A new analysis from Beacon has uncovered that Stephen Schwarzman, the private equity billionaire bankrolling a pro-Collins Super PAC, is advising Trump on the coronavirus crisis and is poised to profit from the federal government’s response.

 

Schwarzman has given $1 million to 1820 PAC, the largest Super PAC backing Collins. Now, his private equity firm is “pushing hard to benefit” from taxpayer-funded pandemic relief legislation as small businesses across Maine beg for aid to keep their workers on payroll.

 

After voting for the 2017 GOP tax bill, Senator Susan Collins became one of the U.S. Senate’s biggest beneficiaries of private equity money. Now, in an example of pay to play politics at its worst, top Trump and Collins donors like Schwarzman are shaping public policy on the coronavirus response and using it to line their own pockets.

 

Beacon: Collins’ biggest billionaire backer is advising Trump on pandemic response

 

By Lauren McCauley

April 21, 2020

 

Key Points:

 

  • Stephen Schwarzman, the CEO of private equity firm The Blackstone Group and likely the largest single financial supporter of Sen. Susan Collins’ re-election, has been advising President Donald Trump throughout the COVID19 pandemic and is poised to benefit from the federal government’s response to the crisis.

 

  • According to national reporting, as COVID-19 was just being detected in the U.S. and Trump was being advised by public health and security officials to take a more proactive approach to containing the virus, the president reached out to Schwarzman for advice on how such a response would impact Wall Street.

 

  • The New York Times reported on April 11 that in early March “the debate over whether to shut down much of the country to slow the spread was especially fierce. Always attuned to anything that could trigger a stock market decline or an economic slowdown that could hamper his re-election effort, Mr. Trump also reached out to prominent investors like Stephen A. Schwarzman, the chief executive of Blackstone Group, a private equity firm.”

 

  • Schwarzman is one of the primary funders of the 1820 PAC, a conservative political action committee that has launched a massive TV advertising campaign backing Collins’ re-election. Named after the year Maine became the 23rd state, the PAC’s website lauds Collins for “bipartisanship” and “independence,” however those funding the group are among Trump and the GOP’s biggest donors.

 

  • According to the latest filings, Schwarzman has donated $1 million to the PAC and in October 2019 he held a fundraiser for Maine’s senior senator at his $35 million Park Avenue apartment.

 

  • “It is deeply disturbing that not only is Senator Collins’ top billionaire backer playing a key role in crafting the federal coronavirus response, but he’s also in a position to profit off of it,” said Maine Democratic Party chair Kathleen Marra. “This is pay-to-play politics at its worst.

 

  • Schwarzman was also on a March 24 call with Trump and Vice President Mike Pence during which he and other prominent investors advised the president on what they saw as the economic impact of the pandemic. CNBC, quoting “people familiar with the matter,” reported the call was “focused on how America’s top money managers are viewing markets and the U.S. economy.”

 

  • Those on the call reportedly discussed supporting certain industries impacted by the coronavirus and encouraged the president to consider a “date-certain approach to getting back to business.” The call took place just an hour before Trump held a press conference warning against drastic economic decline, during which he suggested that things should “reopen” by Easter.

 

  • Private equity firms including Schwarzman’s Blackstone Group are pushing hard to benefit from the legislative response to the pandemic. As Vanity Fair contributor Bethany McLean outlined in an April 9 investigation, because many public pension funds are now heavily invested in private equity, they are arguing that it’s in the public interest that these Wall Street firms receive as much bailout money as possible.

 

  • McLean wrote: “[A]t Blackstone, roughly one-third of the firm’s money comes from retirement plans set up to provide for over 30 million working-class Americans, according to someone with knowledge of its portfolio. So if Blackstone’s investments crater, the teachers, firefighters, and health care workers who are counting on those investments to generate the returns necessary to pay their pensions will suffer.”

 

  • “Think of private-equity firms as the banks of the corona crisis,” McLean added, “They are, for better or worse, too big to fail.”

 

  • Much of Collins’ public response to the coronavirus has centered around the Paycheck Protection Program that she co-authored and which was meant to provide small businesses with funding to continue to pay employees and stay afloat. However, the $349 million set aside from the CARES Act for the program dried up last week.

 

  • There has also been mounting criticism that some not-so-small businesses ended up with a large chunk of that funding. According to an analysis of regulatory filings by Bloomberg News, more than a dozen publicly traded companies with revenue of more than $100 million received money from the program supposedly ear-marked for small businesses. It’s not yet clear if Blackstone was one of the beneficiaries.

 

###