ESOP Champion Russell Long Dies

Russell Long, the Senator who made ESOPs possible, died on May 9. Long was the son of Huey Long, the former governor of and senator from Louisiana. He was elected to the Senate at 29 and rose to the chairmanship of the Senate Finance Committee. Often a controversial figure seen by some as too tied into oil interests, Long also maintained what was, to some, a surprisingly populist streak. In 1973, he met Louis Kelso, who created what we now know as ESOPs. Kelso had been trying for many years to find political support for this idea. Long saw the concept as a perfect way to blend the populist ideas of his legendary father with his generally more pro-business position on taxes. "The problem with capitalism," Long often said, "is that there are not enough capitalists." The ESOP idea was to provide owners of capital with tax incentives to use their collateral in businesses they owned to back loans to trusts that could acquire stock for their employees. That way, Long said, there would be no redistribution of wealth; instead, there would be new opportunities for more people to have a chance at ownership themselves. From 1974 until he retired in 1986, Long shepherded new legislation on ESOPs through virtually every succeeding Congress.

Long's commitment to employee ownership was entirely philosophical; there was noting for him to gain politically from the considerable time, skill, and political capital he contributed to ESOPs. As one of the most powerful members of Congress, Long was able to move ESOPs forward in a way almost no member of that body could. It would be another eleven years after he left before new pro-ESOP legislation passed. Without Russell Long, it is doubtful employee ownership would ever have become what it is today.