GOP Seeks Out Private Equity Cash

In search of campaign cash, Senate Republicans are turning to private equity firms targeted for higher taxes in Democratic tax bills.

National Republican Senatorial Committee Chairman John Ensign (Nev.) and Sen. Mike Crapo (R-Idaho), who sits on the Senate Finance Committee, recently held a $700,000 fundraiser in New York.

Neither Ensign nor Crapo wanted to discuss which firms gave to the GOP, but they included Kohlberg Kravis Roberts & Co. and the Blackstone Group.

Democrats are pushing proposals to alter the way managers at these firms are taxed, referred to as “carried interest” provisions, as well as to prevent them from shifting payments to offshore accounts, and are seeking nearly $50 billion in new revenue from the industry over the next decade.

Ensign said top executives at the private equity firms are worried about what they see on Capitol Hill, and he went to the Big Apple, the backyard of Democratic Senatorial Campaign Committee Chairman Charles Schumer, to hear their concerns.

“They are concerned about that, and just the whole direction of raising taxes,” Ensign said. “What you’re seeing is, [while] Democrats have been in power, they have been saying things like, ‘We won’t raise your taxes,’ but their true stripes are coming out.”