The Democratic senator threatening to block the party’s ambitious social policy agenda in order to preserve former President Donald Trump’s tax cuts for corporations and for the wealthy spent last summer interning at a winery owned by the private equity baron Bill Price.
In the summer of 2020, Sen. Kyrsten Sinema, D-Ariz., interned at Three Sticks, a winery in Sonoma, California, owned by Bill Price, co-founder of the private equity leviathan TPG Capital. According to the job description, interns “assist in all facets of harvest work including cleaning and sanitizing equipment, sorting fruit, punchdowns, making basic additions and managing fermentations according to winemaker instructions, barrel work, and other winery-related tasks.”
Sinema’s personal financial disclosures show that she was paid $1,117.40 in wages for her work. But an ensuing fundraiser at Three Sticks, held in August, netted her campaign coffers much more.
Sinema has told Democratic colleagues, according to the New York Times, that she will oppose any tax increases on either corporate or personal rates, essential pillars of the legislation. Her opposition to tax hikes on the rich comes amid a major spending blitz to encourage her to stand against any tax increases on private equity executives or hedge funds.
The same summer that Sinema completed her internship, Three Sticks was one of three stops on a weekend fundraising tour. Tickets to the fundraiser cost $5,000 per guest, with contributions going toward both her own campaign committee and the Getting Things Done political action committee, a leadership PAC used to support fellow congressional moderates such as New Jersey Rep. Josh Gottheimer. Sinema courted major donors that summer, including Lyft CEO Logan Green, Microsoft founder Bill Gates, and of course Price himself, who contributed $5,000.
In the past two years, Sinema has received tens of thousands of dollars in maxed out donations from private equity partners like Price and investment firm CEOs. Now, many of those same senior firm executives stand to lose millions to the IRS if a bill targeting the carried interest tax loophole is included as part of the Senate’s budget reconciliation process. Those executive donors include senior directors at TPG and billionaire Blackstone CEO Jonathan Gray.
Sponsored by Sens. Ron Wyden and Sheldon Whitehouse, the Ending the Carried Interest Loophole Act would require hedge fund managers and private equity executives to pay taxes on their income at the same rates as other workers, ending favored treatment for such executives. Right now, their compensation is not considered income. It is instead classified as a tax deferrable capital gain, subject to far lower rates, despite its near-identical function.
In June, the private equity industry lobby launched a pressure campaign targeting Sinema and fellow Arizona Sen. Mark Kelly to leave the carried interest tax loophole intact.
The Joint Committee on Taxation estimates the bill would raise more than $63 billion over 10 years, serving as an important part of the pay for — the taxes used to offset new spending — in Democrats’ proposed $3.5 trillion budget reconciliation plan. Sinema has repeatedly described the plan as too expensive.
Multiple congressional aides who spoke to The Intercept on the condition of anonymity said that Sinema’s office has been silent on whether or not she will support closing the loophole, despite her concern over the price tag of her party’s budget reconciliation bill and the vast sums the carried interest tax could raise.
Before opening his winery, Price co-founded TPG, one of the largest private equity firms in the world, in 1992. Despite announcing his departure from TPG in 2006, Price listed TPG as his employer on a 2020 Federal Election Commission filing with the title of “partner emeritus.” A spokesperson for Price told The Intercept, “Bill Price no longer has any affiliation with TPG and has not for a decade.” When shown a copy of the FEC filing, the same spokesperson did not respond for further comment. In 2019, during the college admissions pay-to-play scandal, Price’s connection to the firm resurfaced when he defended Bill McGlashan, the husband of his wife’s sister and a senior TPG partner he brought to the firm in 2004. TPG did not respond to multiple requests for comment.
Last week, Sinema announced explicit opposition to yet another critical budget reconciliation revenue mechanism: Democrats’ drug pricing plan, which various estimates say could save the government between $450 and $700 billion over 10 years. In July, Sen. Mitch McConnell called Sinema’s rejection of the budget reconciliation price tag “very courageous.”
As The Daily Poster first reported, Sinema, who has raised over $500,000 from the pharmaceutical and health products industry, was featured in ads by a pharma-funded dark-money group just before she went public with her opposition to drug pricing legislation. Data from the Center for Responsive Politics shows that since entering Congress, Sinema has also grossed well over $6 million in donations from the finance, insurance, and real estate industry.
Earlier this month, the Chamber of Commerce put out a report claiming that closing the carried interest tax loophole would cost almost 5 million jobs and create billions in tax shortfalls.
“The carried interest loophole rewards one narrow class of workers, fund managers, whose compensation already is in the stratosphere compared to almost everyone else, with a deeply discounted income tax rate. It’s indefensible,” Bob Lord, tax counsel at Americans for Tax Fairness, told The Intercept.
“Carried interest also allows fund managers to defer tax on their compensation until the fund’s investments are sold. The rest of us pay tax on our labor income currently, not years later,” Lord said. “Apologists at the Chamber of Commerce justify this travesty with claims the country would lose jobs if fund managers paid tax at the same rate as the rest of us. By that logic, why wouldn’t we reduce their rate to zero? More jobs, right? Or perhaps the IRS should pay them? Even more jobs, right? How any member of Congress would take the Chamber of Commerce seriously here mystifies me.”
Compared to her Democratic colleagues and corporate donors, Sinema’s personal financial disclosures are sparse. Her 2020 filing lists two retirement plans, a dormant consulting business, and income generated from a teaching job at Arizona State University alongside her paltry internship income. This places Sinema’s personal finances in sharp contrast to the income generated by congressional allies like Joe Manchin, who has grossed millions from his coal interests over the course of the past decade.
When it comes to raising campaign cash though, few outmatch Sinema’s zeal for fundraisers and phone banking. According to multiple Democrats who served with Sinema in the House, she was the only member who seemed to actively love being in the Democratic Congressional Campaign Committee call center, claiming a couch for her sole personal use and complaining to other members when they had to leave to vote.
In 2020, she delivered a keynote speech followed by a fundraiser at SFVegas, the lavish securities conference held at the Aria Resort and Casino in Las Vegas and featured in the film “The Big Short.” Former British Prime Minister Theresa May headlined last year’s conference.
Sinema gave a keynote address at a Women in Securitization event before a fundraising reception sponsored by the Structured Finance PAC, which has donated tens of thousands of dollars to powerful members of the House Financial Services Committee such as Reps. Gregory Meeks and Carolyn Maloney. Sinema’s recent votes and public posturing suggest that the cash and advertising blitz launched by financial industry lobbyists may have achieved their intended effect.
In August, Sinema was the only Democrat to vote against an amendment to “establish a reserve fund relating to protecting family farms, ranches, and small businesses while ensuring the wealthy pay their fair share.” A day later, she voted against “a reserve fund relating to increasing the progressivity of the tax code.”
Sinema’s dramatic rightward shift toward the barons of finance and pharmaceuticals at the cost of progressive tax reform stands in sharp contrast to her childhood origin story, in which she talks about having grown up in an abandoned gas station without electricity or running water, at one point living out of a car.
In response to a colleague’s expression of support after an NPR story detailing her family’s struggles with financial hardship, Sinema, then a representative, speaking to colleagues in the Democratic cloakroom just off the House floor, deadpanned: “Yeah, voters love that stupid shit. They eat it up.”
This content originally appeared on The Intercept and was authored by Daniel Boguslaw.