Those who don't closely follow the world of business and investing may be only dimly aware of the phenomenon known as private equity. By the time readers have finished Pulitzer Prize-winning investigative reporter Gretchen Morgenson and banking and financial consultant Joshua Rosner's thorough, unsparing These Are the Plunderers, their eyes will be opened wide to the machinations of this small group of "modern-age robber barons" whose relentless practice of a "rapacious form of capitalism" allows them to amass unimaginable wealth at enormous cost to American businesses, workers, and taxpayers.
In their disturbing story, Morgenson and Rosner (Reckless Endangerment) devote considerable attention to the activities of Leon Black and his investment firm Apollo Global Management. Apollo rose out of the ashes of Drexel Burnham Lambert, a Wall Street company that became notorious in the 1980s for peddling so-called junk bonds to finance corporate buyouts, and that collapsed amid charges of criminal fraud. Executive Life Insurance Company had been a Drexel client, and in a painstaking account, the authors describe how Black took advantage of that connection to engineer, with the aid of California's insurance commissioner, a takeover of the troubled insurer. The result? Massive profits to Black and Apollo, and disastrous losses of some $3 billion to Executive Life's policyholders.
These Are the Plunderers presents many more of these troubling case studies. Men like Leon Black don't build or create anything. As Morgenson and Rosner so lucidly explain, these "modern privateers" simply act as dealers reshuffling marked cards in the deck of American capitalism. In the high stakes game they're playing, it's a deck that's stacked against the rest of us. --Harvey Freedenberg, freelance reviewer