Last week, Democratic leaders won Conservative Sen. Kyrsten Sinema’s (D-Arizona) key vote on the Inflation Reduction Act (IRA) by removing a provision intended to close a loophole allowing private equity investors- investment and hedge fund managers to pay a lower rate of tax on their income than the tax rate they would normally face, while providing for an exemption from a minimum of 15% for private equity subsidiaries.
Now, new documents reveal that private equity executives gave Sinema more than half a million dollars before she negotiated to keep the tax loophole, known as the deferred interest loophole, intact. and granting industry special tax privileges – suggesting for the umpteenth time in the past year that Sinema’s ties to corporate and wealthy interests could guide his policy decisions from his powerful seat in the Senate.
The FinancialTimes found in an analysis released the same day the Senate passed the IRA that in this campaign cycle alone, Sinema secured more than $500,000 in political contributions from executives at private equity firms such as KKR and Carlyle – bands that have massive influence across a wide range of industries, from Health care at lodging and more. In total, these donations represent 10% of its fundraising from individual donors for this election cycle.
Sinema is not eligible for re-election until 2024. But the timing of donations, which often amount to tens of thousands of dollars from executives of the same company, suggests that Sinema may have been swayed by vested interests. haves. kill the tax provision in the IRA.
Private funders have for years lobbied aggressively on both Democrats and Republicans kept the carried interest loophole alive, and actually sprang into action when the IRA was released.
They campaigned specifically to prevent the IRA’s carried interest loophole from being closed, and, just an hour later the first version of the IRA was published, private equity lobbyists embarked on a blitz to get the industry exempt from the minimum corporate tax under the bill. After the bill was negotiated with Sinema, private equity won both battles.
Also benefiting from this lobbying is Senator Chuck Schumer, who brokered the IRA with coal baron Sen. Joe Manchin (D-West Virginia) and later Sinema. FinancialTimes found. In total, the Senate Majority Leader has received $1.28 million so far this election cycle, which is about 4.4% of the amount he has received from individual donors.
While it’s unclear whether Schumer was swayed by those donations — the provision was in the original bill he negotiated with Manchin for months — and it’s impossible to know the purpose of those donations, Sinema has shown itself deep in the pockets of industry lobbyists. and rich interests over the past year.
Sinema herself even basically admitted as such. In April, at a meeting organized by the conservative lobby group Arizona Chamber of Commerce, Sinema reassures corporate donors who, as talks for the Build Back Better Act were reignited, would obstruct the bill in the same way as they have all last year.
Last year, industry donors targeted Sinema, successfully convincing her to oppose almost every major provision of the Build Back Better Act. Big Pharma donors showered sinema and other conservative Democrats with campaign money as lawmakers agreed to kill a provision allowing Medicare access to lower drug prices; Sinema was also targeted by Exxon’s lobbyists during its sterilization the part of the bill that would deal with the climate crisis.
Meanwhile, the conservative Democrat has raised money from conservative interests. While courting fundraisers last year, the former progressive activist got billed as a grassroots Republican, selling herself as anti-government and anti-tax. Conservative billionaires who had never donated to Democrats before were suddenly funnel donations to Sinema and Manchin last year as they worked in tandem to kill the Build Back Better Act.