“You’re either at the Table or On the Table. “
Old Wall St. adage
Dante and Virgil encounter Cerberus at the Gates of Hell”
by Christopher ´Topher´ Allen Shepard
Cerberus Capital Management ~ The Big Dog that Hunts and Preys
by Jamie Lee
Cerberus is named after the mythological three-headed dog that guarded the gates of Hades aka the (Bill?) Gates of Hell.
With a serpent’s tail, a mane of snakes, and a lion’s claws, it guards the entrance of Hell to prevent those who entered from ever escaping. Cerberus is featured in many works of ancient Greek and Roman literature and in works of both ancient and modern art and architecture.
This week, Cerberus Capital Management announced it was buying Safeway Supermarkets for $9 billion, just as California is going into a never before experienced historical water and food crisis. Their timing is incredible in that after this acquisition they will have over doubled control of our major supermarkets in California and beyond.
Last year, a Cerberus-led investor group spent $3.3 billion in cash and debt assumption buying 887 stores from Supervalu Inc., with the names Albertsons, Acme, Jewel-Osco, Shaw’s and StarMarket. Cerberus already owned some Albertsons stores, which it bought in 2006. In the fall, Albertsons said it would buy 50 stores operated by Texan chain United Supermarkets.
In the U.S., More than 19% of market share in the U.S. grocery industry belongs to Kroger, whose chains include Ralphs and Food 4 Less, according to Euromonitor International. Safeway, which has 1,335 stores, follows with 9.1%. Albertsons and its 1,075 stores closing out the top five with a 3.8% share. Kroger and Safeway also have mutual agreements to accept each others “club cards”. (Source).
On a relevant sidebar, Safeway this week settled a lawsuit brought about by 9 Northern California counties and had to pay out $2.5 million because Safeway charged consumers more than the lowest advertised prices, misrepresented the weights of Safeway brand products and implied that some produce was “locally grown” when it had come from out of the country.
The complaint also alleged that Safeway failed to abide by a 2008 injunction requiring it to minimize price discrepancies by offering customers free items or $5 gift cards when pricing flaws occurred. In its statement, Safeway said it would “take additional steps to make our scan guarantee policy more visible to our customers and well-understood by our employees”. (Source)
Additionally, last weeks news that the Federal water agency that doles out water from the Sierras to 3300 water suppliers throughout California had this to say to all residents and commercial farmers of California: “We cannot give what we don’t have. It’ just not there.”
The Federal government is setting precedent by breaking a 54-year agreement with the state to provide water to all of California from mountain runoff. The critical problem, according to the head of the Federal Water Agency is, “It’s just not there”, meaning the snowpack from the Sierra’s that allows the Feds to allot the water to the state for the coming year ahead.
The state’s worst drought in decades has left its reservoirs half-naked, if not skeletal. Officials say 17 communities could run out of drinking water this summer; some are considering mandatory rationing; and 500,000 acres in the state may be left fallow. For the first time in its 54-year history, the California State Water Project—the world’s biggest plumbing network and the way millions of state residents get hundreds of billions of gallons of water—is essentially shutting down.
In 2012 the project moved 815 billion gallons of fresh water from Northern California’s rivers to 25 million people and a million acres of farmland in the arid central and southern parts of the state. Last year, the driest on record, the system delivered 490 billion gallons, down 40 percent. This year, the planned water distribution is zero. Two-thirds of California’s 38 million people and most of its $45 billion farm products depend on snowmelt from the Sierra Nevada and Rocky Mountain watersheds, imported via thousands of miles of pipelines, canals, and the Colorado River.
Although snowfall is up this winter in the Rockies, precipitation in both mountain watersheds has been going down over the last 14 years, raising scary questions for the nation’s most populous state.
So who is this Cerberus Capital Management with its impeccable timing to acquire critical food distribution sources just as food prices in the U.S. are about to soar due to America’s breadbasket being empty come mid-summertime?
Let’s take a deeper look at the how dots that connect.
Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $60 billion — more than either Amazon, Cisco, McDonalds or Coca-Cola. With just 200 of its own employees, Cerberus owns or has pieces of over 50 companies with more than 175,000 employees.
Mr. Dan Qualye, former VP of the United States and who served with former President George H. W. Bush Sr., joined Cerberus in 1999 and is chairman of the company’s Global Investments Division. Former Treasury Secretary, John Snow is also on the Cerberus payroll.
Behind the scenes at Cerberus is the secretive Co-Founder CEO, Stephen A. Feinberg. The low profile Feinberg moves in rarefied circles. Defense Secretary Donald H. Rumsfeld was an investor in 2001 in his fund, according to government ethics disclosures. Hedge-fund legend Michael Steinhardt is a shareholder and director in Cerberus’ lending arm, Ableco LLC. Michael Dell’s private-investment firm has joined with Cerberus and home-builder Lennar Corp. to develop upscale residential communities. His roster of investors also includes public pension funds such as TIAA-CREF and the largest pension fund in the country, California State Teachers’ Retirement System.
Yet Mr. Feinberg hasn’t been interviewed and he hasn’t been photographed. Feinberg has been described as “secretive” in the New York Times. In 2007, Feinberg told Cerberus shareholders, “If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person. We will kill him. The jail sentence will be worth it.”
Cerebus Capital Management owns Dyncorp, the private data collection agency for the alphabet spy agencies. (CIA, DHS, NSA, FBI, DEA, etc.). Cerberus bought Dynacorp for $1.5 billion in 2006. (Source)
DynCorp is one of the three preeminent private mercenary corporations in the world, and is the dominant entity for training security forces in the Middle East. Herbert “Pug” Winokur a lead investor and creator of DynCorp—he was CEO from 1987 to 1991—and previously chaired the finance committee at Enron, where he somehow escaped the scrutiny of federal prosecutors.
DynCorp is ubiquitous; it manages the congressional telephone system and does the computerized bookkeeping for a dozen federal agencies, including DOD and HUD, and as such has presided over the loss (or theft) of trillions of dollars. DynCorp has a contract to manage the police and court systems in the US-occupied Iraq. Arthur Anderson is the financial auditor of DynCorp, the same auditor which handled Enron’s books. The HUD Inspector General testified before Congress that HUD had lost $17 billion in 1998 and $59 billion in 1999.
In September, 2001 it was disclosed that the Pentagon could not account for $1.1 trillion for the fiscal year 2000. In a separate loss, it later became public that the DOD could not account for $2.3 trillion dollars, amounting to over 25% of its assets. The DOD budget is $480 billion a year, more than all the non-American military spending in the world combined, yet they managed to lose trillions.
The financial data processing for the US government accounting systems is performed by DynCorp and Lockheed-Martin. DynCorp was given a $322 million contract to develop, produce, test, and store FDA licensed vaccines for the DOD. DynCorp owns the former Blackwater renamed Xe, renamed Academi, the company that employs the majority of the tens of thousands of security contractors in Iraq. (Source)
Dynacorp has also been brought up in front of Congress, along with Dick Cheney’s old company, Haliburton, for their alleged roles in international sex slave rings. Continue reading Cerberus Capital Management; The Big Dog that Hunts and Preys