ICYMI: Glenn Youngkin Accused of Lining His Own Pockets at the Expense of First Responders

August 11, 2022

Key Point: “The Carlyle insiders who received the payouts escaped a tax bill that would have exceeded $1 billion, according to the complaint, which accuses Rubenstein, Youngkin and other Carlyle officials of lining their own pockets at the expense of people like police officers and firefighters.”
NBC News: “An unusual deal gave Virginia Gov. Glenn Youngkin $8.5 million in stock. He paid $0 in tax on it.”By Gretchen Morgenson
August 11, 2022

In January 2020, Glenn Youngkin, now the Republican governor of Virginia, got some welcome news. A complex corporate transaction had gone through at the Carlyle Group, the powerful private equity company that Youngkin led as co-chief executive. Under the deal, approved by the Carlyle board and code-named “Project Phoenix,” he began receiving $8.5 million worth of Carlyle stock, tax-free, according to court documents. 

The Project Phoenix payout came on top of $54 million in compensation Youngkin had received from Carlyle during the previous two years, regulatory records show. Youngkin retired from Carlyle on Sept. 30, 2020; he won the governor’s election in November 2021. 

[…]

Now, that transaction is under attack by a Carlyle shareholder in Delaware Chancery Court. The suit, filed last week by the city of Pittsburgh Comprehensive Municipal Pension Trust Fund, says the $344 million deal harmed Carlyle’s stockholders, who received nothing in return when they funded the payday.  

Meanwhile, the Carlyle insiders who received the payouts escaped a tax bill that would have exceeded $1 billion, according to the complaint, which accuses Rubenstein, Youngkin and other Carlyle officials of lining their own pockets at the expense of people like police officers and firefighters.  

“The kind of impunity that Carlyle’s control group acted with is shocking and unacceptable,” lawyers for the Pittsburgh pension fund said in their complaint.

“The beneficiaries of the city of Pittsburgh Comprehensive Municipal Pension Trust Fund are municipal fire and police personnel serving the city of Pittsburgh. Many are first responders putting their lives on the line every day. They depend on the integrity of the financial markets to provide for their retirement.” 

[…]

Andy Lee, a New York City-based asset manager who is not involved in the suit, expressed concerns to NBC News about the details it outlined.  

“If the allegations are true, we would discourage such behavior on the part of management,” said Lee, the chief investment officer of Parallaxes Capital, a financial firm that buys TRAs. “They are supposed to represent the interests of public shareholders.”  

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