An internal probe and preliminary criminal investigation, regarding alleged misappropriation of funds, has resulted in a lifetime ban against Tyrone Freeman, now the former head of United Long-Term Care Workers Union. Freeman, who had ostensibly served the interests of approximately 190,000 union members, who each earn an average wage of about $9 per hour, has also been ordered to repay more than $1 million of allegedly misdirected funds.

Some of the indicated misappropriations involved Freeman's directing of questionable payments to the businesses of both his spouse and her mother, among others. Additionally, some of the transactions which are being investigated involve payments which Freeman had allegedly directed to himself.

The Los Angeles Times, which originally broke this story in August, outlines the results of an internal probe which has been conducted by Service Employees International Union (SEIU). LA Times reports: "The SEIU's inquiry included hearings conducted by former California Supreme Court Justice Joseph Grodin. His report to (SEIU President, Andy Stern) stated that Freeman had engaged in a pattern of financial malpractice and self-dealing."

In one of the least convincing editorials in recent memory -- no small accomplishment -- Service Employees International Union international president Andy Stern argues that "short-term capital infusions from private-equity funds will only make the banking crisis worse, by encouraging risky behavior and abusive banking practices."

He's so wrong. Risky behavior is encouraged by compensation systems that reward returns regardless of risk, supine directors lacking true independence, and an ownership structure so diffuse that there is no one to enforce accountability.

A private equity fund with a large equity stake and no ulterior motives -- they make money from increased shareholder value, not fees and bonuses -- who paid cash for their shares is the best thing for shareholders. The one valid point that Stern makes is this: "It's hard to imagine private-equity funds resisting the urge to double down on the tactics banks have used to drive profits in recent years -- unfair lending practices, higher fees, and exorbitant interest rates on credit cards and other consumer products."

That's probably true -- private equity funds may push public companies to improve their profitability, but that's their job. Consumer protection is the domain of regulators, and publicly-traded banks have a responsibility to increase their profits as much as possible within the confines of the law.

We shouldn't blame private equity for lax regulation.