The Service Employees International Union has made a proposal for increased scrutiny of private equity investments made by the Washington State Investment Board. The proposal calls for buyout shops backed by the board to release both their own financial data and that of their portfolio companies.
The information about portfolio companies would include: “Revenues, expenses, earnings, taxes paid, government revenues received, executive compensation, employment and compensation of non-managerial employees and debt levels, including debt-to-equity ratios.”
The proposal argues that private equity firms are playing a bigger and bigger role in both the U.S. economy and the global one and says that, at present, the industry is subject to limited regulation and oversight.
Because of this status, the firms and their portfolio companies “operate without public accountability and employ strategies that have resulted in job loss, environmental harm, underpayment of taxes, undermining of service quality and threat of corruption,” according to the text of the proposal, which then argues these strategies “threaten the long-term social and economic interests of fund beneficiaries.”