The private-equity industry is pouring millions of dollars into the 2020 elections, with some donors hoping to prevent full Democratic control of Capitol Hill and the potential for tighter oversight of their sector.
Employees of private-equity firms and other investment firms, not including hedge funds, spent $91.7m on 2020 congressional races and presidential campaigns through July 21, according to the Center for Responsive Politics, a nonprofit group that researches money in politics.
With a spending surge in the coming months, the industry could approach the record of almost $118m that it spent on the 2016 elections.
The private-equity industry has in the past several elections split its spending fairly evenly between the two major parties, a trend that has held this year. Democrats have received 54% of the roughly $47m contributed to candidates and party committees by private-equity industry employees. The industry has also given more than $44m to outside groups, which isn’t reflected in the party breakdown.
Despite the Democratic tilt, many in the industry have thrown their support behind vulnerable Republican senators, hoping to keep Democrats from controlling both chambers of Congress.
The erosion of popular support for President Trump since the coronavirus pandemic began has increased the likelihood that Democrats could take control of both the White House and the Senate, while retaining a majority in the House. Many who work in private equity prefer control of the government to remain divided as it would make major overhauls of their industry more difficult, say people who work with buyout firms on government policy.
“Private equity is very invested in some high-profile Senate races, particularly as the polls have shifted and seem to indicate a possible Democratic sweep,” said Milan Dalal, managing partner of Tiger Hill Partners and a former Senate aide. “A number of people in the PE industry view the Senate as a potential bulwark against more aggressive policies.”
Democratic members of Congress have recently launched inquiries into private equity’s investments in the medical-staffing, private-prison and for-profit education industries. Sen. Elizabeth Warren (D., Mass.) last year introduced the Stop Wall Street Looting Act, a bill designed to overhaul what she calls abusive practices by buyout firms.
Employees of New York-based Blackstone Group, the world’s largest private-equity firm, have shelled out the most on the 2020 elections, spending $21.5m, mostly in favour of Republican candidates and conservative groups, according to the Center for Responsive Politics. Boston firm Bain Capital LP, co-founded by Sen. Mitt Romney (R., Utah), is second in employee spending at about $9.5m, almost all of it dedicated to Democratic candidates and liberal groups. Both firms declined to comment.
These totals include so-called soft money, or unregulated donations to groups considered to be independent of any specific candidate. This spending, unlike direct contributions to candidates, isn’t limited by law. Private-equity employees have spent about $44m in soft money on 2020 races, according to data from the Center for Responsive Politics.
Blackstone co-founder and Chief Executive Stephen Schwarzman, for instance, has donated $10m to a political-action committee that aims to defend the Republican majority in the Senate, Federal Election Commission records show. FEC records show that he has also given $1m to a group supporting Sen. Susan Collins (R., Maine), who has trailed her Democratic challenger in recent state polls.
In direct contributions to candidates, employees of private-equity and investment firms have spent about $4.3m supporting Republican senators and just over $3m supporting Democratic senators. The industry prefers Democrats in House races.
Along with Collins, Republican senators widely considered on shaky ground for re-election are Joni Ernst of Iowa, Thom Tillis of North Carolina, Steven Daines of Montana, Cory Gardner of Colorado and Martha McSally of Arizona. These six have collected just under $1.6m in total direct contributions from private-equity employees, according to the Center for Responsive Politics.
Three of the four top recipients of direct contributions from private-equity employees are Republican senators: John Cornyn of Texas, Collins and Senate Majority Leader Mitch McConnell of Kentucky, according to the centre’s data.
Overall, the candidate who has received the most direct support from private equity is presumptive Democratic presidential nominee Joe Biden, who has received almost $1.3m from employees of the industry. President Trump has collected about $181,000.
However, private-equity executives have also given to outside groups and fundraising committees that support particular candidates. Schwarzman has given $3m on to the pro-Trump group America First Action and $250,000 to the Trump Victory Committee.
His Blackstone colleagues have collectively given more than $400,000 to the Biden Action Fund, a joint fundraising effort between Biden’s campaign and the Democratic National Committee, FEC records show. Bain co-chairman Joshua Bekenstein, a prominent Democratic donor, gave $355,000 to the Biden fund.
Source: FN London