When are Democrats going to return to representing the people?

Written by: Mayme Trumble on Aug 31, 2007 2:08 PM EDT

Found this on Bloomberg.com!

KKR, Blackstone, After Tax-Fight Progress, Enlist `Grasstops'
By Ryan J. Donmoyer and Jason Kelly

Aug. 31 (Bloomberg) -- Blackstone Group LP and Kohlberg Kravis Roberts & Co. are gaining support in Congress in their battle against a tax increase on private-equity firms and are looking to the heartland to win the war, the industry's chief Washington spokesman said.

``Things look better now than they did two or three months ago,'' said Doug Lowenstein, president of the Private Equity Council, of which Blackstone and KKR are founding members. ``We've stabilized the situation.''

Lowenstein said at least four ``moderate, centrist'' Senate Democrats -- John Kerry of Massachusetts, Ken Salazar of Colorado, Charles Schumer of New York and Ron Wyden of Oregon -- have expressed skepticism about the plans to tax fund managers' share of profits at the top 35 percent rate, rather than the 15 percent capital-gains rate. He said opposition to the tax is growing among House Democrats, without identifying anyone.

Lowenstein said his group has spent the last six weeks mobilizing middle-market firms such as New York-based Riverside Co. to broaden opposition to the tax increase. The council wants to deflect attention from the huge sums paid to titans such as Blackstone co-founder Stephen Schwarzman, who earned about $684 million when the firm sold shares to the public in June. Schwarzman's 234 million remaining shares are worth about $5.38 billion.

``We need to have these people surface and say, `We're private equity, too,''' Lowenstein said in an interview. Stopping a tax increase is ``hard to sell when the impression is that the people we are advocating for are wealthy beyond imagination.''

`Carried Interest'

The council calls it a ``grasstops'' approach, relying on industry leaders rather than grassroots voters to influence lawmakers. Lowenstein said it's the newest prong in a strategy to counter legislation that would more than double tax rates for managers of private-equity firms, many hedge funds, and partnerships that pay general managers with a share of profits known as ``carried interest.''

KKR spokesman Mark Semer and Blackstone spokeswoman Heather Lucania declined to comment. Kerry, Schumer, Salazar and Wyden haven't said which way they would vote on the tax proposal.

The Private Equity Council already....con't
http://www.bloomberg.com/apps/news?pid=20601070&sid=aZ9lLqSmUN7w&refer=home

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