Columbia U., Race, Class and the Gentrification of Harlem

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project--Part 10

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a

report

, titled Understanding Columbia University's Expansion into West Harlem: An Activist's Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report notes:

"(June 4, 2014) The District Attorney's Criminal Enterprise Unit and the NYPD's Gang Division conduct the largest 'gang raid' in the history of New York City. The operation uses four years of investigative work, nearly a hundred million dollars, and thousands of hours of surveillance observation to indict 103 teenagers and young adults for charges of conspiracy and assault. The defendants are all residents of the Grant and Manhattanville public housing projects, in the immediate vicinity of Columbia University. In actuality, the indicted are not members of formal gangs. Rather they are either involved or loosely affiliated in a violent inter-project rivalry that claimed two lives from 2011-2014. For years parents had organized to find community-based solutions to problems in their neighborhood, from family brokered truces, job counseling, school reform, and the construction of a welcoming playground and community center. They are dismayed to learn that all the while the city had spent millions spying on their children to criminalize even the most tenuous connection to the violence.

  

"In an open letter to University affiliates, Vice President of Columbia Public Safety, James McShane, celebrates the raids as a moment of progress for West Harlem. He claims that the affair is the result of a `long-term collaboration between local law enforcement agencies.'. What this means precisely, is left unclear. McShane himself has deep ties to the NYPD, having held positions of leadership in four different precincts in the Bronx. During the 1990’s, he was also on the staff of then Deputy Police Commissioner Ray Kelly (one of the masterminds of stop-and-frisk, and later head Commissioner of the NYPD under Mayor Bloomberg). 

In addition, McShane promises in his letter that the University will significantly increase its surveillance and patrol operations throughout Manhattanville. This initiative is to include plain clothed police squads, sky watchtowers, `an extensive system of video cameras,' and an escort service for Columbia students. The document does not so much as mention the hardships endured by local families. Nor does it reveal that the University is responsible for robbing West Harlem of thousands of employment opportunities, on a site immediately across from Manhattanville Houses. Manhattanville public housing, much like the rest of the New York City Housing Authority, suffers from a 27% unemployment rate. When neighborhood parents critique the city's strategies in addressing issues of criminal justice, Columbia offers more of the same, only on an expanded scale....Columbia’s Public Safety Program collaborated with the NYPD as they finished their multi-million dollar surveillance operation to formulate the last of their criminal indictments...."  

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project--Part 9

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a 

report, titled Understanding Columbia University's Expansion into West Harlem: An Activist's Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report notes:

".....(January 2014) Bill De Blasio is elected as New York's 109th mayor, inheriting a 46% poverty rate, homeless shelters swelling with over 50,000 people in need, 9,000 incarcerated on Riker's Island prison without formal charges, working class communities coming apart at the seams under the weight of gentrification, and a city budget that invests twice as much in police equipment than it does in combined welfare services.... To the surprise of much of his voting base, the new mayor appoints Bill Bratton as Police Commissioner, whose aggressive policies of 'pre-emptive policing' during the Giuliani administration laid the foundations for 'stop and frisk'.

  

"(Spring 2014) The first scaffoldings of Columbia’s new campus are erected on the Manhattanville expansion site.

  

"(May 2014) Bill De Blasio releases the city's proposal to combat the crisis in affordable housing. Housing New York: A Five-Borough, Ten-Year Plan, introduces new tax-exemptions and low-interest rates for developers....From the perspective of Manhattanville, the plan has little to offer. What the neighborhood needs in terms of housing policy is the protection of tenants living in apartment complexes that have already been built....De Blasio's proposal....neglects the crisis of corporate subsumption in many previously existing housing infrastructures...."  

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project-- Part 8

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a report, titled Understanding Columbia University's Expansion into West Harlem: An Activist's Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report notes:

"(December 8, 2011) Jeff Mays of DNAinfo reports that Columbia has allocated nearly half of the $700,000 dollars actualized in the Community Benefits Agreement since 2009 to pay private consultants with close connections to New York politicians publicaly supporting the University’s expansion. In an interview with Mays, Community Board 9 member Walter South calls out Columbia’s corruption: `They’ve paid these people $300,000 dollars, and what do we have to show for it? The money should go for community improvement, not hiring the politically connected.'..... 

In response, State Attorney General Eric Schneiderman conducts an investigation of the West Harlem Local Development Corporation....

 

"(March 22, 2012) 69-year old construction worker Juan Ruiz is killed while helping to demolish a century-old warehouse on Columbia’s expansion site. While clearing fragments from the building, he is fatally struck by a beam which has not been sufficiently secured. 60year old King Range, and 30-year old Sakim Kirby are buried in rubble, but extracted quickly enough to survive, although with near-crippling injuries.... 

 

"(March 24, 2012) 'Students Against Columbia University Displacement' and 'The Coalition to Preserve Community' stage a week long occupation of one of the last buildings standing on the expansion site, with the aim of condemning unsafe working conditions and the University’s negligence in fulfilling the Community Benefits Agreement. Their efforts lead to valuable dialogues between Columbia students and neighborhood tenants (dialogues without which this document would have never been written), but fail to win the serious attention of the University administration...." 

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project--Part 3

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a report, titled Understanding Columbia University's Expansion into West Harlem: An Activist's Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report's introduction notes:

“...First, we will trace the basic outlines of Columbia’s expansion process until now, to reveal its actual history. Second, we will emphasize the fact that the struggle for the right to West Harlem is by no means decided.

“The large majority of displacements caused by Columbia’s expansion into of Manhattanville will take place between 2014 and 2030, the estimated time frame for the construction of the new campus. During this period, landlords will continue to raise rent rates for local tenants as they prepare for arrivals of better financial means. Local businesses will close because of untenable ground rents.

“Columbia has said they will fund enterprises run by ‘minorities’. But they have not said when or where, and no one living in the neighborhood has much reason to trust them.

“The police, operating in tandem with the University, will increase the scope and scale of their patrol activity, targeting young tenants of color for drug possession, larceny, and assault – crimes committed at an equal if not higher rate by Columbia students themselves. The incarcerated will struggle for many years with criminal records that restrict them from housing and job opportunities.

“All the while the turbulent changes unfolding in the area will induce feelings of alienation and disillusionment amongst the people who think of it as home. But urban policy can change.

“There is still time and space to campaign against market based housing laws, to fight for tenants’ rights, and lay the groundwork for community welfare relief. There is no reason why Columbia can’t build new classrooms without aggressively reshaping the entire neighborhood. Collaboration and compromise are possible, but only if the voices of local residents are empowered to actualize their own visions for the future…”

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project--Part 2

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a report, titled Understanding Columbia University's Expansion into West Harlem: An Activist's Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report's introduction notes:

"...The Manhattanville Houses comprise six buildings with approximately 2,756 tenants, while Grant Houses has nine buildings and 4,519 tenants....Since 2009, Columbia University has begun purchasing shares in Manhattanville Houses. It is unclear what their intentions are for the future of the buildings. They sit immediately across the street from the site of Columbia’s new campus. We are unable to scrutinize Columbia’s ownership shares, because around 90% of the University’s investments are kept secret.

"What we do know is that Columbia University’s Public Safety Program intends to escalate their surveillance and patrol activity throughout the housing projects, in collaboration with the New York Police Department. Vice President of Public Safety James McShane’s announcement of the University’s plans arrived in the aftermath of this summer’s police raids targeting Grant and Manhattanville Houses. 103 teenagers and young adults were incarcerated under indictments ranging from conspiracy to murder, assault, gun possession, loitering and larceny. Heralded by the District Attorney and the Mayor’s Office as the city’s largest ‘gang bust’, the raid on public housing in West Harlem has caused anger and resentment amongst local tenants.

"Since 2011, parents living in Grant and Manhattanville Houses have organized community-based solutions to the problems in their neighborhood. These have included petitions for a new playground, a community center, smaller classes in public schools, family lead truces between rival groups, and job councilors to mitigate unemployment rates hovering above 27%. But their efforts were mostly ignored. Instead, the city spent as much as a hundred million dollars conducting a four- year covert surveillance operation, that used thousands of hours of Facebook chats, tweets, text messages, and security reels to formulate criminal indictments. The police raid itself was staged as a public relations stunt for Mayor Bill de Blasio and Police Commissioner Bill Bratton to prove to their donors that they too are ‘tough on crime’.

"...The real crisis, the danger of gradual displacement threatening 32,000 New Yorkers through increases in property value affecting the entire neighborhood, is effectively concealed by the University, and seldom mentioned on Columbia’s campus...Two housing developments...are in fact at risk of losing state protection. The first, 3333 Broadway, has already begun the process of purging working class people of color from the building. The second, Manhattanville Houses, is increasingly coming under Columbia’s purview. The University now owns shares in the projects, and plans to carry out extensive policing and surveillance on its tenants. The key to producing a credible analysis...is to conceive of the long-term effects of Columbia’s expansion into West Harlem from our present point in time, until the project’s scheduled completion in 2030..."

.  

Columbia Students Oppose Columbia University's West Harlem-Manhattanville Construction Project--Part 1

In October 2014, the Columbia Student Coalition Against Gentrification (CAGe) released a report, titled Understanding Columbia University’s Expansion into West Harlem: An Activist’s Guide, which indicated why many Columbia students, Barnard students and neighborhood residents in Morningside Heights, West Harlem and Manhattanville are apparently still opposed to the Columbia University Administration's Kravis Business School construction/campus expansion project in West Harlem/Manhattanville. As the report's introduction notes:

"...Since 2003, Columbia University has moved to execute their plan to construct a new campus in the area running from 125th to 133rd street, between Broadway and Riverside...35 acres of the neighborhood known as Manhattanville, which spans roughly from 122nd street to 135th, east of St. Nicholas and Edgecombe Avenues (in total Manhattanville comprises approximately 228 acres of land)...Columbia...erected the first scaffoldings of the new campus in spring of 2014....The zoning change replaces small businesses, manufacturers, and residential buildings with a mixed-use academic model that will displace an estimated 298 residents from 135 affordable housing units in the 35-acre area....

"...The introduction of University facilities to the neighborhood...will  encourage significant rent increases in surrounding apartment complexes, as well. Landlords will attempt to attract a new influx of wealthier tenants...,In 2007, Columbia was forced to complete an Environmental Impact Statement (EIS) in conjunction with the NYC Department of City Planning. Their report admitted `the potential for the indirect residential displacement impact within the primary study area to be significant and adverse' (p. 36). 

"According to statistics recorded by City-Data in 2008, Manhattanville is home to around 32,000 people. 70% of Manhattanville’s residents are Latino, 25% African American, and the remaining 5% Chinese, South East Asian, or White. The median household income for the neighborhood is $32,617. The Federal Poverty line for New York State in 2014-15 is...$36,000 for a household of three...The implication is that most tenants in the area live at or below the poverty level. The changes in property value that Columbia’s expansion will bring to the neighborhood present an imminent threat of  displacement for unprotected tenants.

"Meanwhile...one of the biggest apartment complexes in the area is 3333 Broadway, with close to 1,200 units on 135th street... In 2005, 3333 Broadway...began to remove affordable units in favor of market rate apartments. The University's entrance into Manhattanville has fueled this process further, by channeling an influx of new tenants willing to pay substantially higher rents. Without intervention, 3333 Broadway will be entirely purged of affordable housing by the time Columbia completes their campus in the year 2030. The change will ensue along racial lines, replacing a predominantly African American and Latino demographic with largely white newcomers...".

Community Protest Against Columbia University's Kravis School Construction Project: December 7, 2010

THIS IS THE THIRD ANNIVERSARY OF THE CITY COUNCIL‘S AND BOROUGH PRESIDENT STRINGER’S APPROVAL OF COLUMBIA’S EVICTION PLAN.

Come out and support our protest this Tuesday, Dec. 7th, 3:30 – 5:30PM, against Columbia’s failure to address issues it promised to resolve when the Borough President and City Council sold out the Harlem community.

Where are the jobs? Where is the job training promised by Columbia and the West Harlem Local Development Corp so Harlemites in Boards 9, 10, 11 and 12 could work from the very beginning?

Why does Columbia still insist that residents facing eminent domain must be out of the expansion area by 2018? Why does Columbia not leave the last two property owners alone and let them, and other businesses who still have leases, stay under the 197A philosophy of sharing the community? (The Sprayregens and the Singhs are still fighting against eminent domain, and we still expect that CB 9 would be supporting them according to the CB 9 position against eminent domain, but check out the CB 9 Chair’s statements below.)

Why do the politicians, and the West Harlem Environmental Action group, support Columbia’s biohazard lab #3 business park – spurred on by military defense contracts - in our residential community? Here is how Community Board 9 is approaching this situation – two quotes from Chairperson Larry English in the Columbia Spectator :

“In West Harlem right now and in Harlem in general, there is not a vibrant, entrepreneurial, economic class, and that is crucial to everyone living in West Harlem,” English said in an interview in October.

“Obviously, the last four years caused a lot of tension between the Columbia and the community, but as a community board, we’ve ruled that we’re turning the page. We don’t want to do anything that’s gonna inhibit the project.”

Somehow the whole notion of the 197-a plan, 10 years in the making, is absent from CB 9 Chair Larry English’s language and apparently from his scope of vision. It is a radical shift on the part of CB9; it goes right along with the CU concept of “all or nothing” that CU has pushed relentlessly. All along this dispute with Columbia has been about their illegal conflict of interest regarding how they used the threat of eminent domain as a scare tactic that worked.

A CPC member reacted to English’s comments as follows:

“This guy is really a politician in the making – he’s just changed the language of everything and has conveniently forgotten all of the key points CB9 was defending. He’s dropped the validity of 197-a plan which was ALWAYS what the Community had as an organized response to the real deficiencies in how the neighborhood is being unfairly treated while Columbia grabs land on the cheap.”

COME OUT AND STAND UP FOR THE COMMUNITY PRINCIPLES OUTLINED IN THE 197 A PLAN OF SENSIBLE DEVELOPMENT.

COME OUT AND DEMAND REAL INFORMATION ABOUT THE JOBS COLUMBIA HAS PROVIDED TO THOSE WHO HAVE COME TO ITS “EMPLOYMENT CENTER” OVER THE LAST FIVE OR MORE YEARS.

NO DISPLACEMENT, NO BIOHAZARD LEVEL #3 LABS, NO EMINENT DOMAIN ABUSE. COLUMBIA HAS SAID IT WILL DISPLACE 5,000 PEOPLE IN A TEN BLOCK RADIUS OF ITS EXPANSION AREA. YEAH, CHAIRMAN ENGLISH, WE DO WANT TO “INHIBIT” THAT… AND THE USE OF EMINENT DOMAIN, AND LAB #3’S…

YO COLUMBIA, GIVE UP THE INFO ON THE CENTER AND TELL US, WHERE ARE THE JOBS? SEE FLYERS BELOW IN SPANISH AND ENGLISH AND IF YOU CAN HELP DISTRIBUTE FLYERS, Thanks from the CPC.
----------------------------------------------------------
COALITION TO PRESERVE COMMUNITY -
United for an Open and Strong Community
POST OFFICE BOX 50 - Manhattanville Station
365 West 125th Street
NEW York City, New York 10027

WHERE ARE THE JOBS?

THE COLUMBIA UNIVERSITY EXPANSION PLAN WAS APPROVED BECAUSE IT WOULD PROVIDE JOBS. WHERE ARE THEY?

COLUMBIA PROMISED JOB TRAINING AND 7,000 JOBS. CONSTRUCTION HAS BEGUN. WHAT TRAINING AND EMPLOYMENT HAS GONE TO THE COMMUNITY?

JOIN US IN A DEMONSTRATION TO DEMAND NUMBERS, NOT WINDOWDRESSING.

PLACE: COLUMBIA UNIVERSITY “EMPLOYMENT OFFICE”
Broadway just below 125 St., east side of the Street
Tuesday, December 7th 3:30 – 5:30 P.M.

And hey Columbia: drop your eminent domain abuse* & no biohazard #3 labs in residential Manhattan
* Let businesses and residents stay - support the 197A
NO DISPLACEMENT - AND REAL EMPLOYMENT
For additional information contact Coalition to Preserve Community: write: CPC, PO Box 50, Manhattanville Station, NY, NY 10027. Visit our website: www.stopcolumbia.org ESPANOL – OTRO LADO
----------------------------------------------------------
COALITION TO PRESERVE COMMUNITY -
United for an Open and Strong Community
POST OFFICE BOX 50 - Manhattanville Station
365 West 125th Street
NEW York City, New York 10027

Columbia University's Kravis/KKR/TASC Connection--Conclusion

(To help fund the construction of a new Columbia Business School on Columbia University's 21st-century landgrabbing, private university real estate development/campus expansion project in West Harlem, the co-founder, co-chairman and co-CEO of Kohlberg Kravis Roberts [KKR]--Henry Kravis--recently gave a $100 million "gift" to the Columbia Business School. Coincidentally, Kravis is also the co-chair of the Board of Overseers of Columbia Business School. And since 2009, Kravis's KKR investment firm has been a co-owner of the TASC firm which obtains 40 percent of its annual revenues from Pentagon military contracts.

The following article about Henry Kravis and KKR's pre-1992 hidden history first appeared in the July 22, 1992 issue of the now-defunct Lower East Side alternative newspaper weekly, Downtown, during the period when Kravis's KKR firm still owned New York magazine--prior to its sale to Bruce Wasserstein in 2003 for $55 million).

Like George W. Bush [II]’s father and grandfather, Henry Kravis’s father—a Tulsa, Oklahoma petroleum engineer and oil industry investor named Ray Kravis—was also extremely interested in Republican Party national politics (although he had worked for President Kennedy’s father, Joseph P. Kennedy in the 1940s by investing Kennedy Dynasty money in southwestern oil properties). By the 1970s, Henry Kravis’s father regularly gave about $40,000 a year to the Republican Party’s national and senatorial committees.

In the 1970s, Henry Kravis’s father was also worth about $50 million [in 1970s money]. And in the 1970s, the Tulsa businessman also “began launching the next generation, working his network of New York cronies to position his son for great things to come,” according to The Money Machine.

Henry Kravis’s father had gained entry into the U.S. Establishment after he discovered a tax loophole which enabled investors in oil properties to be taxed at a greatly reduced rate; and, in addition to working for President Kennedy’s father, Ray Kravis also became friendly with Gustav Levy, the then-senior partner of Goldman Sachs & Co. and Co. and with Cy Lewis, a Bear Stearns senior partner. Coincidentally, after Henry Kravis secured his MBA from Columbia University’s Business School in 1969, his father’s friend, Cy Lewis of Bear Stearns, offered him a high-paying job at Bear Stearns.

When an older Bear Stearns partner named Jerry Kohlberg decided that money could be made quicker if he founded his own partnership to specialize in leveraged buy-outs [LBOs], Henry Kravis and his cousin George Roberts (who was also then a Bear Stearns partner) decided to become Kohlberg’s partners in the 1976-founded Kohlberg-Kravis-Robersts [KKR] firm. By the late 1980s, however, Jerry Kohlberg decided he wanted to leave the firm, and did so, although it still bears the Kohlberg name.

Although Henry Kravis and his cousin George Roberts each increased their individual personal wealth too over $325 million by the late 1980s as a result of KKR’s 1980s business activity, some critics of KKR held the firm responsible for breaking up U.S. companies unwisely, destroying thousands of jobs and loading up companies with irrational amounts of debt. By 1989, other critics were warning that “because Kravis and other takeover artists typically finance their deals with enormous amounts of debts…the highly leveraged financial structure of the corporations…may come crashing down at the next recession with dire consequences…for the economy at large,” according to 1989 Current Biography Yearbook. And James Ledbetter characterized Kravis in the Village Voice’s May 26, 1992 issue as “the takeover magician whose greed-driven mergers and acquisitions helped wreck the U.S. economy in the 1980s (a point that even Fortune magazine conceded in a recent issue).”

Kravis’s 1980s business activity was also criticized on ethical grounds by at least one business journalist. In her The Money Machine book, for example, Sarah Bartlett wrote:

“…Was it good public policy for [Oregon Investment Council Member] Roger Meier to be able to commit several hundred million dollars of other people’s money to KKR and then several months later move into a position where he was personally enriched by the firm?...Did it make sense for KKR to be the largest source of financial support to state treasurers or comptrollers who, after their election, were in a position to assign to KKR state employees’ money?

Ironically, despite his enormous wealth, Kravis’s first marriage apparently fell apart in the late 1970s, after he fathered three children, because “he was so preoccupied with work that he barely noticed his wife’s growing frustration” and “some times the only time she would see Henry was when he would come staggering into their bedroom very drunk, and collapse fully-clothed onto the bed” and his wife “found out that Henry was fooling around with a barmaid at a downtown restaurant,” according to Sarah Bartlett’s The Money Machine.

After divorcing his first wife, Kravis began seeing a dress designer named Carolyne Roehm, whom he married in 1985. In the early 1990s, Kravis and his second wife shared a $5.5 million duplex apartment in Manhattan, a farmhouse in Sharon, Ct., a ski house in Colorado and a home on Long Island. In addition, in the early 1990s Kravis also owned a personal jet, a personal helicopter and a $14 million painting, besides also being a member of many exclusive country clubs.

[But after divorcing his second wife in 1993, Kravis then married a politically conservative Canadian policy wonk named Marie Josee Drouin-Kravis, who currently sits on the executive committee of the right-wing Hudson Institute think-tank’s board of trustees and on the corporate board of Ford Motor Company. In addition, the wife of the billionaire who's paying for the new business school building on Columbia University's new campus construction project in West Harlem--in which Columbia hopes to train more Wall Street executives--is also currently the president of the Museum of Modern Art.].

(end of article)

(Downtown, 7/22/92)

Columbia University's Kravis/KKR/TASC Connection--Part 4

(To help fund the construction of a new Columbia Business School on Columbia University's 21st-century landgrabbing, private university real estate development/campus expansion project in West Harlem, the co-founder, co-chairman and co-CEO of Kohlberg Kravis Roberts [KKR]--Henry Kravis--recently gave a $100 million "gift" to the Columbia Business School. Coincidentally, Kravis is also the co-chair of the Board of Overseers of Columbia Business School. And since 2009, Kravis's KKR investment firm has been a co-owner of the TASC firm which obtains 40 percent of its annual revenues from Pentagon military contracts.

The following article about Henry Kravis and KKR's pre-1992 hidden history first appeared in the July 22, 1992 issue of the now-defunct Lower East Side alternative newspaper weekly, Downtown, during the period when Kravis's KKR firm still owned New York magazine--prior to its sale to Bruce Wasserstein in 2003 for $55 million).

To persuade U.S. public officials to serve KKR’s special, private interests by letting KKR use public pension funds to help finance KKR’s lucrative 1980s leveraged-buyout program, Henry Kravis’s firm used a variety of techniques.

In Oregon, for example, KKR hired a member of the Oregon Investment Council named Roger Meier in 1983 to be a director of Norris Industries, a company that KKR had acquired in 1981 with the help of the Oregon Investment Council. Meier then received an annual director’s fee of $15,000 from the KKR subsidiary, and, in 1985, Meier was named by KKR to an $18,000/year position on its Fred Meyers subsidiary’s corporate board. The Money Machine by Sarah Bartlett noted that:

“…When his [Meier’s] dual role was revealed in the local newspapers many Oregonians were outraged.

“It was, and still is, a violation in Oregon for anyone to use his or her public position for private gain.”

After the outrage over his accepting board slots on newly-acquired KKR subsidiary companies—following the approval of the utilization of Oregon public pension funds to finance KKR’s acquisition of these same companies—forced him to resign his Oregon Investment Council membership post, “Meier became an investor in certain companies in KKR’s portfolio” and “was also offered stock in one KKR company at a price that led one to wonder whether it was a sweetheart deal,” according to The Money Machine. He was sold 3,000 shares of U.S. Natural Resources [USNR] by KKR in the Fall of 1986 at $100 a share and by the early 1990s a share in USNR was worth $400, giving Meier a profit on paper of around $900,000 on his 1986 stock purchase from KKR.

When Oregon State Treasurer Bill Rutherford replaced KKR subsidiary director Meier on the Oregon Investment Council, KKR continued to treat kindly an Oregon public official with the power to let KKR use Oregon public funds to serve KKR’s special interests. It invited Rutherford to a KKR sponsored conference in New York City and paid over $800 of the Oregon public official’s conference expenses. Three weeks after this conference, the Oregon Investment Council voted to commit $600 million more of Oregon’s state funds to finance more KKR acquisitions.

To insure that Oregon’s public pension funds continued to be used in support of KKR’s special private interests, KKR intervened in Oregon politics in other ways during the 1980s. It contributed $6,000 to Rutherford’s 1984 campaign for Oregon State Treasurer when he ran against a candidate who opposed investing state funds in KKR’s deal-making operation. Another $20,000 was contributed to Oregon State Treasurer Rutherford’s 1984 campaign by three KKR subsidiaries: Daw Forest Products, U.S. Natural Resources [USNR] and PacTrust, making Kravis’s KKR firm “the largest contributor to Rutherford’s campaign by far,” according to The Money Machine. Not surprisingly, the KKR-sponsored Rutherford then won the 1984 election for Oregon State Treasurer.

Henry Kravis’s KKR—and his cousin and KKR partner, George Roberts—also used their financial power to help influence the outcome of the 1986 election for Oregon’s governor, who was the public official responsible for appointing members of the Oregon Investment Council. KKR gave the Democratic candidate for Oregon governor, Neil Goldschmidt, $6,000 for his primary campaign and $10,000 for his general election campaign. KKR also gave his Republican opponent in the general election, Norma Paulus, $35,000 in campaign contributions through individual donations from George Roberts or KKR subsidiary company donations.

Kravis’s firm also attempted to use its financial clout to influence the 1986 election in New York State for state comptroller, where then-State Comptroller Edward Regan had the sole authority to invest New York’s public pension funds. KKR contributed $50,000 to New York State Comptroller Regan’s re-election campaign chest in 1985 and 1986, making KKR the second-largest contributor to Regan’s campaign. KKR also gave then-New York State Comptroller a $15,000 post-election campaign contribution. Coincidentally, in 1986 then-New York State Comptroller Regan provided KKR with $55 million in public pension fund money for its acquisition program and in 1987 Regan gave KKR another $370 million in public funds for more KKR deal-making activity.

After some economists began to argue that KKR’s way of doing business was harmful to the U.S. economy, some political pressure to limit the use of KKR’s leveraged-buy-out [LBO] method of taking-over U.S. corporations began to develop in the U.S. Congress. To counter this political pressure, KKR hired five different lobbying firms in Washington to prevent passage of legislation that might reduce merger or LBO activity and limit the tax benefits of such activity.

In addition, KKR partners Roberts and Kravis began to pump more of their surplus profits into funding other nationally-known politicians, in addition to George Bush I. After 1987, KKR partner George Roberts made campaign contributions to then-members of the Senate Finance Committee such as Lloyd Bentsen, John Danforth, Robert Dole and Bill Bradley; and he also gave $100,000 in 1988 to Team 100, which was the Republican National Committee’s group of largest contributors. The Senate Finance Committee has jurisdiction over tax issues affecting KKR and 9 of the 20 senators on the committee received campaign contributions from either Henry Kravis, George Kravis or Henry Kravis’s second wife during the late 1980s. The Money Machine reported that Henry Kravis “gave over $80,000 to an assortment of senators, congressmen, Regular PACs and the GOP’s national committee” in 1987; and he gave another $100,000 to the Republican National Committee’s Team 100 in 1988, like his cousin and KKR partner George Roberts had done.

(end of part 4)

(Downtown 7/22/92)

Columbia University's Kravis/KKR/TASC Connection--Part 3

(To help fund the construction of a new Columbia Business School on Columbia University's 21st-century landgrabbing, private university real estate development/campus expansion project in West Harlem, the co-founder, co-chairman and co-CEO of Kohlberg Kravis Roberts [KKR]--Henry Kravis--recently gave a $100 million "gift" to the Columbia Business School. Coincidentally, Kravis is also the co-chair of the Board of Overseers of Columbia Business School. And since 2009, Kravis's KKR investment firm has been a co-owner of the TASC firm which obtains 40 percent of its annual revenues from Pentagon military contracts.

The following article about Henry Kravis and KKR's pre-1992 hidden history first appeared in the July 22, 1992 issue of the now-defunct Lower East Side alternative newspaper weekly, Downtown, during the period when Kravis's KKR firm still owned New York magazine--prior to its sale to Bruce Wasserstein in 2003 for $55 million).

As long ago as the late 1980s, Henry Kravis’s KKR controlled one of the largest industrial empires in the world. As The Money Machine by Sarah Bartlett noted, “Not even J.P. Morgan in his heyday tried to amass an industrial empire on the scale of KKR’s.”

To acquire this economic empire between its founding in 1976 and 1989, the KKR investment banking partnership raised $62 billion from a variety of investor sources. Among the U.S. corporations gobbled up by Kravis’s KKR prior to its purchase of New York magazine in the early 1990s (in addition to Storer Broadcasting and Golden West Broadcasters) were the following: RJR Nabisco; Duracell; Stop & Shop; Safeway; Beatrice Foods; Owens-Illinois; Jim Walter; Union Texas Petroleum and Amstar.

A large proportion of the funds that KKR utilized after 1980 to acquire its privately-controlled economic empire came from the public funds of various state governments which were controlled by U.S. public officials, as well as from “nonprofit” institutional investors in KKR’s acquisition deals (like Harvard, Yale and the Salvation Army), from banks and from the sale of high-risk “junk-bonds.” In 1981, for example, KKR acquired the Fred Meyers company for $420 million “with a large slug of public pension money, courtesy of the State of Oregon,” according to The Money Machine. By 1986, KKR was using public money provided by the state pension funds of Washington, Oregon, New York, Wisconsin, Illinois, Iowa, Massachusetts, Montana, Michigan, Minnesota and Utah to secure the capital required to increase the size of its economic empire by additional “leveraged buy-outs.” One year later, public pension funds from the same 11 states provided 53 percent of the $5.6 billion which KKR used to take private control of RJR Nabisco, according to The Money Machine. The same book also noted that “Over the years…KKR and the state funds came to be more like partners.”

In the course of acquiring its economic empire during the 1980s, KKR executives made millions of dollars in super-profits in a variety of ways:

1. After going heavily into debt to acquire a company that was built up by other people’s labor, KKR usually laid off a significant number of employees of the acquired company and sold off portions of the company;

2. KKR charged an exorbitant management fee to those nonprofit institutions and state government pension funds who invested in its deal-making funds; and

3. KKR pocketed huge acquisition transaction fees. From its 1986 acquisition of Beatrice Food Companies, for example, “KKR earned $45 million in management fees alone and many times that in transaction fees and profits,” according to 1989 Current Biography Yearbook.

(end of part 3)

(Downtown 7/22/92)

Columbia University's Kravis/KKR/TASC Connection--Part 2

(To help fund the construction of a new Columbia Business School on Columbia University's 21st-century landgrabbing, private university real estate development/campus expansion project in West Harlem, the co-founder, co-chairman and co-CEO of Kohlberg Kravis Roberts [KKR]--Henry Kravis--recently gave a $100 million "gift" to the Columbia Business School. Coincidentally, Kravis is also the co-chair of the Board of Overseers of Columbia Business School. And since 2009, Kravis's KKR investment firm has been a co-owner of the TASC firm which obtains 40 percent of its annual revenues from Pentagon military contracts.

The following article about Henry Kravis and KKR's pre-1992 hidden history first appeared in the July 22, 1992 issue of the now-defunct Lower East Side alternative newspaper weekly, Downtown, during the period when Kravis's KKR firm still owned New York magazine--prior to its sale to Bruce Wasserstein in 2003 for $55 million).

Henry Kravis was one of New York's leading financial sponsors of former CIA Director Bush I's 1988 presidential campaign. Kravis and Bush I "really made a connection" at the end of 1987 and "during the early days of Bush [I]'s campaign for the primary election," Kravis "agreed to co-chair a Bush [I] fund-raising luncheon at the Vista Hotel in lower Manhattan, to which many Wall Street dealmakers were invited" that raised $550,000 for Bush's 1988 presidential campaign, according to The Money Machine by Sarah Bartlett. After Bush I won the 1988 election, Kravis was named co-chairman of Bush I's inauguration dinner. And in 1990, Kravis served as the national chairman of Bush I's inaugural anniversary dinner. The Money Machine described what happened at this latter dinner:

"The gala affair, which was held at the Kennedy Center in Washington, was attended by about one thousand people, most of whom were Republican Eagles, the group that gives at least $15,000 a year to the Grand Old Party...In his remarks that fun-filled night, Bush [I] took the time to single out Henry [Kravis] as one of `those who did the heavy lifting on this.'"

Kravis told The Money Machine author Sarah Bartlett in the early 1990s that Bush I "writes me handwritten notes all the time and he calls me and stuff, and we talk" and Barlett also revealed in her book that "when Bush [I] is mulling over a financial issue, he will seek out Henry's opinion." Bush I also offered Kravis some U.S. ambassadorship posts before Kravis agreed to accept an appointment by Bush I to a national trade commission. Kravis also contributed funds to George W. Bush II's uncle, Jonathan Bush, when Bush II's uncle was the financial chairman of New York State's Republican Party organization. New York Republicans named Kravis as their "Man of the Year" and then-Republican Vice-President Quayle gave a keynote speech at a Republican Party dinner which honored Kravis in either the late 1980s or early 1990s.

Coincidentally, Kravis's father--Ray Kravis--was a friend of George W. Bush II's grandfather--Prescott Bush of the Brown Brothers Harriman investment banking partnership. According to The Money Machine, "When his son George [Bush I] graduated from Yale and was looking for a job, Prescott asked Ray if he would give George [Bush I] a job. Sure, was Ray's response."

(end of part 2)

(Downtown, 7/22/92)

Columbia University's Kravis/KKR/TASC Connection--Part 1

(To help fund the construction of a new Columbia Business School on Columbia University's 21st-century landgrabbing, private university real estate development/campus expansion project in West Harlem, the co-founder, co-chairman and co-CEO of Kohlberg Kravis Roberts [KKR]--Henry Kravis--recently gave a $100 million "gift" to the Columbia Business School. Coincidentally, Kravis is also the co-chair of the Board of Overseers of Columbia Business School. And since 2009, Kravis's KKR investment firm has been a co-owner of the TASC firm which obtains 40 percent of its annual revenues from Pentagon military contracts.

The following article about Henry Kravis and KKR's pre-1992 hidden history first appeared in the July 22, 1992 issue of the now-defunct Lower East Side alternative newspaper weekly, Downtown, during the period when Kravis's KKR firm still owned New York magazine--prior to its sale to Bruce Wasserstein in 2003 for $55 million).

"Last week a partnership controlled by Kohlberg, Kravis, Roberts, the New York financial firm famous for engineering takeovers like RJR, Nabisco's, announced it would buy most of the U.S. magazine holdings of Rupert Murdoch...The $650 million deal (which came just days after KKR announced it would back Fleet/Norstar's $625 million acquisition of the failing Bank of New England) calls for the KKR group to buy nine publications. The list includes the Daily Racing Form--the most profitable--and New York, Seventeen and Premiere." (Newsweek magazine on May 6, 1991)

"Henry R. Kravis...has...been characterized as impatient, aggressive, and hard-edged. His longtime friend Michael Douglas is said to have copied some of his mannerisms for his role as Gordon Gekko in Oliver Stone's film Wall Street...An early supporter of George Bush [I], he donated $100,000 to Bush's presidential campaign and, as the candidate's New York co-chairman, raised many times that amount." (1989 Current Biography Yearbook)

In its Sept. 5, 1989 issue, New York magazine published an article on the Kohlberg-Kravis-Roberts [KKR] investment banking partnership which concluded: "KKR has been one of the most self-consciously private and publicity-shy firms on Wall Street." Coincidentally, less than two years later, KKR's K-III Holdings Corp. subsidiary purchased control of New York magazine from the then-debt-burdened Fox Television Network/TV Guide Owner Rupert Murdoch. Shortly after KKR's April 1991 purchase of New York magazine, a New York media analyst named Richard MacDonald predicted: "I bet there won't be any Henry Kravis covers on New York."

In addition to purchasing New York magazine, Seventeen, Premiere and the Daily Racing Form, in the early 1990s, the KKR firm of New York's 1988 Bush-for-President campaign co-chairman, Henry Kravis, also purchased Soap Opera Digest, Soap Opera Weekly, European Travel & Life, Automobile and New Woman from Murdoch in 1991. The Weekly Reader and Funk & Wagnalls encylopedia were also owned by KKR prior to 1992.

Besides owning magazines, Kravis's KKR also owned commercial television stations in the early 1990s. In 1983 it had purchased Golden West Broadcasters and in 1985 it had raised $2.4 billion to gain control of Storer Communications. Consequently, KKR owned 15 percent of Storer/SCI Television--which operated commercial television stations in such places as San Diego, Atlanta, Boston, Detroit, Cleveland and Milwaukee--in 1992. That same year, New York magazine's then-parent company also "made an agreement with an upstate New York cable" commercial television company "to acquire up to $1 billion in cable systems," according to the May 26, 1992 issue of the Village Voice.

In addition to having a special interest in the world of commercial television in the early 1990s, Bush I's 1988 campaign co-chairman in New York was the chairman of the board of trustees in the late 1980s of the New York City area's publicly-funded local PBS television station--WNET/Channel 13. In The Money Machine: How KKR Manufactured Power And Profits, Sarah Bartlett noted how Kravis reacted after gaining more control over Manhattan's "non-commercial'television station:

"Today, Henry sits in his magnificent 42nd floor office exuding the satisfaction of a man who has conquered...`Chairmanship of Channel 13,' he says, clearly savoring the sound of it. `That's going to be a kick. I can bring my business background to that, my interest in television, my interest in education, and I'm having a lot of fun.'

But prior to 1992, Kravis apparently attempted to use his special influence to censor journalists who showed too much curiosity about how his KKR firm operated. As freelance journalist Sarah Bartlett recalled in The Money Machine:

"The journalists who tried to raise questions about KKR's behavior toward its investors were met with a combination of intimidation, personal attack, and disinformation.

"In my own case, after I wrote two stories in the New York Times in August of 1989 about KKR's troubled deals and [former KKR Partner Jerry] Kohlberg's lawsuits, Henry [Kravis] called the newspaper's [then-] publisher, Arthur Sulzberger, to complain. Henry knows Sulzberger...through the Metropolitan Museum, where Sulzberger is [was] chairman. The Met, of course, is where Henry donated $10 million for the Kravis wing.

"On Friday, Sept. 15, Henry [Former WNET-Channel 13 lawyer] Dick Beattie, and another KKR partner, Paul Raether, had lunch with Sulzberger, Max Frankel, the [then-] editor of the paper, the managing editor, and an assistant managing editor who oversees the business section. I never heard afterward from any of the editors who attended the meeting."

(end of part 1)

(Downtown, 7/22/92)