The independent news organization of Duke University

David Rubenstein’s private equity firm is pushing poor people out of their homes

I’ve written for The Chronicle’s Editorial Board for almost my entire time at Duke. I’m proud of so many of our articles and can’t express in words how profoundly I love my Board members. Finally, after what’s felt like a lifetime, I’m leaving the University for good and have little intention of returning. In lieu of the traditional senior column full of memorable anecdotes and/or spiteful resentment, I wanted my first by-line to be this important editorial that failed to get published this year. In writing this introduction, I am thinking of and mourning the countless lives lost to the violence of capitalism and those who were displaced by cruel opportunists like David Rubenstein.

On April 7th, Last Week Tonight—the late night HBO talk show hosted by John Oliver—aired a piece on mobile homes. The Youtube clip of the 15 minute segment has already amassed nearly five million views and focuses on exploitation of manufactured home owners by wealthy investment firms. While those who live in mobile homes usually own their residence, they pay rent on the land it’s residing in. In the past few years, private equity firms have been buying up mobile home parks and sharply increasing rent to astronomical levels for the majority low-income residents. Because, as John Oliver points out, manufactured homes are not easy or cheap to relocate, poor residents on fixed incomes face eviction and homelessness as rent increases threaten to price them out of their mobile home parks. 

Between clips of residents explaining that they’ve had to ration medication to keep up with rent hikes, a familiar face flashes once across the screen: David Rubenstein. A 1970 graduate, former Board of Trustees Chair, namesake of the David M. Rubenstein Rare Book and Manuscripts Library, and financer of a scholarship program for low-income students, he’s best known on Duke campus for his philanthropy and staggering donations. However, Rubenstein is also a co-founder and co-executive chairman of the Carlyle Group, one of the largest private equity firms in the world with a self-reported $216 billion in assets. While his accomplishments are well broadcasted, what you won’t hear in Rubenstein’s 2017 commencement address or read in Duke Today is how his investment firm has produced millions in returns for investors through “preying” on poor residents.

Private equity firms work by collecting large sums of money from the uber-wealthy to buy companies in hopes of changing them to turn a profit—often through maneuvers like laying off workers or, in the case of the Carlyle Group and manufactured homes parks, buying the community land and gouging low-income residents who can’t afford to move. Carlyle group has also made its billions through “investing in the defense and national security markets.” One company the firm owns—Combined Systems International—manufactures tear gas that has been used in Egypt to disperse protesters and in Ferguson in 2014.

This reality of poor mobile home residents facing homelessness and Black Lives Matter organizers being tear gassed to the financial benefit of Rubenstein’s investment firm is a far cry from the persona he has on campus as a benevolent philanthropist. These connections, in fact, throw the morality of accepting any of Rubenstein's donations into question. 

The danger of philanthropy is how the often violent origins of extreme wealth are obscured by occasional monetary donations. Rich individuals—Jeff Bezos, for example—who amass obscene sums of money through exploitation spend an incredibly small fraction of their wealth on charity projects and receive praise, while paying little to nothing in taxes. The fact that some of Rubenstein’s money is going to a handful of low-income students doesn’t change the fact that his wealth is in part collected through harming the poor and the result of a regressive tax policy that leaves solving social ills to the whims of the rich. Philanthropy and charity can’t make up for the crushing structural income inequality that make possible Rubenstein's unimaginable affluence, nor can it ethically compensate for the deeply immoral roots of that wealth accumulation.

I am not writing this with the belief that things will change. In fact, I’m fully aware this is more or less a practice of screaming into the proverbial void. But, I want this archived—to contribute to a paper trail cataloguing the shameful and irredeemable evil of David Rubenstein’s financial investments. 

Sydney Roberts, Trinity '19, is the co-chair of the Editorial Board.

Comments