Ira - polluting beelzbub - confiscate his billions!
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Ira and Ingeborg Rennert
Ira Rennert: capitalist pig of the month
This may be just the first in a continuing series based on the time I have available and on the availability of suitable candidates—I imagine that the second condition will be a lot easier to meet. It is written in the spirit of Keith Olbermann’s “Worst Person in the World” awards that he hands out on a fairly regular basis on his MSNBC cable show. As you can imagine, Bill O’Reilly is a multiple recipient. My approach will be somewhat different. I am far more interested in highlighting the sins of the super-rich, who are after all the ones who pay the piper. I should add that Ira Rennert received “The Awful Truth” award of the year in 1999 from Michael Moore (more below), so in a sense I am following in both of their footsteps.
As some of you will recall, I have referred to the Real Estate section of the weekly New York Observer as a kind of scandal sheet in which various shady characters are reported as buying or selling hugely expensive apartments. This included Jack Barnes and Mary-Alice Waters, the two leaders of the Socialist Workers Party, who sold a loft near party headquarters in the West Village last year for nearly 2 million dollars. The article was titled “Communists Capitalize on Village Sale—Get $1.87 M. for Loft”.
Earlier this month, Max Abelson, the Observer’s real estate reporter scooped the Barnes and Waters transaction, reported on another big sale (”Big Deal! Big-Hearted Baron Ira Rennert Buys Daughters Spreads in 740 Park, 778 Park for $60 M.-Plus“)
Brooklyn-born Ira Rennert has an oceanic $185 million Hamptons compound, a few infamous smelting plants in Peru and Missouri, and a billion-dollar fortune from junk bonds and Hummer vehicles.
He also has something of a generous streak: Two sources told The Observer that Mr. Rennert has bought two of New York’s most expensive apartments, at two of the best-bred co-op buildings, for his two daughters…
Mr. Rennert, meanwhile, has his own multiunit spread nearby at 625 Park Avenue, plus his 63-acre oceanfront property—“the largest home in America,” The New York Times wrote in 1998. He’s also been known for a different kind of excess: According to a 2003 BusinessWeek article, the E.P.A. has ranked his Renco Group—a conglomerate based on mining and smelting—as the country’s 10th-biggest polluter.
The news that this scumbag is buying 60 million dollars worth of apartments for his useless offspring goes hand in hand with the fact that his corporation is the country’s 10th biggest polluter. With one he poisons the air and water and with the other helps turn Manhattan into a theme park for Eurotrash and hedge fund managers.
Ira Rennert’s 78,000 square foot house
Although the Observer does not mention it, there was quite of resistance to Rennert’s 78,000 square foot weekend retreat from his Hamptons neighbors, including the rich and powerful. On August 24, 1998, the Scottish Daily Record reported:
Eccentric Ira Rennert’s massive home is set to be twice the size of the White House when it is completed.
But millionaire locals, who include Steven Spielberg, have dubbed the plans “a monstrosity” and vowed to fight them every step of the way. Rennert, 63 – who made his fortune building Humvee military jeeps – calls his proposed palace Fair Field.
The 100 million pounds monster building is set to take up 63 acres on ocean-front land.
It will have 39 bathrooms, 29 bedrooms, a kitchen the size of a restaurant, garage space for 200 cars and a huge power plant.
And if the residents get bored, there will be two tennis courts, two bowling alleys, a 164- seat cinema, a basketball court and two outdoor sports pavilions.
But neighbours in the posh Hamptons area of New York state have set up a pounds 50,000 fighting fund in a bid to halt the project.
Movie director Spielberg is being joined by tycoons Mortimer Zuckerman and Donald Trump in his opposition to the plans.
When you have Donald Trump lining up against you on the basis that you are just too ostentatious and vulgar, then you have really broken free from the earth and sailed straight into the stratosphere.
As might be expected, a target as tempting as Ira Rennert invited the scrutiny of Michael Moore, who also has finely tuned antennae for capitalist pigs. On November 13, 1998, the NY Daily News reported on Rennert’s bid to prevent Moore from documenting his excesses.
A rich industrialist who is building one of the biggest private houses in America went to court yesterday to stop “Roger and Me” film maker Michael Moore from documenting his edifice complex.
Millionaire financier Ira Rennert filed a lawsuit to bar the ambush interviewing that is Moore’s hallmark, as the mischievous movie maker prepares a satire about Rennert whose 25-bedroom, 39-bathroom oceanfront digs has even his wealthy neighbors on Long Island’s East End alarmed.
Yet part of the suit, which was filed Tuesday in Manhattan Supreme Court, was abruptly withdrawn yesterday afternoon by Rennert.
The complaint had contained a sworn affidavit from Joanne Rullan, a receptionist at The Renco Group, the holding company for Rennert’s business empire, in which she charges she was assaulted by Moore on Nov. 5.
In 2000, Rennert made a bid to take over the RJB coal mining company in Great Britain. As The Independent reported in an article titled “Sex Offender Heads Renco Bid For Rjb”
on August 27 of that year, predatory investments seem to go hand in hand with sexual predation:
ONE OF the top executives at US company Renco Group, now in talks to take over RJB Mining, is a convicted sex offender who has just completed three years’ probation after admitting “sexual misconduct” with a teenager applying for a job with the company.
Marvin Koenig, the 70-year-old executive vice president and right-hand man to the group’s controversial founder, Ira Rennert, pleaded guilty to two counts of sexual misconduct concerning an incident in 1995.
Mr Koenig lured Pearl Higgins (not her real name) into his offices in New York’s Rockefeller Center one evening, after having offered her a $ 10 an hour clerical job.
Manhattan District Attorney papers allege that Mr Koenig pounced on her with a knife, forcing her to have oral sex before raping her on the boardroom table. The petrified teenager called the police and Mr Koenig was arrested on three counts of rape in the first degree, a class B felony which carries up to 25 years in prison.
Showing the utter disjunction between professed religious beliefs and one’s ethical behavior, Rennert is an orthodox Jew. As such, it should not come as any big surprise that he is a supporter of the most rightwing parties and causes in Israel. As the Zionist state becomes more and more isolated in the world, it finds that it can only rely on orthodox Jews and Christian fundamentalists for hard core support.
On February 10, 2003, the Jerusalem Report revealed how Rennert and other wealthy American Jews (including the equally disgusting Ronald Perlman who I reported on here) flout Israeli laws in order to fund their favorite rightwing politicians:
Six names emerge repeatedly in conversations with those in the know about American funding of Israeli politics: Edgar and Charles Bronfman, former Seagram’s owners; Slim-Fast diet food founder S. Daniel Abraham; Saban, cosmetics heir-philanthropist Ronald Lauder, and Ira Rennert, chairman and CEO of The Renco Group, which specializes in metals and makes the HUMVEE all-terrain vehicle.
Edgar Bronfman, president of the World Jewish Congress, his brother Charles, a noted philanthropist (and former chairman of The Report), and Abraham (a former Report part-owner), have been involved in political efforts at the left side of the Israeli political spectrum, with people like Shimon Peres and Barak. In the past, Saban reportedly donated hundreds of thousands of dollars to the campaigns of both Barak and former defense minister Yitzhak Mordechai. (Edgar Bronfman, Saban and Abraham did not respond to repeated interview requests.)
Lauder is close to former prime minister Benjamin Netanyahu, and reportedly paid the million-dollar-plus fee collected from the 1996 Netanyahu campaign by U.S. mega-consultant Arthur Finkelstein. A spokeswoman for Lauder declined to comment on his current contributions or what he had done in the past. She told The Report via e-mail that “since Mr. Lauder won’t make campaign contributions in Israeli elections, he isn’t able to offer any commentary on what others may do.”
Rennert, who is known as a big financial supporter of right-of-center candidates and causes, often donating through NPOs, also declined to comment.
La Oroya, Peru: victims of Rennert’s pollution
Evidently, some religious leaders—closer in spirit to the holy texts than Rennert—decided to appeal to his better instincts, a mission that seems inspired more by a desire to put pressure on the greedy slob than actually change his behavior. In a web-only article that appeared on the Nation Magazine website last June, Sara Shipley Hiles described how “Religious Leaders Challenge a Polluter“. It is worth quoting in its entirety.
It’s a long way from the thin air of an impoverished mountain village outside Lima, Peru, to the tony atmosphere of the Hamptons. But a group of religious leaders from Peru recently traveled to New York to tell billionaire industrialist Ira L. Rennert that even if he can sleep at night, comfortably ensconced in his 110,000-square-foot estate in Sagaponack, God is watching.
The clerics want Rennert to improve health care and dramatically decrease emissions at a metals smelter in La Oroya, Peru, a town high in the Andes Mountains where thousands of children are suffering from lead poisoning. The smelter, known as Doe Run Peru, is a subsidiary of Rennert’s $2.4 billion private holding company, the Renco Group.
Peruvian Roman Catholic Archbishop Pedro Barreto publicly called upon Rennert, a well-known philanthropist and supporter of Orthodox Jewish causes, to honor his religious faith and work harder to solve La Oroya’s pollution problems.
“Our main purpose was to invite Ira Rennert to become a leader in social responsibility, under the assumption this is an ethical and moral issue,” Barreto said, during the group’s three-city visit to the United States this month.
Rennert declined to meet with Barreto and his colleagues, referring them to a local representative for the smelter in Lima. The religious delegation–which included an evangelical pastor, a Jewish leader and several Catholic nuns–instead visited with various religious agencies during the stop in New York City.
Calls to Rennert’s office at Rockefeller Center asking for comment on the visit were referred to Victor Belaunde, a Doe Run Peru spokesman in Lima. Belaunde said that company officials met with the religious leaders June 8 in Lima and updated them on ongoing environmental improvements.
Company officials claim Doe Run Peru has already committed more than $107 million to clean up the smelter in the decade since Renco acquired the facility. The company pays $1 million annually to fund a health program run by the government’s health ministry, Belaunde said. He added that the smelter is now in compliance with Peruvian standards for lead emissions.
Despite these investments, a recent study by St. Louis University scientists found that 97 percent of children in La Oroya are lead-poisoned, a condition that can cause mental and physical deficiencies. And a new report from LABOR, a Peruvian non-profit group, found that emissions of lead, arsenic and sulfuric acid have actually increased in the past two years, according to Friends of La Oroya, a group supporting the religious leaders’ delegation.
The city of 33,000 people has been declared one of the world’s ten most polluted places by the Blacksmith Institute. Visitors to La Oroya first notice that the surrounding valley looks like a bomb crater, stripped bare of vegetation by acid rain. Then they notice the massive Doe Run smelter complex, which bathes city in choking fumes and toxic dust that contains cadmium, arsenic and lead.
To combat the dust, Doe Run organizes cadres of women to wash public streets and encourage children to wash their hands. The company has delayed some mandatory environmental work that was originally required to be completed in 2006. Now the work is set to be done by 2009, but even then, according to the company’s own study, many children in the town will still have blood-lead levels well above the acceptable standard.
“In the last few years the pollution in the air is worse, the soil has become infertile and the water has become polluted,” said Sister Mila Diaz, a Dominican nun from La Oroya who was part of the religious delegation. “We don’t want to fight with the company. We don’t want the company to close their doors. What we want is for them to comply with the promise they made to clean the air.”
The religious leaders’ tour also stopped in St. Louis, where Doe Run Peru’s former parent company, Doe Run Resources, has its headquarters. Company officials there declined to meet with the group, saying that Doe Run Peru is no longer its subsidiary; the Peruvian company now reports directly to Renco.
In addition, the group visited Herculaneum, Mo., where Doe Run operates the largest lead smelter of its kind in the United States. Longtime environmental activist Tom Kruzen took the group on a “toxic tour” to see the neighborhood where Doe Run was forced to buy out more than 140 homes surrounding the plant.
“You can pray all you want,” Kruzen said of Rennert, “but if you’re doing bad things to people, or if your endeavors do bad things to people, then you’re not a moral person.”
Rennert has grown rich using a formula of buying dirty companies, taking out steep loans and paying himself princely dividends, as documented in articles in Forbes and Business Week. Several of his companies have filed for bankruptcy, allowing Rennert to buy back assets for pennies on the dollar. Rennert’s empire of mining and manufacturing firms also includes AM General LLC , the maker of HUMVEE military vehicles and the gas-guzzling Hummer, as well as a magnesium producer and a steel manufacturer.
The wealthy financier also has given widely to charitable and civic causes. Rennert and his wife, Ingeborg, have contributed to restoring the Western Wall Tunnels in Jerusalem, where the visitor’s center bears the name “The Ingeborg and Ira Leon Rennert Hall of Light.” New York University has an endowed professor of entrepreneurial finance in Rennert’s name, and the Rennerts donated between $1 and $1.9 million to the World Trade Center Memorial .
At one time, Rennert lent his name to the Torah Ethics Project, an effort to remind Orthodox Jews of the importance of “living in accordance with the highest ethical standards.” A statement on the project’s website urges moral behavior in all business and personal matters that “adds luster to God’s sacred name.”
Rennert’s supporters have included Elie Wiesel, the Nobel Peace Prize-winning Holocaust survivor. At the prestigious Fifth Avenue Synagogue in New York, where Rennert is chairman, Rabbi Yaakov Kermaier defended Rennert’s reputation.
“I’m not really familiar with any of his business operations,” Kermaier said in an interview. “I know him as a person of extraordinary generosity and unimpeachable personal integrity.”
Congratulations, Ira Rennert, you are the Unrepentant Marxist’s capitalist pig of the month.
UPDATE: Marxmail subscriber Colin Brace wrote today: Louis, I heartily endorse your nomination. Rennert is a world-class bastard. Here is what I wrote several years ago on my short-lived blog about the activities of his company Doe Run in Peru.
Ira Leon Rennert (born 1934, Brooklyn, New York) is an American investor and businessman. He has built up his wealth by using junk bonds to secure companies, often in bankruptcy sales, in basic, cyclical industries like mining and metals. Over the years he has amassed holdings in lead smelters, coal mines, magnesium producers and vehicle assembly lines.
During the 1990s he sold approximately $1.5 billion in high-yielding junk bonds to create one of the nation’s largest privately held industrial empires, and his personal fortune is estimated to be around $500 million
Rennert started his career as a credit analyst on Wall Street in 1956. He also served briefly as a salesman for a typewriting company and a stock brokerage, before launching his own business, I.L.Rennert & Co. in 1962 based at a Beaver Street office in Lower Manhattan. At this time he was censored by the NASD for operating without enough capital. This occurred again in 1963 and his licence was revoked on November 29, 1964 and he was effectively banned from the securities industry.
Milken – as a bond trader for Drexel Burnham Lambert Group Inc. - was successful selling high-risk, high-yield bonds issued by struggling or under-capitalized companies. Before Milken, these were considered ‘junk’ and most investors avoided them, but it was Milken’s innovation that formed a strategy of using these junk bonds to provide capital for corporate raiders to conduct hostile company takeovers. With $2 billion in junk bonds financed by Milken, Integrated Resources’ stock shot up and its directors paid themselves substantial salaries (c.f. the 1991 book Den of Thieves about the junk bond scandal). However, the whole junk bond industry eventually collapsed, Integrated Resources defaulted on $1 billion in bond debt in May 1989 and it finally filed for bankruptcy.
During Intergrated Resources’ boom time in the 1980s, Rennert was pursuing his own private strategy of acquiring struggling companies and issuing junk bonds. He sold millions in bonds to private investors in order to use the borrowed capital to establish a portfolio of private industrial companies in his holding company, Renco, which owned nearly all the shares, becoming one of Wall Street’s principal buyers of companies shunned by other purchasers.
WCI Steel and its Pension Plan
His first big deal came in 1988 when Renco bought a Warren (Ohio) steel company from its bankrupt parent, LTV Steel Co., for a price tag of $140 million, of which half was paid for with debt. This company then became WCI Steel Inc. and Rennert was able to turn it around using $250 million in junk bonds. Now, rather than using junk bonds for acquiring companies, Renco’s subsidiaries issued bonds after being acquired, using the proceeds to fund their individual operations and to pay Renco (and indirectly Rennert) large dividends and fees. For example, WCI sold bonds totalling $300 millon and paid $108 million of the proceeds as a dividend to Renco based on WCI files with the SEC. In 1998, Renco Steel Holdings Inc. was created to serve as a holding company for WCI. The holding company then sold $120 million in junk bonds, this time paying $100 million to Renco.
After a strike in 1995, Rennert, as WCI Steel’s chairman, agreed to create a new pension plan for the 2,000 employees and retirees whose old plan had collapsed in the previous bankruptcy. In 2003, the due date on WCI Steel’s $300 million of notes came about and by the autumn the company was declared bankrupt. The steel workers’ pension scheme was owed $282 million but the company only had $93 million in assets, thus producing a $189 million shortfall. With steel prices rising, an investment group led by Rennert, came forward with reorganisation proposals that pledged to keep the WCI pension plan going, reviving it by investing $66 million over four years, leaving a $100 million plus shortfall. The plan emerged as the front runner, with the non pension assets being transferred, and the ailing pension plan left was the empty shell of the old, bankrupt WCI Steel. Newspaper reports at the time stated that the Pension Benefit Guaranty Corporation was threatening to put a lien on Rennert’s personal estate in order to ensure the steelworkers’ benefits (since, when a pension plan defaults, the agency has the power to chase the assets of any companies that are more than 80% controlled by the same corporate parent).
In 1989, Renco acquired the US’ largest magnesium producer in Utah for an undisclosed price. Removing minerals from the water of the Great Salt Lake, Magnesium Corp. uses chemicals to refine the magnesium used in products ranging from bombs to bicycles. In 1996, Renco established Renco Metals Inc as a holding company for Magnesium Corp. and issued $150 million in bonds. Just like WCI, the company paid Renco $90 million in dividends by the year end. In 2001 the Department of Justice filed suit against Magnesium Corp. for multiple violations of hazardous waste law (the EPA ranked Renco’s holdings as the nation’s 10th largest polluter), but also it cited Rennert’s removal of money from Magnesium Corp. through the bond issue, ‘leaving the companies insolvent and unable to pay their bills'. Eight months after the government’s filing of the suit, Renco Metals Inc. filed for bankruptcy protection in New York.
Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn’t have to invest much of his own money. His purchase of AM General in 1992 was bought with a down payment of just $10 million. In 1994, Fluor Corp. of Los Angeles sold Doe Run to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period. In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor debt. And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC). The company also made promises to spend $148 million to curb pollution and modernise its La Oroya smelter by the end of 2006.
With the Gulf War in the offing boosting demand for Humvees, Rennert was well-placed with AM General at a time, however, when his other companies began to stutter. In November 2000, Lodestar Holdings, his coal company, defaulted on an $8.6 million bond payment and was forced into bankruptcy four months later.