Since taking over Venelazzo, new owner Apollo Management has been behaving itself, with none of the shenanigans that characterized its ill-fated co-ownership of Caesars Entertainment. That, however, does not mean that Apollo has learned to straighten up and fly right. Thanks to a sweetheart deal carved out with the Donald Trump administration, Apollo is reaping megabucks even as it drives the Yellow trucking firm into bankruptcy, costing workers thousands of jobs. In 2020, Yellow received $700 million in government-funded largesse, in agreement structured in such a way that Apollo stood in senior position for bankruptcy repayment ahead of Uncle Sam. Apollo is throwing the scapegoated Teamsters Union under the bus for the bankruptcy, while also potentially leaving such clients as Home Depot, Walmart and a little boutique known as the Department of Defense high and dry.
The irony is that Yellow itself had not sought such a George deal as Apollo cooked up, one in which loan repayment finds the government in third position behind Leon Black‘s firm and sundry banks. With characteristically bad Apollo timing, the fund has bought a big chunk of Yellow just before Covid-19 struck. As The Lever reports, “the Trump administration could have leveraged this fact to negotiate a better position on the creditor list, but apparently chose not to do so.” Why not? A subsequent, $1 million donation from Apollo CEO Marc Rowan and his wife to the Trump reelection campaign may provide the pay-to-play answer.
Think that’s a stretch? Not only was Jared Kushner the recipient of a $184 million Apollo loan in 2017, Apollo co-founder Joshua Harris was a White House advisor on economic policy. One hand washes the other. Following the Kushner loan, Trump’s SEC dropped an investigation of Apollo, with SEC Chairman Jay Clayton taking a job as Apollo’s #1 independent director. Pretty cozy, huh? It gets better. Apollo co-founder and accused rapist Black is tight with Kushner as well. Nor did Apollo’s largesse stop at the White House. Then-Congressional Oversight Commission Chairman Sen. Pat Toomey (R) landed a job with Apollo after leaving the Senate in 2021.
The Yellow boondoggle was so obvious that even the Pentagon pointed it out, saying that the company was not “critical” to DoD operations. Still, the $700 million bailout comprised 95% of the CARES Act‘s national-security loans. And if Yellow was staggering under debt at the time, it was due to loans made well above prevailing interest rates … from Apollo. You might call such perverse fiscal policy private wreck-ity. Buying a 30% stake in Yellow, the Trump administration negotiated from a position of self-imposed weakness, resulting in the unfavorable loan terms described above. Yellow received low-interest loans from Uncle Sam even as it was on the hook to Apollo for high-interest ones. (It’s currently paying Apollo at 17%.)
“There’s no way to sugarcoat this: Treasury’s screwed on the Yellow loans,” Georgetown University law professor Adam Levitin opined. Forget about getting your money back. So far Yellow has paid down $230 million in principal and $66 million in interest. “Given the company’s long-term non-investment grade rating and previous close calls with bankruptcy over the years, it is not clear that an equity stake in [Yellow] will provide much, if any, compensation or protection to taxpayers,” warned Toomey’s oversight committee presciently, three years ago. Oh, and Apollo’s parting gift to John Q. Taxpayer? An unpaid, $50 million obligation to the Teamsters pension fund. Be warned, Venelazzo employees. Be very warned.
We’ve sat on the following item for the better part of a month, hoping the MSM would pick it up. No such luck. Seems that Station Casinos has been misbehaving again vis-a-vis those of its workforce who have the temerity to want to join a union. Some 2,261 Station workers have shown up on so-called MUD lists. The acronym stands for pro-(M)anagement, (U)nion or (D)on’t know. Pro-management employees were also euphemistically referred to as “Company positive.” The internal documents in which execs sift between those Covid-displaced employees that want to hire back and those they want to pass over in favor of external hires. Reacted two-decade Station veteran Norma Flores, “I have seen a document called ‘MUD List’ for Fiesta Henderson with my name on it. In the row with my name there is an X and a number which meant ‘Must GO.’ During the pandemic I went to three Station Casinos job fairs but was never rehired. Why?”
The MUD lists were obtained by Culinary Union as part of the discovery process in ongoing National Labor Relations Board litigation. If Station didn’t cover its tracks well enough it could be in hot water: “It is illegal for an employer to discriminate based on union preference when hiring workers,” accuses Culinary spokeswoman Bethany Khan. “For what legitimate reason did Station Casinos executives order supervisors to create MUD Lists and why would the company need to review their MUD Lists before rehiring employees if not to discriminate based on union preference?” Why indeed? Station has been dealing from the bottom of the deck throughout the unionization process, which is dragging into its umpteenth year of agony. The ultra-right-wing Fertitta Brothers would clearly sooner dynamite their casinos than unionize them. May they get their wish.
Jottings: The government of the Philippines continues to send mixed signals regarding its wholly owned casino business PAGCOR. The 45 casinos will be sold by late 2025, but not until after major, taxpayer-funded capex … Troubled Star Entertainment has received a de facto bailout from the New South Wales government, which nixed a planned tax on slot machines. The levy was thought to have put Star’s solvency at risk … Richmond Mayor LeVar Stoney‘s sleazy plan to gift-wrap a casino for Urban One and Churchill Downs is on hold. A Virginia judge has blocked a vote, citing the no-bid selection process.
