated union work rules.  As written by Holman Jenkins in today’s Wall Street Journal

Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer’s shelf. Wonder Bread and Twinkies couldn’t ride on the same truck. [5]

Hostess spent eight of the past 11 years in bankruptcy.  Trunka’s quote is nearly Marxist in its off-base attack on a private equity firm that tried, but failed, to save Hostess.  Ripplewood isn’t “making itself rich.”  Despite taking some amounts out, Ripplewood will lose almost its entire $140 million investment in Hostess.  What put the Hostess workers into the unemployment lines?  Look in the mirror, Mr. Trumka.

Collins and his Ripplewood firm have every right to donate to the same Democratic Party that spent the past year demonizing what they do for a living.   We see they are quite capable of ding-dong decisions.  The First Amendment lets Trumka spout nonsense.  But, he is wrong to attack the Bain firm which was less involved in Hostess than good nutrition was.  Blaming Hostess on Bain while absolving the unions is a case as flimsy as a tower of Ding-Dongs piled as high as a stack of the 140 million dollars Ripplewood lost on its investment.  And to Mr. Collins, now that you are getting blowback from your anti-capitalist “friends” like Richard Trumka, just remember one of Hostess’s own products: when you deal with Devil Dogs…

[1] http://dealbook.nytimes.com/2012/11/19/private-equity-and-hostess-stumbling-together/

[2] http://www.opensecrets.org/parties/contrib.php?cmte=DNC&cycle=2010

[3] http://freebeacon.com/all-in-the-family/

[4] http://fundrace.huffingtonpost.com/neighbors.php?type=name&lname=Collins&fname=Timothy

[5] http://online.wsj.com/article/SB10001424127887324352004578130912150512612.html

[6] http://abcnews.go.com/blogs/politics/2012/07/friends-with-benefits-pro-obama-superpac-running-almost-100-of-all-anti-bain-ads/

[7] http://www.politifact.com/truth-o-meter/statements/2012/aug/09/priorities-usa-action/pro-obama-group-blames-romney-womans-death/

Pictures from Wikipedia Commons.

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