New report details how Collins reversed her position to benefit the private equity industry, and now they’re rushing in to fund her campaign


A new report today from ProPublica and POLITICO details how Senator Collins has become the number one Senate recipient of donations from the private equity industry. After she reversed her position on a measure in the 2017 GOP tax bill, saving them millions of dollars, the private equity industry has stepped up to help Collins’ struggling campaign to try to send her back to Washington where she can continue to deliver for them and their interests. 


In 2017, Senator Collins considered closing a tax loophole in the GOP tax bill that benefited private equity companies and their billionaire CEOs. Then, she backed down and let the tax break stay in the final bill, a decision that saved the industry billions–– Stephen Schwarzman, the billionaire chairman of private equity giant Blackstone, alone likely saved tens of millions of dollars alone from Collins’ reversal.


Now, Schwarzman and his private equity cronies are rushing in to boost Senator Collins’ flailing reelection bid, making her the top recipient of private equity donations in the Senate. Schwarzman alone has given $2 million to a super PAC backing Collins and $20 million to another super PAC supporting her campaign. 


ProPublica: Susan Collins Backed Down From a Fight with Private Equity. Now They’re Underwriting Her Reelection.

The Maine Republican senator has become the No. 1 Senate recipient of private equity donations.


By Justin Elliott, ProPublica, and Theodoric Meyer, Politico

October 29, 2020


Key Points:


  • In late November 2017, Senate Republicans were racing to secure the votes for their sweeping tax overhaul. With no Democrats supporting the bill and even some Republicans wavering, Sen. Susan Collins, the Maine Republican, found herself with enormous leverage.


  • The day before the vote, she offered an amendment to make the legislation, which lavished tax cuts on corporations and the wealthy, more equitable. It expanded a tax credit to make child care more affordable. To pay for it, she took aim at a tax break cherished by the private equity industry.


  • Then Collins backed down. The day after she introduced it, as the Senate voted on the bill, a Republican Senate aide told a Treasury Department official that Collins was “no longer offering her amendment,” according to emails obtained by ProPublica through a Freedom of Information Act lawsuit. 


  • Her retreat was a significant victory for Senate Majority Leader Mitch McConnell. Collins put aside her opposition and voted for the bill, which passed 51-49.


  • Her turnabout has been one of the mysteries surrounding the $1.5 trillion tax bill, which slashed the corporate rate. The new emails and interviews shed light on how quickly Collins climbed down from her amendment proposal and how the industry maneuvered to preserve the break in the new law, which remains President Donald Trump’s most important legislative achievement.


  • Nearly three years later, Collins is facing a tough reelection battle and the private equity industry has become her most reliable source of donations. She has gotten more than half a million dollars in campaign contributions from the private equity industry this cycle, more than any other senator, according to the Center for Responsive Politics, which tracks political donations.


  • What’s more, Steve Schwarzman, the billionaire chairman and chief executive of the private equity giant Blackstone, has given $2 million to a super PAC backing her. (Schwarzman, a major Republican donor, has also given $20 million to a super PAC supporting Collins and other Republican Senate candidates.) The failure of Collins’ amendment likely saved Schwarzman alone tens of millions of dollars in taxes, according to tax experts.


  • The carried interest loophole, as its critics, including Collins, have called it, has long been the target of reform efforts.


  • The tax break is especially lucrative for the private equity industry, which invests in non-public businesses. A major way that executives at private equity firms like Blackstone make money is by taking a share of profits when the companies they invest in are sold.


  • When Trump became president and Republicans started pursuing an overhaul of the tax code, private equity had reason to be worried. The party had a long wish list of tax cuts but a limited number of ways to pay for them without increasing the deficit by more than Senate rules allowed, $1.5 trillion over 10 years. Eliminating carried interest, as Trump had proposed, was one of them.


  • And the tax break had faced years of opposition. The Obama administration made an ultimately unsuccessful attempt to raise the carried interest tax rate, an effort that Schwarzman famously compared to the Nazis invading Poland. (He later apologized for the analogy.)


  • Trump himself repeatedly complained about carried interest during his presidential campaign. “These are guys that shift paper around and they get lucky,” he said in 2015. “They are paper-pushers. They make a fortune. They pay no tax. It’s ridiculous, OK?”


  • As the Senate was moving toward passing the bill the day after Collins pitched her amendment, Drew Maloney, the Treasury Department’s assistant secretary for legislative affairs, emailed the chief of staff to Sen. Rob Portman, R-Ohio, asking what had “happened with carried interest.” “Collins no longer offering her amendment,” replied Portman’s chief of staff, Mark Isakowitz.


  • It’s not clear exactly why Collins dropped her last-minute, long-shot attempt to kill carried interest. 


  • Wall Street billionaires have stepped up to boost the pro-Collins 1820 PAC, which can accept unlimited donations and has spent heavily on TV and other ads. Schwarzman is the group’s single-largest donor. Behind him is Ken Griffin of Chicago hedge fund giant Citadel, who has chipped in $1.5 million.