As consumers become more aware of how their spending habits impact social issues, there’s a growing sense that customers are using their power with measurable impact.
Fox News’ Tucker Carlson may have crossed a line when he casually suggested that white supremacy is “actually not a real problem in America,” and that the idea it is a problem is “a hoax” and “conspiracy theory used to divide the country.” Advertisers including Nestle and HelloFresh pulled out of his show, and he departed on a previously unannounced “vacation.”
At the same time, Stephen Ross, the founder-chairman of SoulCycle and Equinox's parent company, hosted a large fundraiser for President Trump, causing a defection of long-time members. The CEO of SoulCycle published a hurried response, trying to distance the chain from Ross' political statements, but it didn’t seem to stem the tide.
But perhaps most surprising was a notably secretive Wall Street private equity player who has been somewhat mysteriously buying up many of the brands and companies in the weapons industry.
Stephen Feinberg, a Princeton alum and Drexel Burnham Lambert banker, in 1992 founded Cerberus Capital. The private equity firm has flown mostly under the radar, other than its purchase of Chrysler back in in 2007. The investment paid off when the U.S. government bailed out the auto industry.
But Feinberg is a stalwart Republican, and was a major donor and fundraiser for the Trump campaign. So when Cerberus decided that weaponry was an undervalued category, Feinberg set out to purchase many of the privately held arms manufacturers, including Colt, Remington, Bushmaster, Marlin, Nesika, Dakota Arms, Tapco, Barnes, Parker Gun, Harrison Richardson, Timber Smith, Storm Lake and Advanced Armament — all gun brands under one owner.
Those purchases made Feinberg the maker and seller of the Colt AR-15, the weapon of choice for mass murders in the U.S.
Feinberg’s automatic weapon was used in the horrific murder of children in Newtown, Connecticut, causing the publicity-shy investor to make a rare public statement and announce that Cerebus would be exiting the arms business. Cerebus at the time told the New York Daily News that selling Freedom Group “allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate.”
That was back in 2012 — but much like President Trump’s promises of sensible gun legislation and background checks, once the headlines were over and the news cycle moved on, Cerebus didn’t sell its ownership in The Freedom Group — the arms rollup that Feinberg led — instead rebranding the collection of gun manufacturers Remington Outdoor Company.
Feinberg’s decision to get into weapons has cause some consternation, even within his notoriously quiet family. New York magazine reported: “his daughter Lindsey posted a picture of her father’s T-shirt to Instagram. It featured images of a sniper rifle trailing smoke, a mounted machine gun, and a row of bullets emblazoned with the tagline IT’S TIME TO WORK. In the comments, she’d posed the question: ‘Who is my dad…….???????’”
But one of his close associates is less concerned. Donald Trump not only gratefully accepted his donations, but named him to lead a working group of the intelligence community — giving him the power to influence personnel and decision-making within the very agencies that The Freedom Group (aka: Remington Outdoor Co.) sells weapons to.
Now Feinberg is coming out of the shadows, as families from Newtown are suing the gun manufacturer for its marketing practices. The suit claims that the guns are marketed with a clear goal of putting guns in the hands of unstable, murderous, and angry young men. No one believes that the AR-15 is a hunting rifle, certainly not hunters. As of March 2019, the suit was moving forward.
And it’s possible that Cerebus’ growing and unwanted notoriety could spread. The firm’s ownership is now under the microscope, as is its ownership of such storied brands as Avon, Staples, and the massive grocery store rollup of Albertsons.
To be clear, Wall Street has historically been able to separate profits from products that produce them. And Cerebus has gone to great lengths to create layers of corporate entities between it and the guns it manufactures.
But one can’t help but wonder if Ceberus employees find themselves walking past the blaring headlines on newsstands of the latest American carnage, as President Trump so aptly called it the day of his inauguration, and think “My company is building and selling the weapons that killed those people in Walmart?”
In March 2014, having promised to exit the gun business, Cerberus rejected a $1 billion buyout offer for the Remington Outdoor Co. — and has since said it was “unable” to find a satisfactory buyer. In March 2018, the company sought Chapter 11 bankruptcy protection, leaving the actual stake of Cerberus in the gun business hidden behind a dense and complex financing.
Which brings us to Feinberg’s Trump connections. Feinberg’s Cerberus Capital owns the military contractor DynCorp International. He hosted a posh $50,000-a-plate fundraiser for Trump and gave $1.5 million to a pro-Trump super PAC in 2016.
Maybe it’s time for the media to start calling it the Cerebus AR-15 -- just so readers and viewers know where to send their hopes and prayers when the next mass-casualty shooting takes place?