“75 years of responsible leadership.” The slogan is hard to miss, towering above Parents Field and on banners around the Claremont McKenna College campus. CMC is proud of what it has accomplished in the last three-quarters of a century, “educat[ing] its students for thoughtful and productive lives and responsible leadership in business, government, and the professions.”
To cap off the celebration, last Friday CMC announced a $140 million gift from trustee George Roberts CM ’66, the co-executive chairman of global investment firm KKR and pillar of how far a CMC education can get you in the world of wealth. Roberts’ donations to the college have earned his name a place on the campus gym, an academic building, and the environmental studies center. His latest prize is the Roberts Campus, the school’s entire eastern half, which is expanding by 75 acres.
Alumni are an important part of any college’s identity — just look at the celebrations at Pomona College, Pitzer College, and Scripps College this weekend. And CMC’s 75th anniversary campaign is centered on the impact its students have had and will have on the world at large.
So what exactly is CMC celebrating in Roberts, with whom it has now redoubled a partnership for the existential future of the school?
Great financial success, to be sure. Roberts and his partner Henry Kravis CM ’67 started their firm in 1976 with just $120,000 in capital. They were worth $9.1 billion and $8.7 billion, respectively, when they stepped down from their chief executive roles last October, according to Forbes.
But that fortune didn’t come from nowhere. Roberts and Kravis proceeded with early business masterstrokes like acquiring RJR Nabisco in 1988, saddling it with $25 billion in debt, laying off 2,600 workers, and leaving the company in the dust seven years later. Investopedia called the episode “a prime example of corporate kleptocracy.”
In 2005, the firm jointly acquired Toys ‘R’ Us, saddling it with $400 million in debt and seeing 33,000 workers laid off. The company filed for bankruptcy in 2017 and KKR walked away with at least $15 million, according to Marketplace.
More recently, Roberts and Kravis have decided to test the profitability of infrastructure. In addition to KKR’s stakes in oil pipelines that cross Indigenous land, an issue raised this year by student activist group KKR Kills, the firm purchased a 90 percent stake in municipal water systems for Bayonne, New Jersey and Middletown, Pennsylvania.
As Henry Johnson CM ’14 recounted in TSL, Bayonne’s water prices rose 28 percent under the new owners and, a New York Times investigation found, local oversight stagnated.
Just this week, Buzzfeed News revealed that KKR’s $1.3 billion purchase of BrightSpring Health Services, which owns more than 600 residential facilities for people with disabilities, was followed by “a crisis … in its group home division, where conditions grew so dire that nurses and caretakers quit in droves, a state prohibited the company from accepting new residents, and some of the most vulnerable people in its care suffered and died.”
“Overseen by KKR’s handpicked board of directors, BrightSpring executives in many cases kept wages lower than those at competing facilities or Walmarts, despite pleas from local managers that they were unable to safely staff the homes,” Buzzfeed reported. Medication went undistributed, citations for dangerous conditions soared and — you guessed it — “the KKR-controlled board approved a plan for BrightSpring to take on more than a billion dollars in debt.”
This editorial board would be thrilled to see the school justify how the relentless pursuit of billions in profits at the expense of jobs, lives and our shared future are an example of “responsible leadership.”
You get the idea. Big picture: private equity firms’ acquisitions of retail firms saw 1.3 million Americans lose their jobs over a decade, The Washington Post reported in 2019, adding that “ten of the 14 largest retail bankruptcies since 2012 have been at private-equity-owned companies.”
When firms like KKR try to ransack the healthcare space, people die. A 2021 National Bureau of Economic Research study found private equity ownership of nursing homes “increases the short-term mortality of Medicare patients by 10 percent.”
That’s not to mention the vital role that KKR plays in propping up the oil and gas industry, hastening the destruction of our planet: 82 percent of KKR’s energy holdings are in fossil fuels, a Private Equity Stakeholder Project report found last October.
Parasitic capitalism pays, and that money is funding Claremont McKenna’s campus expansion. We can argue about whether CMC’s new science center and athletics facilities will make the world a better place, but this editorial board would be thrilled to see the school justify how the relentless pursuit of billions in profits at the expense of jobs, lives and our shared future are an example of “responsible leadership.” By embracing Roberts’ millions with no questions asked, the school has continued to declare exactly what kind of conduct it is comfortable upholding.
We know it’s unlikely that President Hiram Chodosh will make the financial blunder of acknowledging the harm his biggest benefactors have wrought since they graduated from Claremont Men’s College. But embracing “effective dialogue” on campus, which he has forcefully encouraged, necessitates practicing “intellectual integrity” — acknowledging all sides of an issue. So wouldn’t the choice to have that conversation give today’s CMC students a taste of some truly responsible leadership?
TSL’s editorial board is comprised of its editor-in-chief and two managing editors, and does not necessarily represent the views of other TSL staff members. Anushe Engineer reported on CMC’s expansion this week and recused herself from this editorial.