Tuesday, December 18, 2012

Would he help?

The Boston Globe reports that the private equity firm that owns the Steward Health Care System of for-profit hospitals also owns the company that makes the semiautomatic rifle used in the recent Newtown, CT, murders.  An excerpt:

Cerberus is one of the most powerful forces in the gun business. It owns Freedom Group Inc., a Madison, N.C., company that is the nation’s largest seller of firearms and the number two seller of ammunition. Freedom, according to its annual report, sold 1.1 million long guns and 2 billion rounds of ammunition that generated $775 million in sales last year.

Together with its gun brands, from Bushmaster to Remington, Freedom is a major contributor to the National Rifle Association and the fight against gun control, according to the Violence Policy Center, a Washington group that tracks corporate funding of gun advocacy.

Does this raise concerns of split purpose?  Dr. Robert D. Sege, director of ambulatory pediatrics at Boston Medical Center and coauthor of a policy statement on gun control by the American Academy of Pediatrics, seems to think so:

If Cerberus is not working for laws to make guns and the community safer, he said, “At the very least it calls into question the overall aims of Cerberus Capital.”

The story notes that the Cerberus officials and the Steward CEO were not available for comment.  It wasn't so long ago that the latter person hosted President Obama at his home during the campaign.  If they had a chance to meet now, would the topic be health care or guns?  Isn't it a good time for this hospital CEO to offer to use his bully-pulpit to help the President make the case to reduce the danger of assault weapons?

(While we are at it, how about other hospital CEOs, even the ones who don't have partners in the weapon business?)


Addendum:  I just learned that Cerberus plans to sell its interest in this gun company, as it was facing pressure from its investors. "The announcement comes one day after the California State Teachers Retirement System, a large pension fund, told The Wall Street Journal that it was reviewing its $500 million investment commitment to Cerberus because of the firm's stake in Freedom Group." Perhaps that will make the choice easier for the CEO.

1 comment:

Roy M. Poses MD said...

In 2011, on Health Care Renewal, we discussed how Cerberus owns both Freedom Group, which makes firearms and ammunition, and Dyncorp, a contracting firm widely used by the military in Iraq and Afghanistan, and accused by some of providing "mercenaries." See: http://hcrenewal.blogspot.com/2011/02/send-mercenaries-guns-and-money.html

There have been questions for a while whether Cerberus ever puts any considerations ahead of short-term revenue, and whether it is good for society for such a firm to own hospitals and employ doctors.