PESP statement on consideration of Apollo’s Marc Rowan for Treasury Secretary

PESP Statement on Consideration of Apollo Global Management CEO Marc Rowan for Secretary of the Treasury

Earlier this week, news broke that Marc Rowan, CEO of private equity firm Apollo Global Management, is a top contender for the position of Secretary of the Treasury in the incoming Trump administration. Rowan’s consideration for Treasury Secretary raises concern given the extensive oversight the position has over the private equity industry and the high level of scrutiny already placed on his firm’s healthcare and retail investments.

In the healthcare sector, Rowan’s Apollo has an extensive hospital footprint, owning approximately 220 hospitals across 36 states through the companies Lifepoint Health and ScionHealth. Apollo’s bullish hospital acquisitions are the latest example in a trend of consolidation of healthcare providers, which has been steadily increasing over the past two decades and is expected to continue. A growing body of research shows that consolidation of healthcare providers tends to raise healthcare prices while failing to improve quality of care.

The hospital systems Apollo owns are highly indebted; have cut operating costs and charity care; and in some cases, have received poor quality rankings and attracted regulatory scrutiny. For instance, under Apollo’s ownership, Lifepoint and ScionHealth have taken on substantial debt and are now subject to high credit risk. Apollo also used a complex spinoff transaction to evade antitrust scrutiny in its acquisition of Kindred Healthcare, raising questions about potential anti-competitive outcomes.

Overall, there is rising scrutiny of private equity hospital ownership from both Republicans and Democrats, especially with regard to Apollo’s hospital ownership. The Senate Budget Committee recently launched a bipartisan investigation into private equity ownership of hospitals that specifically focuses on Apollo’s ownership of Lifepoint.

Apollo’s buyouts also impact hundreds of thousands of workers. Apollo was the only firm to receive a D grade on the 2023 Private Equity Labor Scorecard, a tool assessing the labor practices in the private equity industry and implications for workers and investors. At the time of the research, Apollo had over 280,000 employees at its largest portfolio companies. The firm’s low score was due in part to eleven bankruptcies over the past decade of companies in its portfolio, the highest number of bankruptcies of the firms scored.

In recent years, Apollo has taken companies employing tens of thousands of workers into bankruptcy including Caesars Entertainment, Linens ‘n Things, and Edge. Additionally, Apollo had a low number of unionized workers in its portfolio companies’ workforce, as well as a high number of unfair labor practice violations it settled.

Cardenas Markets, an Apollo portfolio company, has paid out millions to settle multiple class-action lawsuits alleging labor code violations such as pay and overtime violations. Workers at Cardenas Markets have testified to investors about their experience working at the grocery chain, alleging poor working conditions and retaliation against employees for engaging in union organizing. In August 2024, UFCW Local 1167 filed two unfair labor practice charges against Cardenas Markets, alleging coercive actions and retaliation against an employee for union-related activities.

“Choosing Marc Rowan for Treasury Secretary would be akin to choosing a fox to head up oversight of the hen-house,” said Matt Parr, Private Equity Stakeholder Project Communications Director. “Rowan’s supervision of hospital investments with poor quality ratings as well as concerning treatment of workers in his firm’s portfolio leaves much to be desired.

“Under Rowan’s leadership, Apollo’s investments have been scrutinized by lawmakers and regulators and introduced financial risks for the firm’s investors. Private equity investments have come with substantial hazards to investors and communities alike. A private equity billionaire with the keys to the government’s coffers is another risk the country can’t afford.”