Meet Josh Gottheimer, the Democratic man-bag of billionaires
The Democratic congressman leading the charge to undermine his party’s two-pronged strategy to push through President Joe Biden’s economic agenda was the biggest beneficiary of the capital industry’s campaign money. investment from the US House, whose leaders could lose lucrative tax loopholes if this program becomes law. The former legislative director of the legislature is also lobbying lawmakers on behalf of tax policy on behalf of the private equity industry, according to federal files reviewed by the Daily poster.
Representative Josh Gottheimer (D-NJ) led a media tour and legislative campaign to pass a corporate-backed infrastructure bill separate from Biden’s reconciliation plan – a move backed by corporate lobbyists seeking to kill the latter because he will probably be paid by taxes. on the rich.
Gottheimer’s campaign to bypass his own party strategy is a huge boon to the Blackstone Group, the private equity giant whose wealthy executives are collectively its major contributors to the campaign, and both of whom stand to benefit from the adoption of the bipartisan bill on Senate infrastructure and death. of the law on reconciliation. In total, Blackstone executives have paid Gottheimer nearly $ 200,000 in campaign funds since 2015 – and his wife, Marla Tusk, works for a lobbying and consulting firm that lists Blackstone as a client.
In the last election cycle alone, Gottheimer received more than $ 450,000 from private equity and investment donors, making him the first recipient of that United States House money during the campaign, according to data compiled by OpenSecrets.
Under increasing public pressure, Gottheimer began insistent that he wants to pass the reconciliation law, just after the passage of the Senate infrastructure bill. But it’s an open secret in Washington that the attempt to separate the two bills is part of an effort to condemn the reconciliation package, as separating the bills would remove the incentive for conservative Democrats to vote. for the much more progressive reconciliation bill.
Gottheimer’s moves are just the latest examples of his defense of the private equity industry. He championed a government-funded industry bailout during the pandemic. And after his own state’s scandal-plagued pension system reported paying $ 670 million in fees to Wall Street in a single year, Gottheimer used a Congressional hearing in 2019 to defend the healthcare industry. revelations that she was systematically stealing pension systems with exorbitant fees in return. for low returns on investment.
Gottheimer said that “we hear from institutional investors looking to invest in private equity as part of their asset allocation strategy,” urging witnesses to praise the private equity industry.
“I think our job on the committee is, of course, to make sure that we punish bad actors without interfering with those who produce good returns,” he added.
Blackstone has been pushing for months to pass the Senate infrastructure bill that Gottheimer is defending – including in an op-ed written by the company’s billionaire CEO Stephen Schwarzman, who was previously an adviser to former President Donald Trump. The company is a major private investor in infrastructure, and the legislation includes language encouraging local governments to channel public infrastructure spending into private equity firms.
The provisions were inserted after a trade association affiliated with Blackstone lobbied “public-private partnerships in state and federal infrastructure funding,” according to federal disclosures first highlighted by the Washington post.
Likewise, Blackstone has a myriad of financial reasons to support Gottheimer’s strategy to kill or dramatically reduce the Democrats’ $ 3.5 trillion reconciliation plan, which aims to put much of the economic, health agenda into effect. and climate change from President Biden.
While the private equity sector could benefit from some spending in the reconciliation bill, legislation may include measures to close or narrow the so-called deferred interest tax loophole, which allows private equity tycoons to classify their income as capital gains and paying only a 20 percent tax rate on that income, rather than the standard top income rate of 37 percent. This is the tax loophole that sadly allows billionaire Warren Buffett to pay a lower effective tax rate than his secretary.
Senator Ron Wyden (D-OR), who chairs the panel that will draft the upper house’s version of the tax provisions of the reconciliation bill, recently backed legislation that would close $ 63 billion of these tax loopholes that benefit Blackstone and its leaders.
The reconciliation legislation could also raise the corporate tax rate, which is of particular interest to Blackstone after the company completed a conversion to a corporation to take advantage of President Donald Trump’s corporate tax cuts in 2017. The increase in the Corporate tax rates could limit the financial gains that the company has made from these previous tax breaks.
Likewise, the reconciliation bill could subject Blackstone executives to significantly higher personal income taxes. The homemade version of the reconciliation bill would force those who earn an average of $ 4 million a year to pay more than $ 1 million more in taxes each year, according to a new analysis from the Tax Policy Center.
Meanwhile, the Reconciliation Bill’s climate programs designed to move the country away from fossil fuels could ultimately jeopardize the profitability of Blackstone’s huge investments in fossil fuels, companies that are worsening the climate crisis.
Immediately after the 2020 election, a leading private equity trade publication reported that private equity executives “turned to [Gottheimer] to help protect them from the left wing of his party, ”the publication noting that he had garnered large campaign donations from some of the industry’s wealthiest executives.
Gottheimer also has personal ties to the private equity industry. His wife, Marla Tusk, is lobbying for Tusk Strategies, a consulting firm that lists Blackstone as a client on its website. (Tusk is listed as General Counsel for Tusk Holdings, the parent company of Tusk Strategies.)
Tusk Strategies, which is led by former New York City Mayor Mike Bloomberg’s campaign manager, provides communications support, grassroots organizing and policy advice to corporate clients. “We design and execute complex political and regulatory campaigns at all levels of government,” its website says.
The company has worked for Blackstone for years. Tusk Strategies named the private equity giant among its clients in 2016, when it launched a “specialized policy diligence practice to advise banks, asset managers, private equity funds, finance groups real estate and other institutions on the political and regulatory impact of potential investments.
Although Tusk Strategies is not registered to lobby at the federal level, lobbying records from New York show that Tusk was involved in state lobbying efforts.
Tusk Holdings also owns a venture capital firm, called Tusk Ventures, run by a former Blackstone executive. Gottheimer’s most recent financial disclosure, from 2020, lists a substantial investment in a Tusk Ventures fund. The record indicates that the investment in Tusk Venture Partners I GP, LLC, was worth between $ 250,000 and $ 500,000 and generated between $ 100,000 and $ 1 million in income for his family last year.
Former Gottheimer chief executive Mike Lukso is on the list of registered lobbyists for the American Investment Council, the lobbying group for the private equity industry in Washington. He has been lobbying on “proposals to change the tax treatment of deferred interest capital gains,” according to the latest lobbying disclosures from the second quarter of 2021.