With the U.S. general election just weeks away, a group of congressional Democrats, led by Rep. Mark Pocan, has reignited their campaign to overhaul the private equity sector. Pocan stated that the proposed legislation would “finally hold these predatory firms accountable and protect employees from exploitation by corporate greed.”
“The era of billionaires and major corporations playing fast and loose with the livelihoods of hardworking Americans and their communities must end,” said Pocan (D-Wis.), who is spearheading the Stop Wall Street Looting Act alongside Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) and Sen. Elizabeth Warren (D-Mass.).
Pocan highlighted the detrimental impacts of private equity in his own state: “In Wisconsin, we’ve witnessed the devastation when firms like Sun Capital strip companies of their assets, leaving employees and towns in disarray. When Sun Capital acquired Shopko—a cornerstone Wisconsin retailer for over five decades—they stripped it of resources, loaded it with debt, drove it into bankruptcy, and left around 14,000 workers jobless.”
“Private equity takeovers are sanctioned plunder, enriching a few Wall Street moguls at the expense of thousands of jobs, shuttering valuable companies, and in healthcare, they can literally mean life or death.”
Warren’s own state is reeling from similar private equity fallout. According to a recent report by The Boston Globe, the legislation aims to curb the expanding influence of private equity firms and limit the type of leveraged buyouts that have caused turmoil at Steward Health Care. The healthcare provider’s ongoing bankruptcy continues to impact communities across Massachusetts and seven other states.
This legislative effort was partly motivated by the crisis at Steward, previously the largest private for-profit hospital system in the country, noted the newspaper. It follows a Senate resolution unanimously passed to hold CEO Dr. Ralph de la Torre in criminal contempt of Congress for ignoring a subpoena. He resigned shortly after the historic vote—the first of its kind since 1971.
“Private equity takeovers are legalized looting that enrich a select group of Wall Street executives while costing thousands their jobs, closing down important businesses, and in healthcare, posing direct threats to life,” Warren stated. “This bill is crafted to eliminate loopholes and remove incentives for private equity pillaging, ensuring the disaster at Steward doesn’t recur.”
According to a fact sheet from the bill’s sponsors, the legislation would make private equity firms liable for debts, legal judgments, and pension obligations; restrict their ability to extract funds from companies; seal a loophole used to hide assets in bankruptcy cases; introduce protections for workers and customers; enhance transparency; establish boundaries for public fund access; and push real estate investment trusts out of the healthcare sector.
“From healthcare to housing, millions of Americans witness the takeover of companies by private equity, which promises service improvements but instead dismantles these entities, harming both employees and families,” Jayapal commented. “It’s crucial for Congress to act now to shield Americans from the perils of private equity and corporate greed, which is precisely what our Stop Wall Street Looting Act intends to do.”
Supporting the bill are Representatives Raúl Grijalva (D-Ariz.), Rick Larsen (D-Wash.), Barbara Lee (D-Calif.), Delia Ramirez (D-Ill.), Jan Schakowsky (D-Ill.), Alexandria Ocasio-Cortez (D-N.Y.), and Eleanor Holmes Norton (D-D.C.), along with Senators Tammy Baldwin (D-Wis.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Tina Smith (D-Minn.), and Ed Markey (D-Mass.).
The bill has garnered endorsements from numerous organizations including the American Federation of Teachers, Americans for Financial Reform, Economic Policy Institute, Indivisible, National Employment Law Project, National Nurses United, Public Citizen, Service Employees International Union, Student Borrower Protection Center, Take on Wall Street, United for Respect, and Working Families Party.
Porter McConnell from Take on Wall Street remarked, “Union-busting, pollution, and bankruptcy are not mere side effects of the private equity model—they are its core components. We are thrilled to see comprehensive legislation like the Stop Wall Street Looting Act introduced. We created the legal loopholes that enabled the growth of the private equity industry, and it’s within our power to close them.”
United for Respect co-executive directors Bianca Agustin and Terrysa Guerra emphasized that “private equity firms have demonstrated time and again that they are a destructive force on workers, our economy, and American retailers, capitalizing on companies for profit and causing widespread layoffs. It’s essential that we hold billionaire exploiters responsible for their actions, which is critical to tackling the escalating economic inequality.”
“The Stop Wall Street Looting Act will seal gaps in our legislation that have allowed private equity to exploit companies and accumulate vast profits at the expense of workers,” they continued. “United for Respect is honored to support this bill, and we urge all lawmakers to join us in defending workers and holding Wall Street accountable for the chaos they create.”
Although the bill faces an uphill battle in the currently divided Congress, its introduction is a clear indicator of the legislators’ stance as early voting begins, determining the future leadership of the Senate, the House of Representatives, and the White House—between Democratic Vice President Kamala Harris and former Republican President Donald Trump.
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