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Blackstone Lobbying Backfires

Private equity firms ‘overreach’ with claim they help the poor

By Jonas Oransky, Newser Staff

Posted Sep 21, 2007 8:10 PM CDT

(Newser) – Private equity firms launched their first coordinated effort at lobbying this year—and overshot by a long stretch, Bloomberg reports. Blackstone and 11 other firms joined hands to fight a tax hike on carried interest—fund managers' share of profits—and have gone so far as to argue that the lower rate they enjoy spurs development in poor communities. As one GOP congressman put it, "When they start talking about women and children, they're overreaching.''

The group has already spent $5.5 million on the effort—four times as much as they spent all of last year, says Bloomberg. Among the lawmakers who were unimpressed was Ways and Means chair Charles Rangel, who quipped earlier this month, "It's going to be hard for me to draft a minority and women set-aside to rip off the system.''

[Images (6)]

[Videos (1)]

William Stanfill, founding Partner of Trailhead Partners LP, of Denver, Colo., right, testifies on Capitol Hill in Washington, Tuesday, July 31, 2007, before the Senate Finance Committee hearing on taxing... (Associated Press)

A plaque with the Blackstone Group's company logo is photographed Monday, Aug. 13, 2007 at the company's headquarters in New York. (AP Photo/Mary Altaffer) (Associated Press)

In this file photo released by The Blackstone Group, Hamilton E. James, president and chief operating officer of The Blackstone Group is shown. (AP Photo/The Blackstone Group, file) (Associated Press)

Blackstone and a council of private equity firms helped fund a coalition of minority investors including Earvin "Magic" Johnson to lobby against the tax increase on Capitol Hill. (KRT Photos)

Ways and Means Committee chairman Charles Rangel, seen here on "Meet The Press." "It's going to be hard for me to draft a minority and women set-aside to rip off the system," said Rangel on Sept. 7. (Getty Images)

Bruce Rosenblum, managing director, The Carlyle Group, right, testifies on Capitol Hill in Washington, Tuesday, July 31, 2007, before the Senate Finance Committee hearing on taxing the profits of hedge... (Associated Press)

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Blackstone Lobbying Backfires