Thought Piece

On June 1, 20017, there was a Business Wire news release that caught my attention. Former U.S. EPA Chief Gina McCarthy has joined a private equity firm Pegasus Capital Advisors. As she put it, “I’m excited to put my public service and academic experience to use in the private sector, which is increasingly where most innovation is happening.” Before I get serious, I can’t help enjoying the thought of Ms. McCarthy being forced to deal with the 4,000 or so new EPA regulations she helped write.

Anyway, when Gina was a federal bureaucrat, she showed no faith in the private sector and its ability to innovate as her mountain of new regulations prove. As for her public service and academia experience, I sincerely doubt her past experiences have prepared her for the complexities of the private sector, which is where nothing is certain. As for the Clean Power Plan (CPP) and Waters of the United States (WOTUS), neither of these federal sets of regulation are likely to survive a Supreme Court Review.

Then, there is the naivete of saying …”the private sector, which is increasingly where most innovation is happening.” Truthfully, the public sector hasn’t ever innovated anything, including the atomic bomb and the moon launch: Both national projects were simply the light hand of federal regulation, an enormous amount of private innovations by individuals and groups with a national goal and a large federal defense budget. Federal agencies have never created innovative jobs in the private sector. They only create red tape bureaucracies, inside and outside government.

While I wish Gina well in her new career, I can’t help noticing that she continues to speak like an environmental alarmist politician on the BBC and Bloomberg News in the days after her appointment. Speaking publicly, she maintained that the newly elected administration is denying science, abdicating their public health responsibility and hurting the national economy, which is rhetoric that sounds more like the Sierra Club than a venture capitalist.

In quick sucession, there is no substantive evidence science is being denied, the previous EPA had its own serious problems with large toxic spills and lead poisoning in Flint, MI’s water, and finally, according to many international economic experts, America is likely to enjoy a significant economic benefit from the lower cost of energy and electricity, along with high paying new jobs created by further innovation.

That said, I can’t help wondering why Pegasus Capital hired Gina McCarthy in the first place. Is it because she knows how the federal grant programs work, or is it because of the many important federal agencies people she knows. In either case, counting on federal dollars or insider government connections doesn’t sound like a business model with much shelf life for private equity businesses.

After all, it has been individuals, private initiative, venture capital, private equity, and big business investments that have provided the capital formation necessary to help America remain the most innovative county in history. Steve

Environmental Leader Gina McCarthy Joins Pegasus Capital as Operating Advisor

June 01, 2017 09:00 AM Eastern Daylight Time

NEW YORK–(BUSINESS WIRE)–Former United States EPA Chief Gina McCarthy is joining private equity firm Pegasus Capital Advisors as an Operating Advisor, announced the firm today. “I’m excited to put my public service and academic experience to use in the private sector, which is increasingly where most innovation is happening.”

“Gina has significant experience and expertise that fits very well with the two sectors that Pegasus focuses on, namely Sustainability and Wellness,” said Pegasus Founding Partner and Chairman Craig Cogut. “Gina adds to our deep and accomplished team of operating and strategic advisors, a key factor in Pegasus’ success as one of the leading middle market private equity firms in these sectors.”

“Pegasus has by far the most talented group of operating and strategic advisors that I’m aware of working in the Sustainability and Wellness sectors, and I look forward to joining the team,” said McCarthy. “I’m excited to put my public service and academic experience to use in the private sector, which is increasingly where most innovation is happening.”

From 2013 – 2017, McCarthy served as Administrator of the U.S. Environmental Protection Agency (EPA) under President Obama. As Administrator, McCarthy was the nation’s leading advocate for common-sense strategies to protect public health and the environment. Willing to take bold action, Administrator McCarthy achieved notable success by finalizing the Clean Power Plan (CPP) which set the first national standards to reduce greenhouse gas emissions for fossil-fuel fired power plants. The CPP demonstrated the United States strong commitment to climate action, sparking broad international support for adoption of the Paris Climate Agreement. Under her leadership, EPA also finalized the Clean Water Rule to protect rivers and streams that 117 million Americans rely on for their source of drinking water.

Prior to her role as EPA Administrator, McCarthy held the position of Assistant Administrator in EPA’s Office of Air and Radiation. Previously, McCarthy served as the Commissioner of the Connecticut Department of Environmental Protection, where she began an initiative called “No Child Left Inside” to introduce families to the natural world by visiting state parks, and she helped design and implement the nine-state Regional Greenhouse Gas Initiative (RGGI), the nation’s first cap and trade program to reduce greenhouse gas emissions for power plants. She has also held senior positions in Massachusetts, serving five governors, including Deputy Secretary of the Office of Commonwealth Development and Undersecretary for Policy for the Executive Office of Environmental Affairs.

Since leaving the Obama Administration, McCarthy has been serving as a fellow at Harvard’s Kennedy School of Government’s Institute of Politics and as the Menschel Senior Leadership Fellow at Harvard’s T.H. Chan School of Public Health.

She earned a Bachelor of Arts in Social Anthropology from the University of Massachusetts at Boston and a joint Master of Science in Environmental Health Engineering, Planning and Policy from Tuft’s University.

A native of Massachusetts, McCarthy lives in the Greater Boston area with her husband and spends as much time as she can with her three children Daniel, Maggie, and Julie.

About Pegasus Capital Advisors, L.P.

Pegasus is a private equity firm founded and led by Craig Cogut. Since inception in 1996, Pegasus has invested across five private equity funds and currently manages approximately $1.9 billion in assets. The Firm’s principal investment theme is providing strategic growth capital to companies within the middle-market that are focused on global resource scarcity, particularly energy, waste, food, water as well as on health & wellness related companies. www.pcalp.com