Too Big to Fail

By:  John P. Gregg
Valley News

Here's something that will be of little comfort to the approximately 100 manufacturing workers at Thermal Dynamicsin West Lebanon who are being laid off as their jobs head south to Texas and Mexico.

The New York private-equity firm that is behind the job cuts --Irving Place Capital -- essentially is the rebranded version of Bear Stearns Merchant Banking.

BSMB, of course, was linked to the larger investment bank Bear Stearns which all but collapsed in 2008 and was purchased by JPMorgan Chase, aided by a $30 billion credit line from the Federal Reserve.

JPMorgan later spun out Irving Place Capital, which continues to be run by former Bear Stearns executives and is headquartered on Park Avenue.

Would it surprise you to learn that Doug Korn, a senior managing director at Irving Place who sits on the board of Thermadyne Holdings Corp., is a former George W. Bush "Pioneer" for his fundraising in 2004?

Or that Korn, also a former senior managing director at Bear Stearns, gave a total of $40,000 to John McCain andSarah Palin's 2008 campaigns?

Or that last year, Korn donated $4,800 to the U.S. Senate Victory Committee, which helped bankroll several Republican Senate candidates, including New Hampshire Republican Kelly Ayotte?

Stories by The New York Times about Wall Street's growing clout in politics last decade noted that Korn's Bear Stearns office featured photographs of himself with Bush and Vice President Dick Cheney. Also, Korn opened his Greenwich home in 2007 for a $2,300-a-head fundraiser for Rudy Giuliani.

In case you were wondering, that house is assessed by the town of Greenwich at $5.3 million. Korn -- who according to an assistant was traveling yesterday -- couldn't be reached for comment.

But Cornish resident Peter Burling, a member of the Democratic National Committee, said he was worried about Wall Street's dominance over Main Street companies.

"I don't know for a fact what is going on, but I worry that this sounds like a Wall Street-driven business transaction," said Burling, a Harvard-educated lawyer and former state lawmaker. "It has nothing to do with the company, it has nothing to do with the employees. It has everything to do with the hedge fund managers or investment bankers bumping up the price of the stock so they can sell the thing."

And Burling also asked a question workers at Thermal Dynamics, which traces its roots in the Upper Valley to 1957, probably are wondering about too: "When do we start using the American tax code to stop this kind of behavior?"