Categories

AOAV: all our reportsGuns

Opinion: I woke up to find my mortgage owned by the world’s top gun investor

cerberuslogos428The ping of the email broke my sleep. Bleary eyed, I reached over to my phone and read the subject line: “Northern Rock mortgages are latest gamble for US private equity firm Cerberus”. And with that I was wide-awake.

Overnight, it seemed I had become indebted to the world’s largest gun investment company.

The British government, the report read, was unloading a chunk of assets it had acquired in the financial crisis and selling £13bn of bank loans to the US private-equity firm Cerberus Capital Management – the mortgages (including mine) taken on by the UK government when it nationalised Northern Rock in 2008, after the lender suffered a bank run in the credit crisis.

Press releases tried to reassure original Northern Rock customers that the terms and conditions of their mortgages would be unaffected. But this wasn’t what concerned me.

What was worrying is that Cerberus is a sort of nemesis to me. I am a director of the charity Action on Armed Violence, which looks at the impact of small arms violence around the world. It’s no small task given that there are almost a billion guns on the planet and about half a million lives lost at the end of a barrel every year. I have also recently published a book – Gun Baby Gun – which charts my journey into the bloody world of firearm ownership. As I wrote, I tried to find a company that epitomised the shadowy profits of the world’s gun trade. And Cerberus did just that. In fact, they fitted the evil archetype almost too well.

For starters, they had a diabolic name. The CEO, Stephen Feinberg, reportedly named his now $20bn firm after the three-headed hound that guarded the gates of hell. He hoped his investors would be assured that one of the dog heads would always be awake, watching their investments. For me, it just reeked of sulphur.

The stench got worse when I found out that in April 2006, Cerberus had decided to get into the gun business in a big way. Their first major purchase was the semi-automatic rifle maker Bushmaster Firearms. Cerberus took them on for around $76m. The next year, in 2007, the New York-based asset company formed the Freedom Group, snapping up Remington and a slew of other armaments firms.

Today, that group describes itself as “one of the largest manufacturers in the world of firearms and ammunition”, with 3,200 employees and exports to some 60 countries. In 2013, their revenue was around $1.26bn on sales of 3.1bn rounds of ammunition and 1.8m guns.

In this way, to me at least, Cerberus is implicated in cold-blooded murder. Freedom Group weapons have been found in the hands of ISIS fighters in Syria and mass shooters in the US. They even made the Bushmaster rifle used by Adam Lanza in his attack on the Sandy Hook Elementary School that killed 26 children and adults in December 2012.

If this isn’t enough, as well as owning gun companies, Cerberus also owns a US healthcare company. It is called Steward Health and serves over 1 million patients in New England. This means that, with almost 46,000 cases of violent crime in New England in 2011, Cerberus almost certainly runs a business that has to treat gunshot victims. A truly vicious circle.

Certainly, criticism of Cerberus in the US has been intense. So bad, indeed, that after Sandy Hook, Feinberg claimed he was going to sell off his gun investments. It was a good publicity move but not actually something he ever got around to doing (as a sop to critics he allows investors to sell their stakes and move Remington out of their funds).

Wanting answers, I called Cerberus. The statement they gave said that Remington had been spun out of any of its formal funds. However, according to Freedom Group’s own filings, Cerberus continues to be the owner. It was a linguistic sleight of hand about a company whose financial reports are littered with words such as ‘amortization’ or ‘intangible assets’, without a nod to the death or destruction its ‘products’ can bring.

As for my own mortgage – I’ve been told to wait to find out more details, but there will be no moral “opt out” clause. And when I called up the UK Treasury, they just said it was “a good deal for taxpayers”.

It’s all deeply disconcerting. It literally brought home for me the fact that we live in a hyper-connected market where asset companies can simultaneously profit from gun sales and trauma units, and where overnight your home can be tied to a US behemoth.

It also highlighted another uncomfortable reality – the reality that international financial networks have become contaminated by the financial inflows of the global arms sector. The US gun industry has revenues of more than $13bn, but it’s the money men behind the gun men who really suck up the profits.

So, yes, I will move my mortgage. I do so because the bloody corporate profits from the sale of weapons of war have tainted my own investments and assets. And that, really, is what should keep us all awake at night.

This article first appeared in the Guardian.