She took Wall Street cash while killing tax
Sen. Kyrsten Sinema received a surge of campaign donations from rich investors.
WASHINGTON — Sen. Kyrsten Sinema, the Arizona Democrat who singlehandedly thwarted her party’s longtime goal of raising taxes on wealthy investors, received nearly $ 1 million over the last year from private equity professionals, hedge fund managers and venture capitalists whose taxes would have increased under the plan.
For years, Democrats have promised to raise taxes on such investors, who pay a significantly lower rate on their earnings than ordinary workers. But just as they closed in on that goal, Sinema forced a series of changes to her party’s $ 740billion 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 from a separate tax increase other huge corporations now have to pay.
The bill, with Sinema’s alterations intact, was given f inal approval by Congress on Friday and is expected to be signed by President Biden this week.
Sinema has long aligned herself with the interests of private equity, hedge funds and venture capital, helping her net at least $ 1.5 million in campaign contributions since she was elected to the House a decade ago. But the $ 983,000 she has collected since last summer more than doubled what the industry donated to her during all of her preceding years in Congress combined, according to a review of campaign finance disclosures.
The donations, which make Sinema one of the industry’s top beneficiaries in Congress, serve as a reminder of the way that high- powered lobbying campaigns can have dramatic implications for the way legislation is crafted, particularly in the evenly divided Senate, where there are no Democratic votes to spare. They also highlight a degree of political risk for Sinema, whose unapologetic defense of the industry’s favorable tax treatment is viewed by many in her party as indefensible.
“From their vantage point, it’s a million dollars very well spent,” said Dean Baker, a senior economist at the Center for Economic and Policy Research, a liberalleaning think tank. “It’s pretty rare you see this direct of a return on your investment. So I guess I would congratulate them.”
Hannah Hurley, a Sinema spokesperson, acknowledged the senator shares some of the industry’s views on taxation but rebuffed any suggestion that the donations inf luenced her thinking.
“Sen. Sinema makes every decision based on one criteria: what’s best for Arizona,” Hurley said in a statement. “She has been clear and consistent for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness.”
Sinema’s defense of the tax provisions offers a jarring contrast to her background as a Green Party activist and “Prada socialist” who once likened accepting campaign cash to “bribery” and later called for “big corporations & the rich to pay their fair share” shortly before launching her first campaign for Congress in 2012.
She’s been far more magnanimous since, praising private equity in 2016 from the House f loor for providing “billions of dollars each year to Main Street businesses” and later interning at a private equity mogul’s boutique winery during the 2020 congressional recess.
The surge in contributions from the industry to Sinema trace back to last summer. That’s when she f irst made clear that she wouldn’t support a carried interest tax increase, as well as other corporate and business tax increases, included in an earlier iteration of Biden’s agenda.
During a two- week period in September alone, Sinema collected $ 47,100 in contributions from 16 highranking officials from the private equity f irm Welsh, Carson, Anderson & Stowe, records show. Employees and executives of KKR, another private equity behemoth, contributed $ 44,100 to Sinema during a two- month span in late 2021.
In some cases, the families of private equity managers joined in. David Belluck, a partner at the f irm Riverside Partners, gave a $ 5,800 max- out contribution to Sinema one day in late June. So did three of his college- age kids, with the family collectively donating $ 23,200, records show.
“I generally support centrist Democrats, and her seat is important to keep a Democratic Senate majority,” Belluck said, adding that his family has known Sinema since her election to Congress. “She and I have never discussed private equity taxation.”