Elizabeth Warren’s long and thankless struggle against our private equity gentlemen – Mother Jones

Over the past four decades, private equity has become a powerful and malicious force in our daily life. In our May / June 2022 issue, Mother Jones investigates the vulture capitalists who chew and spit out American businesses, the politicians who empower them, and the common people who react. Find the complete package here.

For years, Senator Elizabeth Warren has railed against the excesses of private equity firms, including mega deals that leave bankrupt companies and their workers out of work while fund managers line their pockets with commissions and performance bonuses. In 2013, for example, Warren proposed legislation that reduces the influence of the EP by preventing commercial banks, where most Americans hold their money, from investing in the industry. Two years later, he chased after what Inside called PE “golden gooseAsking the Treasury Department and the IRS to crack down on exemptions that allow fund managers to pass full compensation for “interest brought,” which is taxed at a much lower rate than ordinary income.

But his reputation as Washington’s greatest enemy of private equity may have been cemented in 2019, when, as a major contender for the presidency in the Democratic primary, Warren took the rare step of announcing that it would not accept donations of more than $ 200 from PE executives. (In comparison, private equity and investment firms contributed $ 3.8 million at Joe Biden’s run for the Oval Office.) She also teamed up with several fellow Democrats to unveil the Stop the looting of Wall Street law—A massive bill that would not only remove the carried interest loophole, but hamper the ability of fund managers to burden companies they acquire with huge loans while taking out a large chunk of money for themselves. “We call this what it is: legalized looting,” Warren he wrote on his campaign website. “Looting that makes a handful of Wall Street executives very rich while costing thousands of jobs, knocking out valuable companies and harming communities across the country.”

However, he has had little success in involving his colleagues. The Stop Wall Street Looting Act never came out of the Senate Finance Committee, which isn’t too surprising given that lawmakers on both sides rely heavily on contributions from wealthy financiers. Only PE and investment companies have spent $ 42 million on donations to congressional candidates during the 2020 election cycle. About two-thirds of this went to Warren’s Democratic colleagues.