Tuesday, November 10, 2009

"Privates" Asking for Government Money

Xe (formerly BlackWater Security) CEO Erik Prince told a Congressional panel his company's financial information was "private." The federal government provided over $500 million in annual contracts to his firm in 2007, the year of the hearing. Facing serious negotiating leverage, Eric didn't budge.

Fast forward to 2009. Mrs. Alice Rogoff Rubenstein, founder of a charitable nonprofit to promote Alaskan Native American art and culture, wants government support for The Alaska House, located in New York City. She approached both federal and state representatives for $1.5 million in funding. Otherwise the 3,000 square foot Alaska House may have to its doors, after opening in September 2008.

Mrs. Rogoff provided financing for the Alaska House but can no longer afford to do so. Her husband, David Rubenstein, is co-founder of The Carlyle Group and the 123rd richest American with $2.5 billion. His philanthropic donations are well noted.

The Anchorage Daily News reported:

Rogoff declined to specify how much she has put into Alaska House, saying her personal finances are private. She said she never intended to carry the operation herself and that her plan was to raise around $1 million a year for its operations, "I thought fairly easily," from the money managers who have made enormous fees managing the assets of the Alaska Permanent Fund. But the same day Alaska House opened, Rogoff said, the investment services company Lehman Brothers went under, and the financial industry imploded. She said she's had a problem even locating the managers to solicit.

Rogoff said her "Plan B" had been grants from charitable foundations, but they are hurting badly.

Alaska House requested a $1.5 million federal appropriation from U.S. Sen. Lisa Murkowski in February, according to Murkowski's office. But Murkowski, who sits on the Appropriations committee, chose to not submit it to Congress.

Rogoff said she's also pursuing private partnerships for Alaska House, which has a staff of six. If Alaska House stays open it might be through a public-private effort or an annual state appropriation, she said.

Did you note the Erik Prince "private" defense in the midst of a sales call? When firm's buy each other, they go through a due diligence process. Surely, David Rubenstein shared this fact with his wife.

I'm sure Mrs. Rogoff's motivations are of the highest good. However, her strategies say much about how business is conducted in America today. The government is the till. When the wife of a billionaire reaches her financial limit, why would the taxpayer have the where with all to bail her nonprofit venture out?

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