Investment firms including Cerberus Capital Management and the Carlyle Group, as well as an organization advocating the private equity industry, recently hired lobbyists as lawmakers seek tax loopholes.
Democrats in Congress, for example, want to fill the gap. Rep. Bill Pascrell Jr., DN.J., a member of the House Ways and Means Committee on Tax Letters, and Reps. Andy Levin, D-Mich., And Katie Porter, D-Calif., Recently enacted laws that allow this would close the gap in the interest carried over.
The interest carried forward is a portion of the profits of a private equity firm or hedge fund that is used to offset fund managers. Transferred interest is not taxed as ordinary income. Instead, it is taxed at the lower capital gains rate.
The American Investment Council, an advocacy group that represents the interests of dozen of private equity firms, also hired lobbyists.
Company lobbyists and lobbyists registered for their customers in January. This is evident from new disclosure reports that have been reviewed by CNBC.
CNBC reported in January that several Wall Street firms were hiring lobbyists when Joe Biden and Democrats were about to take power in the White House and both houses of Congress. Blackstone, a massive private equity firm, was among the firms hiring lobbyists at the time. Blackstone and the Carlyle Group are also members of the American Investment Council.
Cerberus Capital Management recently hired Hobart Hallaway & Quayle Ventures to advocate for “federal laws and regulations that affect private equity, including issues related to the spectrum,” according to a lobbying report.
Stephen Feinberg, co-founder of Cerberus, was once named chairman of the White House Intelligence Advisory Council by former President Donald Trump. Cerberus focuses in part on what it calls operational private equity, which, according to the company’s website, differs from standard private equity investments in that sustained operational improvements and positive strategic initiatives are at the heart of every investment from start to finish stand.
According to the Cerberus website, the company has invested more than $ 15 billion in 69 portfolio companies.
Hobart Hallaway and Quayle lobbyists working with Cerberus have ties to both Democrats and the GOP. Rashid Hallaway, who works on the Ceberus account, was previously an advisor to former Senator Evan Bayh, D-Ind. Benjamin Quayle was a Republican Congressman from Arizona before he became a lobbyist.
A lobbying report for the fourth quarter of 2020 shows that Cerberus ended its previous work with Hobert Hallaway & Quayle in December before the company appears to be hired again for the new congress. Data from the bipartisan Center for Responsive Politics shows that Cerberus spent over $ 2 million on lobbying last year, including efforts on behalf of its subsidiaries.
The Carlyle Group, co-founded by former Jimmy Carter consultant David Rubenstein, has hired Madison Group’s Marcus Mason to lobby on their behalf. The new lobbying registration form states that Mason, who served as campaign advisor to former President Barack Obama, will focus on “issues related to private equity, wealth management, real estate and corporate finance.”
“We work with advisors on both sides of the aisle to advocate how policies can affect our business, our businesses and the communities in which we operate,” Brittany Berliner, a spokeswoman for Carlyle, told CNBC in an explanation.
A person familiar with Mason’s work said that Carlyle did not ask him to stand up for the transferred interest.
The American Investment Council hired Ogilvy Government Relations with the aim of “enacting laws to regulate private equity, including tax issues.”
At least two of Ogilvy’s representatives for the American Investment Council have ties to current and former senior Democratic leaders, including a former advisor to Senator Bob Menednez, DN.J., a member of the Senate Committee on Banking, Housing and Urban Affairs.
A former deputy chief of staff to former House Democrat leader Dick Gephardt is also on the new lobbying team hired by the American Investment Council.