In America, we have a strong culture of ownership. We have utmost respect for people who own their own businesses. We talk of taking ownership for one's actions. And when there's a major problem, the person who courageously takes responsibility - often the CEO - steps up and says, "I own this."
After Friday's tragic massacre of twenty innocent first graders and six teachers, I was curious to see who owned Bushmaster Firearms. Upon learning that a private equity firm Cerberus Capital owned Bushmaster's parent company, the Freedom Group, I decided to turn my outrage into action by organizing a candlelight vigil in front of the townhouse owned by the founder / head of Cerberus. This event (at 36 East 67th Street in NYC) is scheduled for 7pm tomorrow (Wednesday, 12/19) evening and seems to be attracting a great deal of interest from others who are equally outraged.
This morning, I woke up to news that Cerberus released at 1am that they will retain a financial adviser to sell their interests in the Freedom Group (presumably at the highest price the market will bear). Unfortunately, it is too late.
Where is the sense of ownership from Cerberus? Where is the sense of responsibility to society? What ownership did Cerberus and its leaders show in 2006, when they decided that investing in Bushmaster could provide a favorable return to investors and themselves? What ownership have they shown in the past 6 years? After Tucson? After Aurora? After Oak Creek? On a daily basis as gun-based murders and suicides don't even make the news unless they're committed by or target a famous athlete or celebrity or they're especially horrific?
What ownership did Cerberus show when gun lovers questioned their loyalty and the NRA issued a statement quoted in the New York Times: "N.R.A. has had contact with officials from Cerberus and Freedom Group for some time.... The owners and investors involved are strong supporters of the Second Amendment." (Interestingly, the NRA has since removed that statement from their website.) What ownership did they show when sales of assault weapons increased post-Aurora (as they presumably are doing now)? Did they do anything besides retain the extra revenue? In what ways has the Freedom Group demonstrated ownership by living up to their value statement to society as promised on their website "We will not compromise our moral or ethical principles."?
On a related note, where is the sense of ownership from corporations who fund groups like ALEC that work to pass gun rights legislation? Where was the sense of ownership from public funds (including teachers' pension funds), which willingly invested in funds owning gun manufacturers without expressing concern? And where is the sense of ownership by the majority of NRA members who do NOT support all of the organization's policy stances, but who neither speak out within the NRA nor resign their memberships?
Unfortunately, as the nation watched our president brought to tears reading the names of twenty first graders and as the town of Newtown (in which, ironically, Martin Feinberg, father of Cerberus's founder / head Stephen Feinberg lives) endures funeral after funeral, Cerberus, which was caught with the "hot potato" of Bushmaster, now simply wants to walk away by divesting ownership of the company and the moral concerns and moving on. In their statement, Cerberus passes sole ownership of the issue to Congress by saying a sale allows them to meet obligations to investors "without being drawn into the national debate." Media reports suggest they could be selling the Freedom Group to avoid losing investments from pension funds like the California State Teachers' Retirement System, which the New York Times claims has a $751.4 million investment in Cerberus.
I recognize that Cerberus has a fiduciary responsibility to shareholders. However, Cerberus's leaders, who for six years worked to enrich themselves with the sale of every Bushmaster, Remington and other Freedom Group weapon, have a unique opportunity (obligation?) to do more than just passing the Freedom Group off to the highest bidder who would presumably continue to make these weapons.
What could they do? Here are some initial ideas but I welcome readers to suggest others.
- Donate Freedom Group profits to groups addressing mental illness
- Support efforts to pass meaningful legislation that bans semi-automatic weapons and high-capacity magazines, and voluntarily stop manufacturing semi-automatic weapons and high-capacity magazines, even before Congress implements a ban
- Cerberus leaders could purchase the Freedom Group for themselves to avoid any potential fiduciary conflict with other Cerberus investors and then take "ownership" by continuing manufacture of weapons for military and law enforcement use but stopping sales of weapons to civilians. (Similarly, they could sell Freedom Group to responsible investors who would do the same.)
Of course none of these actions will ever happen, as they would entail a direct financial hit to Cerberus's principals. But given that Forbes estimated the wealth of Cerberus's leader, Stephen Feinberg, to be $1B, perhaps he might sacrifice a small percentage of his wealth in order to really take "ownership" of this problem rather than simply trying to walk away.