THE RICHMOND — No other governor of Virginia has gone into office with a more extensive history in the art of dealmaking than Glenn Youngkin, who, in his previous role as co-chief executive of the Carlyle Group, amassed a fortune via the acquisition and merger of businesses all over the world.
But as the Republican chief administrator of a purple state, Youngkin has struggled to translate his corporate expertise into political success — or even economic development success, as evidenced by the success of his much-touted effort to bring the Washington Wizards and Capitals to Alexandria, which was thwarted on Wednesday.
Despite the fact that Youngkin and his group of financial experts had successfully negotiated with the owner of the team, Ted Leonsis, to cut what the governor referred to as “the single largest economic development deal in the history of Virginia,” the governor was never able to achieve the same level of success with members of the General Assembly, who were required to give their approval for the $2 billion project.
An inexperienced politician who emerged on the scene in 2021 and garnered national recognition as a new face for the Republican Party is deprived of a huge opportunity to leave a lasting legacy as a result of the failure of the plan. Over the course of his first two years in office, Youngkin was able to take advantage of state coffers that were brimming with federal pandemic relief monies and a House of Delegates that was loyal to the Republican Party. However, as the governor’s four-year term draws to a close, he has noticed that his priorities have been slipping away and that Democrats have gained control of the legislature.
“At this point in time, he is a complete and utter failure,” said Robert Holsworth, a political analyst from Richmond who has spent decades researching the governors of Virginia. The political inexperience that he has displayed is quite remarkable.
However, Youngkin expressed his frustration with the Democratic-controlled state Senate for blocking the arena in an interview that took place on Thursday with The Washington Post. Youngkin defended his legacy as one of bipartisan accomplishments, such as passing tax cuts each of the previous two years and securing the only Lego manufacturing facility in the country.
it is necessary to produce. It wasn’t necessary for the Senate to conduct this,” he stated. Following the leadership of L. Louise Lucas, a Democrat from Portsmouth who serves as the chairwoman of the Finance and Appropriations Committee, the Senate was able to prevent a bill that would have allowed the arena and removed language from the state budget. Despite the fact that some Democrats in the House of Representatives initially voted in favor of the arena, the proposal was not well received in Alexandria, and it never managed to build a strong constituency in the General Assembly, where even some Republicans did not support it.
When Leonsis contacted Youngkin on Wednesday to announce that he was going to stay in the District instead, Youngkin expressed his disappointment but did not appear surprised by the news. As Youngkin put it, “I had a sneaking suspicion that he was anxious.” “There were options available to him, and listen, any business has options. Whenever I thought about it, I realized that if we didn’t say yes and put in the effort, he might go somewhere else.
The MPs had been told by Youngkin that if they did not approve the arena contract, it may be detrimental to the state’s renowned status as a favorable location for conducting business. The following is an excerpt from an interview that Leonsis gave to The Post on Wednesday: “My experience was that I had a better experience on the business side in D.C. than I just did in Virginia, which was really, really surprising and eye-opening.”
Those statements are hurtful in a state like Virginia, which boasts of being named by CNBC as the best state for business on two separate occasions (once under Youngkin and once under Ralph Northam, Youngkin’s Democratic predecessor). The previous year, it came in at number two.
In an interview, House Speaker Don L. Scott Jr., a Democrat from Portsmouth, stated that the previous governor, who was responsible for making the state number one for business for two consecutive years, was probably a lot more collaborative on these projects. In spite of the fact that Scott and Youngkin have built an improbable friendship by virtue of the fact that they participate in a weekly morning Bible study during the legislative session, Scott has criticized the governor for not doing enough to create support among lawmakers.
The statement that Scott made was as follows: “I believe that leadership is important, and style is important, and we did not have the leadership and style that is required to get a project like that done with so much at stake.”
When it came to Leonsis’s remark, Youngkin had a different perspective. According to what he said, “I believe he was openly acknowledging that the Senate did not carry out the work.” Youngkin stated that there was nothing that he would have done differently and that the evidence of the administration’s “good work” was the fact that the House of Delegates successfully passed arena legislation in the beginning.
Currently, Youngkin stated that it is up to Virginia to pick up the pieces. “I firmly believe that we have a lot of repair work to do as a state,” he added, vowing to continue making the case to businesses that they should be based here. “I also believe that we have a lot of other work to do.”
While the nation rebounded from the pandemic shutdowns, he presided over a resurgence of job creation. Additionally, with state income overflowing, Youngkin secured support from both parties for a total of $5 billion in tax cuts over the course of his first two years in office. Furthermore, he collaborated with members of the opposing party in order to improve financing for mental health services and teacher compensation.
An another Republican, Lieutenant Governor Winsome Earle-Sears, praised Youngkin’s legacy in a written statement that was released on Thursday. “For all this and more, the Governor can hold his head high,” Earle-Sears continued.
In spite of the fact that Youngkin has been successful in the private sector, he has been disappointingly unsuccessful in the domain of economic development throughout his tenure as governor. His efforts to convince the Biden administration to establish the new headquarters of the Federal Bureau of Investigation (FBI) in Virginia were unsuccessful, and Maryland emerged victorious, despite the fact that the FBI itself preferred a location in Springfield. And when Ford Motor Company indicated interest in constructing a huge battery plant in Southside Virginia to supply electric vehicles, Youngkin himself stopped the transaction, citing fear that the operation was a front for a Chinese manufacturer. Youngkin, in turn, cited the risk that the business was a front for a Chinese manufacturer.
Instead of being moved to Michigan, the plant was relocated to Virginia, which is a place that is in dire need of employment opportunities.However, Youngkin has declared that he has reached agreements for the relocation of headquarters for Boeing and Raytheon, as well as the large Lego plant in Chesterfield County that is valued at one billion dollars. In response to a question on whether he believes there is a distinction between public and private dealmaking, as well as whether he has gained any knowledge, Youngkin stated that “it requires a General Assembly that wants to work with us.”
He stated that it is his obligation to provide opportunities that are favorable. In addition, Youngkin stated that he is of the opinion that his administration worked “tirelessly” to educate lawmakers and interact with them over the arena.
In contrast, Holsworth, the political analyst, stated that he observed a substantial difference between the manner in which Youngkin approaches major undertakings and the manner in which prior governors approached them. According to him, when Republican George Allen wanted to impose new education standards in the 1990s and had a Democratic legislature, the governor appointed prominent Virginia educators to key administration roles and mounted a campaign around the state to build support from lawmakers and local officials. All of this took place before any votes were taken about the matter.
Mark R. Warner, a Democrat, traveled a great distance throughout the state and delivered countless PowerPoint presentations in the 2000s in an effort to convince business groups and a Republican legislature that Virginia needed to raise taxes in order to maintain its high bond rating.
According to Holsworth, Youngkin did not make any such extensive efforts to clear the way for the arena or for a projected change of the state tax system that the governor implemented in December during the same time period. After the General Assembly closed on March 9, Youngkin instead began touring the state in order to campaign against what he refers to as the “backward budget” that was passed by lawmakers and to denounce the Senate for not backing the arena. He did this by appealing to handpicked Republican crowds. On the other hand, he is putting a number of Democratic initiatives on hold, including the ones that he vetoed on Thursday, which included proposals that would have increased the minimum wage and created a legal cannabis market. These are two of the most important concerns for Democrats.
When asked about it, Holsworth stated, “It’s just not a very keen understanding of the political dynamics of Virginia.”
It is now necessary for Youngkin to recover from the defeat of the arena and locate areas of agreement with the legislators who were responsible for its defeat in order to ensure that a state spending plan is approved before the end of the fiscal year on June 30. Otherwise, Virginia would experience a shutdown of the government on a scale never seen before.
Despite the fact that he has never regarded the arena to be a bargaining chip for the budget, Youngkin has expressed his optimism that he will be able to collaborate with Democratic leaders. According to what he said, “I need them to engage with me once again, but there is a budget that is common sense that we can deliver together that drives Virginia forward.”
He went on to say that for as long as that budget does not include any tax increases.
That, according to the leaders of the Democratic Party, is not a viable option.
Because Youngkin had such a large amount of wealth, he was able to afford to forego more than one hundred million dollars in unvested stock options when he left from his position as co-chief executive officer of the Carlyle Group exactly one year ago. With a fortune that has now surpassed $300 million, he is utilizing those riches to assist in financing his campaign for governor. He is taking advantage of the early and frequent advertising that is being shown on the airwaves.
Youngkin’s method of accumulating riches is a topic that is not commonly known. Youngkin mentions joining Carlyle in 1995, when it was a “small start-up,” and observes that by the time he became co-CEO, the company had become a global economic behemoth. This commentary is included in an advertisement for a campaign.
Carlyle is one of the most important private equity firms in the world, and it occupies the center of the power structure in Washington while having just a few dozen employees in the year that he joined the company. However, this description obscures the unique nature of Carlyle, which is that it is one of the most influential firms in the world. By 1995, Carlyle had been in operation for eight years, claimed a former defense secretary as chairman, and had advised a member of the Saudi royal family on a $500 million investment in Citigroup. This was a far cry from the cliché of a few entrepreneurs working in a garage.
Youngkin's successful company career is both a political asset and a disadvantage for a candidate with no public office experience.
The very nature of private equity, which entails the purchase and sale of businesses, has occasionally been a source of frustration between politicians. In the course of his campaigns for president in 2008 and 2012, Republican Mitt Romney was subjected to intense criticism about his track record in private equity at the Boston firm Bain Capital. Concerns were made regarding the number of jobs that were eliminated or sent overseas as a result of the business’s investments.
The character of Carlyle is another one to consider.
Quentin Kidd, a political scientist at Christopher Newport University, stated that Republican voters have a sentimental attachment to prosperous businessmen. However, he went on to say that ever since Donald Trump was elected president, the Republican base has also been captivated by anti-establishment outsiders.
One of the things that made Trump appealing to Republican supporters was the fact that he had all of the success that they considered attractive in a businessman, but it was not success that was accepted by the establishment. In point of fact, he expressed his disapproval of the establishment. On the other hand, Youngkin is the complete antithesis of that,” Kidd explained.
In general, Youngkin was praised as a capable and collaborative manager by a few former Carlyle officials who were interviewed for this piece. All of these individuals talked on the condition of anonymity in order to discuss the tightly regulated corporation.
However, a number of individuals have expressed their dissatisfaction with the fact that a person whom they considered to be a corporate leader with a serious mindset has catered to the pro-Trump faction of the Republican Party. For example, they have been reluctant to acknowledge that President Biden was properly elected.
The approach that Youngkin used during the campaign, which consisted of being hesitant to roll out policy recommendations and fast to back the controversial former president, was aggravating, according to a former executive at Carlyle. “I wouldn’t have done that,” said the executive stated. It’s hard for me to even begin to comprehend what Glenn’s plan is. However, politics is a shady industry, and you have to deal with a large number of voters who are ruled by their emotions.
In response to a question about whether or not the same enthusiasm extended to Youngkin’s political activities, a former executive at Carlyle lauded Youngkin’s corporate achievements but declined to comment either way.
This individual stated, “I do not have any insight into any of that,” indicating that they would not explore the subject further.
Another individual who had previously worked with Carlyle made the observation that “you don’t see a lot of Carlyle people coming out and supporting him.”
In response to this article’s request for an interview with Youngkin, his campaign refuses to make him publicly available. A representative from Carlyle declined to comment on the matter.
The wealthy and powerful
Prior to entering the corporate sector, Youngkin, who is now 54 years old and played basketball at Rice University in Houston, had undergraduate degrees in mechanical engineering and management studies. After earning his Master of Business Administration from Harvard, he served as an analyst at McKinsey & Company until joining Carlyle in 1995.
Legal, political, and business circles in Washington, DC were the originators of the company, which had been established in 1987. Within a short period of time, three individuals came together to establish its brain trust. These individuals were David Rubenstein, a former official in the Carter administration, Daniel D’Aniello, a former executive at Marriott, and William E. Conway Jr., a former executive at MCI Communications.
The state capital of Washington was a major zero on the national financial scene at that period. On the other hand, Rubenstein had a realization that ended up characterizing Carlyle: wealthy and powerful individuals have a tendency to socialize with one another. If he was able to make that arrangement, there would be chances to make agreements.
Therefore, they appointed Frank Carlucci, a former defense secretary, to the position of chairman, marking the beginning of a long series of A-list politicians who have either served as consultants or executives for Carlyle. Former President George H.W. Bush, former Prime Minister John Major of the United Kingdom, and former Secretary of State James Baker III were all major heavyweights who played roles in those early years, creating connections and making fortunes.
In the beginning, the company’s primary focus was on purchasing aerospace and defense industries, managing them for a period of time, and then selling them off.
Carlyle became so closely associated with the ruling class, and in especially with links in the Middle East, that it became the subject of conspiracy theories on a regular basis. Its reputation was not helped by the fact that a half brother of Osama bin Laden was attending a Carlyle conference in a hotel in Washington, DC, at the time that the twin towers collapsed on September 11, 2001.
