Who lobbies for carried interest backers- POLITICO

With Daniel Lippman

WHO LOBBIES FOR CARRIED INTEREST BACKERS: If you have somehow been living under a rock for the past 72 hours, the Senate on Sunday successfully passed its landmark climate, health care and tax measure after making last minute changes to secure Sen. Kyrsten Sinema’s (D-Ariz.) must-have vote and following an overnight amendment process that made additional tweaks to the bill.

— Though the business community is still staunchly opposed to the package because of its tax changes and drug pricing provisions, one group that emerged from the weekend likely breathing a sigh of relief is supporters of the so-called carried interest loophole long championed by private equity firms and hedge funds.

— After Sinema required language narrowing that tax break be thrown out in exchange for her support, she and six other Democratic senators voted with Republicans to hand private equity another win, by softening how the Democrats’ 15 percent minimum tax on big corporations would affect the sector. (The Washington Post’s Jeff Stein has a great behind-the-scenes rundown on this.)

— The carried interest tax rate has long been a target of Democrats and Republicans alike in Washington, but top officials in both current administration and the Trump administration have bemoaned the political power that hedge funds, private equity and venture capital wield in Washington, which includes a small army of registered lobbyists employed by major players in the private equity, hedge fund, venture capital and real estate sectors.

— Private equity’s main lobbying group, the American Investment Council, retains half a dozen outside lobbying firms: Capitol Tax Partners, Subject Matter, Rich Feuer Anderson, Duberstein Group, Ogilvy Government Relations and Cypress Advocacy. Out of the 30 in-house and outside lobbyists the trade group employs, according to OpenSecrets, 24 — or 80 percent — have formerly held government positions. That doesn’t include AIC officials not registered to lobby, like the group’s President and CEO Drew Maloney, a former Treasury official.

— Some private equity firms also have a deep bench of hired guns in Washington like Blackstone, which paid nearly $1 million to nine outside firms last quarter, and whose lobbying roster includes former aides to Senate Majority Leader Chuck Schumer and House Minority Leader Kevin McCarthy.

— Another private equity giant, the Carlyle Group, reported spending much less on lobbying last quarter — just $280,000. The company retains just two outside lobbying firms, Miller & Chevalier and Polaris Government Relations, in addition to two in-house lobbyists. Another private equity player, Ares Management, retains a team of lobbyists from K Street powerhouse Brownstein Hyatt Farber Schreck that includes a recent Senate GOP tax counsel.

— The Managed Funds Association, which represents the hedge fund industry in Washington, reported its highest ever lobbying expenditures in 2021, when Democrats began threatening to take aim at carried interest. The trade group retains Arnold & Porter Kaye Scholer, Tiber Creek Group, RMP Strategies, Blue Ridge Law & Policy, Alpine Group Partners, Porterfield, Fettig & Sears, Federal Hall Policy Advisors and T Cap Solutions, and last quarter alone reported spending almost $1.4 million on lobbying.

— The National Venture Capital Association represents another set of stakeholders in the carried interest debate, and though it parted ways with two of its four outside lobbying firms in recent months, the group has still reported spending more than $1.4 million on lobbying so far this year. It continues to retain the prominent tax lobbying firm Capitol Tax Partners and Mehlman Castagnetti Rosen & Thomas. More than 80 percent of the group’s lobbyists this year have held prior government jobs, according to OpenSecrets.

— More than a dozen other entities have reported lobbying on carried interest since the beginning of 2021, when proposals for the bill passed this weekend first began, including downtown heavyweights like the National Association of Realtors and the U.S. Chamber of Commerce. Others who have lobbied on carried interest include the National Multifamily Housing Council, the Real Estate Roundtable, the Mortgage Bankers Association, TechNet, the National Apartment Association and the Angel Capital Association, in addition to labor unions and advocacy groups pushing for the elimination of the loophole.

Good afternoon and welcome to PI. It may be recess, but we’re still around — let us know what’s going on out there: [email protected]. And be sure to follow me on Twitter: @caitlinoprysko.

WHY AMAZON IS LOBBYING ON BABY FORMULA: Amazon is deploying its lobbying power on America’s baby formula crisis, seeing an opportunity to extend its reach into a $2 billion-a-year market,” POLITICO’s Meredith Lee and Marcia Brown report.

— “Between April and June, the company’s senior officials and in-house lobbyists held discussions about infant formula with lawmakers on Capitol Hill and officials from the federal government — the first time it’s reported doing so, according to its most recent federal lobbying report.”

— “Amazon lobbyists also discussed online purchasing restrictions for federal nutrition benefits — which are used to buy at least half of the country’s formula and billions of dollars worth of other groceries — with officials across the White House, FDA and other parts of the federal government, people familiar with those conversations say. Monument Advocacy, an outside firm representing Amazon, reported lobbying policymakers in the House, Senate and USDA on federal nutrition programs, as well.”

— “Amazon’s foray into formula lobbying shows how the e-commerce giant stands to benefit from the industry shake-up that the ongoing formula shortages have triggered, particularly the potential to draw a larger share of the billions in federal dollars that go to programs designed to help close to 50 million lower-income Americans.”

— “That could allow Amazon to compete more directly with Walmart.com, its biggest e-commerce rival. The two companies have spent years jockeying for more access to the federal nutrition programs, especially since Amazon acquired grocery store chain Whole Foods in 2017.” Still, the company “must confront deepening distrust in Washington, where there is widespread concern about its alleged anti-competitive behaviors, and among food safety experts, who cite the challenges of policing third-party vendors on its platform.”

RECONCILIATION BILL INCLUDES WINS FOR MANCHIN DONORS: Sen.Joe Manchin’s (D-W.Va.) “recent surprise agreement to back the Biden administration’s historic climate legislation came about in part because the senator was promised something in return: not only support for the [Mountain Valley Pipeline] in his home state, but also expedited approval for pipelines and other infrastructure nationwide, as part of a wider set of concessions to fossil fuels,” The New York Times’ Hiroko Tabuchi reports. “It was a big win for a pipeline industry that, in recent years, has quietly become one of Mr. Manchin’s biggest financial supporters.”

— “Natural gas pipeline companies have dramatically increased their contributions to Mr. Manchin, from just $20,000 in 2020 to more than $331,000 so far this election cycle, according to campaign finance disclosures filed with the Federal Election Commission and tallied by the Center for Responsive Politics.”

— Manchin, who chairs the Senate Energy Committee, “has been by far Congress’s largest recipient of money from natural gas pipeline companies this cycle, raising three times as much from the industry than any other lawmaker.”

— “NextEra Energy, a utility giant and stakeholder in the Mountain Valley Pipeline, is a top donor to both” Manchin and Schumer, “who negotiated the pipeline side deal with Mr. Manchin. Mr. Schumer has received more than $281,000 from NextEra this election cycle, the data shows. Equitrans Midstream, which owns the largest stake in the pipeline, has given more than $10,000 to Mr. Manchin. The pipeline and its owners have also spent heavily to lobby Congress.”

ANNALS OF DARK MONEY: “The social media feeds of progressive voters have been bombarded by a series of ads this past week telling them to urge their Democratic representatives to vote against the Inflation Reduction Act,” Protocol’s Lisa Martine Jenkins reports.

— “The ads aren’t from the Sunrise Movement or other progressive climate stalwarts, though. Instead, they’re being pushed by United for Clean Power, a murky dark money operation that appears to have connections with Republican operatives. … The blitz started on the day Sen. Joe Manchin and Majority Leader Chuck Schumer announced that they had arrived at a deal for $369 billion in climate investments as part of a reconciliation bill.”

— “But the votes in the House aren’t quite tied up yet, and the campaign — which newsletter FWIW first identified — has been using a swath of strategies that include social media advertising, direct text messages to voters and even a sponsorship of the POLITICO New York newsletter to try to chip away support from the left.”

WIRELESS INDUSTRY SCORED A LAST MINUTE CHANGE: “Wireless trade group CTIA lauded Democratic lawmakers Saturday for newly tweaked language in their final reconciliation text that specifically addresses how wireless spectrum is taxed,” POLITICO’s John Hendel reports.

— “CTIA, which includes carriers like AT&T and Verizon, had lobbied Congress for months about their concern with Democrats’ proposed 15 percent corporate minimum tax on so-called ‘book income,’ which would affect giant corporations making over $1 billion in profit.”

— “Wireless carriers argued this could unwittingly add a substantial tax burden to the purchase of wireless spectrum due to the peculiarities of how those assets are taxed. Senate Republicans had also begun attacking Democratsfor the provision last week, warning of ‘a tax on wireless innovation.’”

— “In the final text of the deal released Saturday, Democrats included a special section called ‘Qualified Spectrum Purchases’ that addressed the tax treatment of spectrum in ways resolving wireless industry anxieties.”

CORRECTION: Friday’s edition of Influence misstated the entity that hired Brownstein Hyatt Farber Schreck. It is a nonprofit organization overseeing Tree of Life‘s redevelopment. PI regrets the error.

Hillary Holley will be executive director of Care in Action. She previously served as director of organizing and as a strategic adviser at the Stacey Abrams group Fair Fight Action.

Jessica Herron is now staff assistant for Sen. Roger Wicker (R-Miss.). She most recently was a graduate associate, internship coordinator and government relations assistant for IDEMIA North America.

Max Bodach is now operations manager at the Lincoln Network. He previously was a senior associate at Keybridge Communications.

Ian Futerfas is now scheduling assistant for Sen. Bob Casey (D-Pa.). He most recently was postgraduate fellow and assistant to the executive director of CHILD USAdvocacy.

Benjamin Downing is now vice president of public affairs at VC firm The Engine. He ran for Massachusetts governor last year and is a former Massachusetts state senator.

Stephen Hostelley is now director of government relations at Ally. He most recently was deputy chief of staff and legislative director for Rep. Anthony Gonzalez (R-Ohio).

Beasley Kelly Victory Fund (Rep. Cheri Beasley, Sen. Mark Kelly, North Carolina Democratic Party – Federal, Arizona Democratic Party)
Don Davis Victory Fund (Don Davis for NC, North Carolina Democratic Party – Federal)
Rosen Demings Victory Fund (Sen. Jacky Rosen, Rep. Val Demings)
Thune Young Victory (Sens. John Thune, Todd Young, Commonsense. Conservative Values PAC, All Hands Political Action Committee)

New Coalition PAC (Super PAC)
New York Progressive, Inc. (Super PAC)

Birch, Horton, Bittner & Cherot: Atn International
Keefe Singiser Partners, Fka Keefe Strategies LLC: Omidyar Network Services LLC
Marshall Brachman: Academic Programs International, LLC
Subject Matter (Fka Elmendorf Ryan): Bladder Cancer Advocacy Network
Tenpenny Law LLC: The City Of Garden City Kansas
The Birch Group LLC: Meridian Energy Group Inc
The Russell Group, Inc.: National Rural Electric Cooperative Association


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