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Report: Perdue’s Corrupt Record of “Smash-And-Grab Self-Help” As Corporate Executive

A revealing new Mother Jones deep dive into Senator David Perdue’s corporate career uncovered a damning pattern of “profiteering” from the companies he ran. While Senator Perdue now brags about his history of being a “job creator,” he conveniently omits key details like one of his businesses “bottoming out with executives getting paid and workers getting laid off.” It’s one troubling instance after another of “smash-and-grab self-help” that Perdue has continued in the Senate.

When he took over as CEO of Pillowtex, Perdue’s “key recommendation” was “wiping out most of Pillowtex’s U.S. jobs.” When his plan failed, Perdue “took everything he could get” in what was later labeled a “money grab” in a lawsuit while over 7,600 Pillowtex employees were laid off in “the single largest day of job loss in the history of North Carolina to that point.” During his tenure as CEO of Dollar General, Perdue made upwards of $50 million, sold the company below value, and was sued over allegations he “lined his own pockets as part of a leveraged buyout deal.” Once again, Perdue’s leadership led to “everyone but him and the other bosses [getting] less money than they deserved.” Perdue is already under fire for his prolific self-dealing in the Senate, and this latest investigation further exposes the ultra-wealthy corporate insider’s out-of-touch priorities.

“David Perdue is a crook who has always put himself first, not hardworking Americans,” said DSCC spokesperson Shea Necheles. “Throughout his tenure as a wealthy corporate executive and a senator, Perdue has made lining his own pockets his number one priority. Georgians deserve more than a Senator who abuses his position for shady profiteering and crooked behavior.”

Mother Jones: We Can’t Talk About Corruption in the Georgia Runoffs Without Talking About David Perdue and Dollar General

By Jacob Rosenberg

Key Points:

  • Back in 2002, after two years of bankruptcy proceedings, a North Carolina pillow manufacturer hired a Reebok executive named David Perdue to right the ship. For Pillowtex, Perdue’s experience with outsourcing jobs was part of the appeal. (“I spent most of my career doing that,” he admitted later in a deposition.)
  • And, with few options, at the end of 2002 Perdue indeed helped develop a four-year plan, according to a Charlotte Observer investigation, to fix the firm. It’s key recommendation: “wiping out most of Pillowtex’s U.S. jobs.”
  • After starting at the company in June, [Perdue] was a seemingly absent boss. An industry magazine joked about giving him directions to Pillowtex headquarters as a Christmas gift.
  • Things unraveled pretty quickly, and during his final months, [Perdue] took everything he could get: $700,000 to pay back taxes, $100,000 for relocation, $500,000 to stay on to potentially negotiate one final deal (that did not happen) to save Pillowtex. Over his nine month tenure, he earned a salary of $1.7 million dollars. A lawsuit later bluntly called his exit a “money grab.”
  • Meanwhile, 7,600-plus Pillowtex employees would soon be laid off as the company cratered to a second death. It led to the single largest day of job loss in the history of North Carolina to that point.
  • Perdue landed on his feet though. In December 2002, he interviewed to become the new CEO of Dollar General, taking over as chief executive the following year. Over the next four years there, Perdue would again make millions. And when he left, he would again be sued for possible profiteering on the way out.
  • You can see a pattern here. And while Perdue is now out of the business world, representing Georgia in the US Senate and fighting for his political life against Jon Ossoff, the continuance of smash-and-grab self-help is striking.
  • As a senator, Perdue has been investigated for the ways in which he has seemed to enrich both himself and his donors with, let’s call them, incredibly convenient and prescient stock trades, though he has repeatedly denied the charge of insider trading. It’s this corruption—involving both Perdue and fellow Republican Sen. Kelly Loeffler, who has been investigated for similar stock trades—that gives Democrats a crucial opening in a decisive Georgia runoff in early January.
  • Is this—more jobs at a national chain, less at mom and pops—really the American Dream “success story” of capitalism Perdue wants to brag about? He proudly notes Dollar General could never happen in a socialist country. And yet the chain is consistently listed as having the most employees on public benefits like food stamps.
  • Over all this time, of course, Perdue was still getting his—making upwards of $50 million dollars in total over his tenure, as the Intercept reported. In 2006 alone, Perdue got a $100,000 pay bump, stock options, and a contract extension to keep up the work; he earned over $3 million in salary (including equity) just that year.
  • But the good times didn’t last, and even on his exit from Dollar General there was controversy. And lots of cash. (As I said, a pattern.)
  • In March 2007, Perdue informed stockholders the company would be sold off to buyout private equity firm Kohlberg Kravis Roberts & Company, or KKR, for an eventual $7.3 billion. An analyst told the New York Times the deal was likely made because under Perdue the thrift store was “operating below its potential.” Despite Perdue’s big pay days in 2006, Dollar General actually had a bad year. Profits shrunk. The chain had to cut stores after aggressively expanding, announcing early in the year that it would close 400 locations.
  • Shareholders were upset about the sale. They alleged Perdue had knowledge the stores did in fact have more potential—but still sold the company below value because he didn’t see that the 2006 downward trend was a blip. As Courthouse News reported just last month, as soon as the deal was announced, Dollar General and Perdue were hit with a series of lawsuits from these shareholders.
  • But Perdue, yet again, came out just fine. When he left Dollar General in July 2007, he was paid, according to tax records obtained by the Atlanta Journal-Constitution, $42 million. Meanwhile, the AJC reported in 2014 that settling the lawsuits was costing the firm $42 million so they could deal with those “alleging Perdue lined his own pockets as part of a leveraged buyout deal, shortchanging shareholders.” In sum, Perdue’s bad company stewardship led to a bad sale and seemingly everyone but him and the other bosses got less money than they deserved, the stockholders say.
  • Midway through his tenure at Dollar General, there were multiple class-action lawsuits brought by managers for overtime pay under the Fair Labor Standards Act; they claimed the company had been misclassifying their labor. One suit was settled for $8.3 million, and others have continued past Perdue’s time at the company.
  • And below the manager level, these long-term cheap dollar store gigs for local workers—as documented by NBC News and the New Yorker—have proved terrible. There has been aggressive union-busting, the depression of wages, the purposeful pricing out of local stores that could offer alternative employment. Worse yet, violence has become de rigueur at dollar stores—as ProPublica’s Alec MacGillis has argued, this should not be viewed as inevitable: “Robberies and killings that have taken place at dollar store chains would not have necessarily happened elsewhere.” And as we reported earlier this year, store workers weren’t even provided PPE during the pandemic.
  • In the end it was and continues to be just the same—worker helped or not, Perdue has a bit more cash.

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