Sinema took Wall Street money while killing tax on investors

Over the past year, private equity professionals, hedge fund managers and venture capitalists have given Sinema nearly $1 million.

For years, Democrats have promised to raise taxes on investors who pay less in taxes than workers. Sinema forced a series of changes to her party's $740 billion election-year spending package, eliminating a proposed "carried interest" tax increase on private equity earnings while securing a $35 billion exemption that will spare much of the industry.

The bill was given final approval by Congress on Friday and is expected to be signed by the president next week.

Since she was elected to the House a decade ago, Sinema has helped her net at least 1.5 million dollars in campaign contributions, thanks to her alignment with the interests of private equity, hedge funds and venture capital. According to an Associated Press review of campaign finances disclosures, she has collected almost $1 million since last summer, more than doubling what the industry has donated to her in the past.

The donations, which make Sinema one of the industry's top beneficiaries in Congress, serve a reminder of the way that high power lobbying campaigns can have dramatic implications for the way legislation is crafted. Many in her party view her defense of the industry's favorable tax treatment as indefensible.

Dean Baker is an economist at the Center for Economic and Policy Research. It is rare for you to see a return on your investment. I think I'd congratulate them.

Sinema's office wouldn't allow her for an interview. The senator shares some of the industry's views on taxation, but she doesn't think donations influenced her thinking.

Every decision made by Senator Sinema is based on what's best for Arizona. Over the course of a year, she has made it clear that she will only support tax reforms and revenue options that support Arizona's economic growth and competitiveness.

The American Investment Council lobbies on behalf of private equity.

Drew Maloney, the organization's CEO and president, said that they worked to ensure that members of Congress from both sides of the aisle understood how private equity directly employs workers and supports small businesses throughout their communities.

The contrast between Sinema's background as a Green Party activist and self-styled "Prada socialist" who once likened campaign cash to "bribery" and later called for "big corporations & the rich to pay their fair share" is startling.

She praised private equity in 2016 for providing "billions of dollars each year to Main Street businesses" and later interns at a private equity mogul's boutique winery during the 2020 congressional recess.

The industry made huge contributions to Sinema last year. She made clear that she wouldn't support a carried interest tax increase, as well as other corporate and business tax hikes, in an earlier version of Biden's agenda.

Over the course of two weeks in September, Sinema collected $47,100 in contributions from high-ranking officials from Welsh, Carson, Anderson & Stowe. KKR employees and executives made a contribution of $44,100 to Sinema over the course of two months.

Private equity managers' families joined in some instances. David Belluck gave a max-out contribution of $5,800 to Sinema in late June. The family collectively donated over twenty thousand dollars, records show.

Belluck said that Sinema's seat is important to keeping a Democratic Senate majority. We have never talked about private equity taxation.

The industry gave money to the lobbying effort spearheaded by the investment firm.

Sinema forced Democrats to abandon their carried interest tax increase when the bill was up for debate.

Schumer said last week that Sinema wouldn't vote for the bill unless it was removed. "We didn't have a choice."

Private equity lobbyists pressed Sinema and other centrist Democrats for changes after they discovered a provision in the bill that would have subjected many of them to a separate 15% corporate minimum tax.

The proposed language for modifying the bill was included in an email sent by a lobbyist on Saturday. Would you and your boss be willing to raise the alarm about this?

The person did not reply to the request.

Sinema worked with Republicans to remove the corporate tax increase provisions from the bill.

She has supported pro-growth policies that encourage job creation. Her tax policy positions and focus on growing Arizona's economy and competitiveness are well-known.

Many in her party don't agree with her. They don't think the treatment does much to boost the economy and don't think the tax benefits are enjoyed by everyone.

The donors of Sinema made their case.

Large tracts of real estate in Sinema's home state of Arizona are owned by Blackstone. The UN experts said that the financial model of the firm was to blame for the financialization of housing that has driven up rents and home costs.

Records show that executives and their family members have given tens of thousands of dollars to Sinema in the last year.

All employee contributions are strictly personal according to the statement. It was proud of its investments in housing.

Centerbridge Partners, a New York-based firm that buys up the debt of distressed governments and companies, is one of the major financial services donors. Mark Gallogly and his wife, Elizabeth, have given at least $29,000 to Sinema since the beginning of the year.

Centerbridge bought P.F. Chang's for $1 billion. The company was sold to another private equity group in the year 2019. The company received a $10 million aid loan to cover payroll but lost jobs and closed locations as it struggled with the swine flu.

Centerbridge Partners was part of a group of hedge funds that helped bring about an era of austerity in Puerto Rico after purchasing billions of dollars of the island government's debt. A group of creditor sued one of the U.S. territory's pension funds multiple times. The group of creditor asked a judge to take money from the Puerto Rican pension fund in order to collect.

A Centerbridge representative was not available Friday.

Sinema's reliance on donations from wealthy investors will be a campaign issue when she is up for reelection in four years.

There is no universe in which it is politically smart to fight for favorable tax treatment of the wealthiest people in the country. It will be a powerful issue.

That's right.

Josh Boak is a writer for the AP.