SEIU President Andy Stern Statement on Private Equity's New Code on 'Responsible' Corporate Practices

Washington, D.C.--Today, in coordination with the UN Principles for Responsible Investment (PRI), the Private Equity Council released a new code of responsible corporate practices. In response, Andy Stern, President of the Service Employees International Union (SEIU) and Chair of the SEIU Master Trust, issued the following statement:

We are not fooled by private equity's new image makeover; a wolf in sheep's clothes is still a wolf. These principles are just a fig leaf; a failed attempt to mask greediness as usual.

"For far too long Private Equity tycoons have flown underneath the radar, enriching themselves at the expense of workers, industries and the global economy. Today--as we face a global economic meltdown--there is growing recognition that private equity's leverage-based financial model--uninhibited by regulation, enforcement, or basic scruples--is one of the roots of the economic crisis.

"If there is one lesson from today's financial crisis, it's that self-regulation lulls you into a false sense of complacency. Without binding, third-party enforcement, private equity firms like KKR and Carlyle will continue to employ the same damaging financial practices that have gotten us where we are today.

"The SEIU Master Trust was an early signatory of PRI, and we support shareholder engagement that results in real change. But we don't want PRI to be used as a smoke screen for private equity firms that have an extensive track record of gaming the system--continuing their risky, damaging behavior under the veil of 'corporate responsibility.'

"We demand more from private equity than a change in image; we want to see a fundamental change in behavior.

If private equity firms are serious about behaving responsibly, they need to commit to a code of practices for themselves and their portfolio companies with verifiable, independent third-party monitoring and viable mechanisms for enforcement for non-compliance. It's past time for private equity to face real accountability, oversight, and enforcement with teeth."

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