By Chris Cumming
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 $91.7 million 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 $118 million 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 $47 million contributed to candidates and party committees
by private-equity industry employees. The industry has also given
more than $44 million 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 Inc., the world's
largest private-equity firm, have shelled out the most on the 2020
elections, spending $21.5 million, mostly in favor 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 $9.5 million, 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 $44 million 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 $10 million 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 $1 million 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 $4.3 million
supporting Republican senators and just over $3 million supporting
Democratic senators. The industry prefers Democrats in House
races.
Along with Ms. 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
$1.6 million 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, Ms. Collins and Senate Majority Leader Mitch McConnell of
Kentucky, according to the center'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 $1.3 million 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. Mr. Schwarzman has given $3 million to the pro-Trump
group America First Action Inc. 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 Mr. 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.
Write to Chris Cumming at chris.cumming@wsj.com
(END) Dow Jones Newswires
July 26, 2020 07:14 ET (11:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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