A new report in Beacon digs into how Senator Collins’ biggest billionaire backer escalated his political giving following her key vote for the 2017 GOP tax bill. Schwarzman “funneled massive amounts of campaign cash” to Republicans in support of the tax giveaway in 2017, and after Collins voted for the bill, he hosted a Manhattan fundraiser for her campaign and poured $1.5 million into a super PAC dedicated solely to her reelection.

 

It’s not hard to see why Wall Street billionaires like Schwarzman think Collins is a good investment. In addition to her key vote to pass the tax bill, she voted to block an amendment to eliminate the carried interest loophole—a move that saved Schwarzman’s industry an estimated $2 billion per year. Since that vote, Senator Collins has become the top recipient of private equity contributions in the U.S. Senate.

 

Beacon: With $1.5 million contributed, Blackstone CEO is Collins’ biggest billionaire backer

 

By Alyce McFadden

October 28, 2020

 

Key Points:

 

  • Stephen Schwarzman, founder and CEO of private equity and investment firm The Blackstone Group, donated $1.5 million this year to a Political Action Committee (PAC) solely dedicated to Sen. Susan Collins’ reelection.

 

  • Schwarzman is among the richest individuals in the world and is a major donor to the Republican Party. He briefly chaired President Donald Trump’s Strategic and Policy Forum, a business policy council that fell apart after the president failed to condemn white supremacist violence in Charlottesville, Virginia in 2017.

 

  • Filings with the Federal Elections Commission show that Schwarzman made three donations of $500,000 to the 1820 PAC since February 2020, the most recent on Oct. 14.

 

  • The 1820 PAC is a conservative political action committee that launched in the wake of the 2017 GOP tax bill that granted tax breaks to corporations and the richest Americans. Named after the year Maine became the 23rd state, the PAC’s website lauds Collins for “bipartisanship” and “independence,” though it is funded by a number of the Republican Party’s biggest financiers, including Schwarzman.

 

  • Schwarzman is a friend and confidant of Trump and contributed $3 million to American First Action Inc, a Trump-aligned Super PAC. He has given more in political donations than any other individual in the banking or investment sector this year, beating out well-known names like George Soros and Michael Bloomberg.

 

  • But Schwarzman wasn’t always a power player in the world of Republican campaign finance. An analysis by the Center for Public Integrity named the New York-based billionaire one of a cohort of 25 Wall Street magnates who began donating more money, more often, to Republican candidates following the 2017 GOP tax bill.

 

  • Collins cast a pivotal vote in favor of the tax bill, which passed 51-48. During negotiations over the bill’s contents, Collins also helped kill an amendment that would have directly hiked taxes on private equity investors like Schwarzman. In December 2017, Collins voted against a motion that would have opened the bill to an amendment that would have closed the “carried interest” loophole. The loophole, which is still in place today, allows equity financiers like Schwarzman to avoid paying income tax on profits generated by investments in equity, considering them instead to be capital gains, which are taxed at a significantly lower rate.

 

  • Schwarzman’s first significant contribution to Collins came not long after that vote, in March, 2019, with a maximum donation of $5,600 to her candidate committee. The following October, Collins attended a high-dollar GOP fundraiser at Schwarzman’s $35 million Manhattan home. She was captured on film exiting his building.

 

  • Schwarzman’s own comments suggest the lengths he may be willing to go to fight tax increases on his business. During the Obama administration he drew criticism for using a dramatic analogy to describe his opposition to Democrats’ efforts to increase taxes on private equity firms like Blackstone.

 

  • “It’s a war,” Schwarzman said. “It’s like when Hitler invaded Poland in 1939.”

 

  • A report by international non-profit AIDS Healthcare Foundation called Schwarzman a “modern day robber baron.”

 

  • Nineteen Blackstone employees have joined their boss in boosting Collins’ re-election efforts this year.

 

  • The campaign finance watchdog also notes that Collins has received $603,667 from the private equity and investment sector this cycle, more than any other Senate candidate this cycle.

 

  • This sum does not include contributions to 1820 PAC, which isn’t supposed to coordinate with the Collins campaign but is solely dedicated to supporting her candidacy. October quarterly filings with the FEC show that executives at investment banks and private equity firms from Houston to Manhattan donated nearly $2 million to the PAC between July and the end of September.

 

  • The group is chaired by a corporate D.C. lobbyist and has spent $9.1 million so far this cycle. Much of that has gone to televised ads attacking Collins’ Democratic opponent, Sara Gideon.

 

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