Report: Private Equity and Hedge Fund Money in Politics in 2019-20


Oct. 25, 2021


Carter Dougherty
(202) 251-6700

Private Equity and Hedge Funds Spent $627 mn on Politics in 2019-20
First comprehensive analysis of private fund spending shows $858,000 per day

Wall Street private equity and hedge funds pumped at least $627 million into the political process – campaign contributions and lobbying – during the 2019-2020 election cycle, according to a unique analysis of federal election spending data by Americans for Financial Reform.

The sum, amounting to about $858,000 each day, reflects the meteoric rise in the size and scope of the private funds industry, which has come to control vast swaths of the American economy over the last decade. Private fund spending on contributions and lobbying has risen six-fold since 2010.

“Over the past 10 years, this set of powerful Wall Street titans have muscled into American politics in dramatic fashion, using their money to get policies that serve them, rather than the public as a whole,” said Ricardo Valadez, private equity campaign manager at AFR, a coalition of over 200 groups fighting for a fairer, more stable financial system. “Whether it is preserving favored tax loopholes or forestalling more comprehensive reform, private fund executives spend on politics for the purpose of getting richer at the expense of everyone else.”

The full report can be found here.

The analysis includes data on:

  • Spending by private funds on campaigns and lobbying since 2000
  • Top donors from this branch of the financial sector
  • Money from trade associations
  • Number of lobbyists

In the current Congress, private equity firms are fighting changes that would close a notorious provision, the carried interest loophole, which lets executives take advantage of the difference between income and capital gains tax rates. Other provisions currently being considered would impose a surtax on companies that pay their CEOs dramatically more than media workers and revise rules around valuation of assets left to heirs that let much income escape taxation (the stepped-up basis).

Last week, Sen. Elizabeth Warren and Rep. Mark Pocan re-introduced the Stop Wall Street Looting Act, the first comprehensive effort to reform the private equity industry.

The spending by private funds came in the runup to an election in which the financial services industry as a whole spent at least $2.9 billion in contributions and lobbying to influence policy in Washington, according to a previous report by AFR. That level that shattered the previous record of $2 billion set in the 2015-16 cycle. OpenSecrets, which tracks political donations and lobbying, has estimated that the 2020 federal elections cost at least $14.4 billion, a record figure that includes $1.05 billion in “dark money.”

This analysis is based on a unique data set prepared by OpenSecrets for AFR. AFR researched a list of private funds – private equity and hedge funds – and ran the list through the OpenSecrets files to calculate reliable estimates of political giving. The OpenSecrets list of hedge and private equity funds includes many firms whose primary business is asset management or investment advice.