As Donald Trump develops his economic policy, Blackstone CEO Stephen Schwarzman has emerged as one of the new president’s most influential advisers — one who has boasted of his work shaping the administration’s agenda. An International Business Times review of Trump policies and Blackstone investments show that Schwarzman’s rise to political prominence has coincided with recent White House moves that could enrich his company. The moves that help Blackstone have occurred while Schwarzman has been able to simultaneously sculpt federal policy and circumvent conflict-of-interest laws.
In recent weeks, Trump has moved to halt a Department of Labor rule that could complicate Schwarzman’s dream of expanding Blackstone’s business into the multi-trillion-dollar market of retail retirement savings products. Trump has also promised to roll back Dodd-Frank regulations passed in the wake of the financial crisis — a cause Blackstone has lobbied on and that could benefit the larger private equity industry.
The Trump administration has also — just when Blackstone has taken steps to move into infrastructure investing — floated infrastructure investment concepts that could direct government spending through Wall Street intermediaries. And as Blackstone has worked to expand its investments in oil and gas drilling, the new administration is preparing to try to loosen environmental regulations that restrict fossil fuel exploration.
Meanwhile, even though Trump campaigned on a promise to end a special “carried interest” tax break that enriches private equity executives like Schwarzman, the White House has yet to offer such a plan — or endorse existing legislation to end the tax break.
Schwarzman declined to answer International Business Times’ questions.
Schwarzman has long been a fixture in Republican politics. The private equity billionaire has routinely been one of the party’s top donors — in the last election cycle alone, he pumped $4.8 million into Republican-aligned super PACs, according to data compiled by the nonpartisan Center for Responsive Politics. He has also touched off political firestorms, at one point likening the Obama administration’s Wall Street policies to the Nazi invasion of Poland.
Schwarzman has forged strong political and personal ties to the new White House. Trump in December said he aimed to meet “frequently” with Schwarzman, and he appointed the billionaire to chair the White House’s business advisory council — a panel of corporate CEOs regularly advising the president. A week after the council’s first meeting, Schwarzman hosted a lavish birthday party for himself — which observers speculated cost as much as $20 million — near Trump’s Palm Beach resort, and many top Trump administration officials were in attendance.
The extent of Schwarzman’s involvement in overseeing Trump administration policy was on display last week. During a White House event, he said his team met with Cabinet secretaries who presented their agenda to his council. Schwarzman said his group has been “working together” with the administration on various policy issues — many of which intersect with Blackstone’s business.
Despite Schwarzman’s formal policy role in the Trump White House, he is not technically on the White House payroll. The Trump administration appears to be interpreting that status to mean he is not subject to strict ethics and conflict-of-interest laws designed to prevent public officials from working on matters in which they have a financial interest.
