As the economy continues to rebuild, it is now more important than ever to strengthen and empower America’s small businesses, which employ half of all private-sector employees and create two-thirds of new jobs in this country. In order to reach that goal, it is imperative that we pursue policies and initiatives that benefit American business. At the Latino Coalition, we look for partnerships with Hispanic entrepreneurs, public-sector partners, private companies and others committed to building a strong business environment that supports American enterprises.
As a small-business owner, I understand that paying attention to the bottom line is the most important responsibility of any entrepreneur. However, I object to business practices where an insatiable desire to make money at any cost clouds judgment and leads to actions that harm legitimate American businesses. For that reason, I continue to question the behavior of investment fund manager Bill Ackman of Pershing Square Capital Management.
A quick rundown of Ackman’s investments reveals a troubling pattern of behavior that confirms one thing: Ackman is willing to do whatever necessary to make money – even at the expense of the livelihoods and well-being of hardworking Americans. This summer, Ackman described Pershing Square’s investment strategy as making investments that are “good for America.” However, considering Ackman’s involvement in JC Penney, Burger King and Allergan – where his company is actively destroying American jobs – clearly this does not hold true.
In my home state of California, Allergan is fighting a hostile takeover from Pershing Square and Canada’s Valeant Pharmaceuticals. In response, Allergan has eliminated 1,500 research and development jobs in Southern California.
This summer, many Americans were outraged to hear about Burger King’s plan to reincorporate in Canada after purchasing the Canadian coffee shop chain Tim Hortons Inc. A close review of this deal reveals that Ackman, a Burger King investor, stands to benefit from moving this iconic American company. In fact, when the news went public, Pershing Square’s stake in Burger King increased in value by $249 million.
Equally troubling is Ackman’s previous investment in Corrections Corp. of America, the largest private prison company in the United States that also manages deportation facilities. By 2009, Ackman had become CCA’s largest investor, effectively capitalizing on the increased detention of immigrants. His profits continued to rise as more immigrants were detained. When Ackman divested his CCA shares in 2011, they were worth $200 million.
Finally, in one of the most blatant efforts to bring down a U.S. company, Ackman has publicly declared his personal crusade against the nutrition company Herbalife of Los Angeles. (Full disclosure: Herbalife is a sponsor of the Latino Coalition.) The company, which provides products that support a healthy, active lifestyle and offers an opportunity for financial empowerment, has been accused by Ackman of being a pyramid scheme that takes advantage of thousands of Latinos. But don’t be fooled – as his history demonstrates, Ackman is no do-gooder. His claims are another tactic in his $1 billion attempt to bring Herbalife’s stock to $0, and in so doing destroy thousands of jobs and tens of thousands of more small businesses that entrepreneurs depend on.
With Herbalife, Ackman goes beyond undermining people’s jobs and livelihoods, and attacks the integrity of an entire people. He directly insults Latinos – the people he claims he’s trying to “protect.” His July 2014 presentation on Herbalife included the following direct quotes about Latinos: “Many of these people (Latinos) are uneducated” and “They (Latinos) are unlikely to complain culturally, or because in many cases these are undocumented residents.” These comments obviously lack a real understanding of our community, and are both patronizing and offensive to Latinos and to all people.
When his comments are coupled with his CCA investment, it is clear Ackman has no real interest in protecting the Latino community. How can Ackman pretend to have our community’s best interests at heart when his actions only serve to push better wages, healthier lifestyle choices and more employment opportunities further out of reach? What he is protecting is his own bottom line. And in the case of Herbalife, his sole intent is to bring down a strong American business with more than 35 years of serving and improving the lives of its consumers.
In these challenging economic times, now is the time to support companies like Herbalife and the business opportunities it creates, not to destroy American enterprises for personal gain. There is much more at stake than one billionaire’s bet and it is time entrepreneurs and Latinos across the country call Ackman out on his irresp–onsible, destructive tactics.
Allen Gutierrez is the national executive director of the Latino Coalition, one of the largest membership and advocacy organizations for Latino-owned small and midsize businesses. It is based in Washington, D.C., and Irvine. In May, the coalition and Herbalife announced an expanded partnership in which an Herbalife executive would serve on the Latino Coalition Advisory Board, which is dedicated to increasing opportunities for Latino entrepreneurs.
Cited From: Los Angeles Business Journal