Republican presidential candidate Mitt Romney has been attacking Newt Gingrich for his time in the Washington influence industry. But he has also profited – heavily – from lobbying.
As Mother Jones reports, Romney sided with Bain Capital, the private equity firm he co-founded and later left, in a 2007 lobbying battle that made him millions of dollars:
2007, as it turns out, was something of a watershed for private equity lobbying: In that year, lobbying expenditures for the industry practically tripled. The spike was the result of an industry-wide effort to preserve a number of tax giveaways for the finance industry and its CEOs—including the carried interest rule, a tax loophole that allows Romney and other private equity mavens to reduce their taxes by millions of dollars…
After Democrats won control of both the House and the Senate in the 2006 midterm elections, they advanced several pieces of legislation that threatened to end this lucrative quirk of the tax code and other tax policies that favor the rich. Mitt Romney, who made just over $20 million in investment income in 2010, wasn’t having any of it. During an August 2007 appearance on Kudlow & Company, Romney was asked what he thought of the effort to close the loophole. He wasn’t happy. “I want people to be able to save their money and invest in America’s economy tax-free,” Romney said. “I want to lower taxes. I want to lower marginal rates across the board. I want to lower taxes for corporations,” he told Kudlow.
Bain spent $300,000 over nine months lobbying the House and Senate on the bills that threatened the loophole. And then, between January 2009 and April 2010, the firm, along with other private equity groups, lobby shops, PR firms, and trade groups, spent about $15 million lobbying to keep the loophole alive. Meanwhile, the loophole cost the federal government some $10 billion in revenues.
The private equity industry depends on favorable tax treatment. And favorable tax treatment depends on some pretty heavy lobbying. And lobbying undermines political accountability, corrupting the entire system. Perhaps Romney should think about that the next time he criticizes influence peddling.