Sinema took money from Wall Street while killing investors’ taxes – The Associated Press – en Español | Vette Leader

WASHINGTON (AP) — Sen. Kyrsten Sinema, the Arizona Democrat who single-handedly thwarted her party’s long-standing goal of levying taxes on wealthy investors, received nearly $1 million from private equity experts last year, Hedge fund managers and venture capitalists whose taxes would have increased under the plan.

For years, Democrats have promised to raise taxes on those investors who pay a significantly lower rate on their earnings than regular workers. But just as they neared that goal last week, Sinema forced a series of changes to her party’s $740 billion election-year spending package, eliminating a proposed carried-interest tax hike on private-equity earnings while also providing a $35 billion exemption that spares much of the industry from a separate tax hike that other big companies now have to pay.

The bill, with Sinema’s amendments intact, received final approval from Congress on Friday and is expected to be signed by President Joe Biden next week.

Sinema has long served the interests of private equity, hedge funds and venture capital, helping her raise at least $1.5 million in campaign funds since she was elected to the House of Representatives a decade ago. But the $983,000 she’s raised since last summer more than doubled what the industry gave her in all her previous years combined in Congress, according to an Associated Press report on campaign finance disclosure.

The donations, which make Sinema one of the industry’s biggest beneficiaries in Congress, are a reminder that high-level lobbying campaigns can have a dramatic impact on the way laws are made. They also stress some political risk for Sinema, whose uncompromising defense of the industry’s favorable tax treatment is seen by many in her party as unjustifiable.

“From their perspective, it’s a million dollars very well spent,” said Dean Baker, senior economist at the Center for Economic and Policy Research, a liberal-leaning think tank. “It’s pretty rare that you see such a direct return on your investment. So I guess I would congratulate them.”

Sinema’s office declined to make her available for an interview. Hannah Hurley, a Sinema spokeswoman, acknowledged that the senator shares some of the industry’s views on taxation, but dismissed any suggestion that the donations influenced her thinking.

“Senator Sinema makes every decision based on one criterion: what is best for Arizona,” Hurley said in a statement. “She has clearly and consistently stated for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness.”

The American Investment Council, a trade group that advocates for private equity, also defended its bid to dodge the tax rules.

“Our team has been working to ensure members of Congress on both sides of the aisle understand how private equity directly employs workers and supports small businesses in their communities,” said Drew Maloney, the organization’s CEO and president, in a statement.

Sinema’s defense of tax rules stands in stark contrast to her background as a Green Party activist and self-proclaimed “Prada socialist,” who once likened taking campaign funds to “bribery.” and later demanded that “big corporations and the rich pay their fair share” just before launching her first campaign for Congress in 2012.

She’s been far more generous since then, commending House of Representatives Private Equity in 2016 for providing “Billions of dollars each year to Main Street companies” and later doing an internship at a private’s boutique winery during the 2020 convention break -Equity moguls in Northern California.

The industry’s rapid contributions to Sinema date back to last summer. It was at this point that she made it clear for the first time that she would not support an increase in the carried-interest tax, as well as other corporate and corporate tax increases included in an earlier iteration of Biden’s agenda.

In just a two-week period in September alone, Sinema raised $47,100 in contributions from 16 senior officials at private equity firm Welsh, Carson, Anderson & Stowe, records show. Employees and executives at KKR, another private equity giant, donated $44,100 to Sinema over a two-month period in late 2021.

In some cases, the families of private equity managers have joined. David Belluck, a partner at Riverside Partners, donated a maximum of $5,800 to Sinema in one day in late June. Three of his college-age children did, too, and the family collectively donated $23,200, records show.

“I generally support centrist Democrats and their seat is important to retain a Democratic Senate majority,” Belluck said, adding that his family has known Sinema since she was elected to Congress. “You and I have never discussed private equity taxation.”

The industry donations coincide with a $26 million lobbying effort led by investment firm Blackstone that culminated in the Senate last weekend.

By the time the bill came up for debate during a marathon series of votes, Sinema had already forced Democrats to abandon their carried-interest tax hike.

“Senator Sinema said she would not vote for the bill … unless we take it out,” Senate Majority Leader Chuck Schumer told reporters last week. “We had no choice.”

But after private-equity lobbyists discovered a provision in the bill that would have subjected many of them to a separate 15% minimum tax, they urged changes to the law, according to emails from Sinema and other center Democrats, as well as four people with direct knowledge Matter asking for anonymity to discuss internal deliberations.

“Given the groundbreaking nature of this development, we need as many offices as possible that raise concerns about Leader Schumer’s office,” wrote Blackstone lobbyist Ryan McConaghy in an email obtained by the AP Saturday afternoon and suggested the wording for the amendment to the bill included. “Would you and your boss be willing to sound the alarm about this and express concerns to Schumer and his team?”

McConaghy did not respond to a request for comment.

Sinema worked with Republicans on an amendment that would scrap provisions raising corporate income taxes from the law, which a handful of vulnerable Democrats also voted in favor of.

“Since she has been in Congress, Kyrsten has consistently supported pro-growth policies that encourage job creation throughout Arizona. Her tax policy positions and her focus on growing Arizona’s economy and competitiveness have long been known and known,” said Hurley, spokeswoman for Sinema.

But many in her party disagree. They say the preferential treatment does little to boost the broader economy, arguing there is little convincing evidence that the tax benefits are being enjoyed beyond some of the wealthiest investors.

Some of Sinema’s donors are making their case.

Blackstone, a major source of campaign funds, owns large properties in Sinema’s home state of Arizona. The company was condemned in 2019 by United Nations experts who said Blackstone’s financial model was responsible for a “financialization of housing” that drove up rents and housing costs and “forced low- and increasingly middle-income people out of their homes.” have.

Records show that Blackstone employee executives and their family members have given Sinema $44,000 since 2018.

In a statement, Blackstone called the UN experts’ allegations “false and misleading” and said all staff contributions were “solely personal”. The company added that it was “incredibly proud of its investments in housing”.

Another major financier of financial services is Centerbridge Partners, a New York-based company that buys up the debt of troubled governments and companies, often using harsh tactics to extract value. Since 2017, Sinema has raised at least $29,000 from donors associated with the firm, including co-founder Mark Gallogly and his wife Elizabeth Strickler, records show.

In 2012, Centerbridge Partners bought Arizona-based restaurant chain PF Chang’s for around $1 billion. After loading the ailing company with $675 million in debt, they sold it to another private equity group in 2019, according to Bloomberg News. The company received a $10 million coronavirus relief loan to cover payroll but cut jobs and closed sites as it struggled with the pandemic.

Centerbridge Partners was also part of a syndicate of hedge funds that helped usher in an era of austerity in Puerto Rico after buying up billions of dollars of the island’s government’s $72 billion debt and filing legal action to collect it. A subsidiary of Centerbridge Partners was among a group of creditors who repeatedly sued a US Territory pension fund. In a 2016 lawsuit, the creditor group asked a judge to divert money from a Puerto Rican pension fund to collect.

A Centerbridge representative could not comment on Friday.

Liberal activists in Arizona plan to make Sinema’s reliance on donations from wealthy investors a campaign issue when she faces re-election in 2024.

“There are many approaches to winning, but there is no universe in which it would be politically wise to fight for favorable tax treatment for the richest people in the country,” said Emily Kirkland, a political adviser who works for progressive candidates . “It’s absolutely going to be a strong problem.”


Associated Press writer Josh Boak contributed to this report.

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