Untangling the Trump administration's private equity ties
March 28, 2017
On the surface, it’s an interesting contrast after Trump promised during his presidential campaign to peel back the carried interest tax deduction that allows GPs to receive a tax break on realized investments. And closing the loophole would have enormous consequences for PE firms.
Electing private equity execs is complicated, too, since employees entering the executive branch of government are often required to divest their financial interests to avoid ethics violations in accordance with the US Constitution's Emoluments Clause.
Since being elected, Trump has been mum on eliminating the carried interest tax break, and as of this week, his cabinet had about 20 confirmed members. Earlier this month, an Associated Press story estimated that more than 500 sub-Cabinet level positions in the administration remained unfilled.
But there are already a handful of current and former private equity bigwigs that hold policymaking roles within the administration and will help shape the 45th president’s economic policy:
Stephen Schwarzman: Chairman of the President’s Strategic and Policy Forum

Wilbur L. Ross, Jr.: Secretary of Commerce

Kenneth Juster: Deputy Assistant to the President for International Economic Affairs and Deputy Director of the National Economic Council

William Hagerty: Ambassador to Japan

Tom Barrack: Chairman of Inauguration Committee

Betsy DeVos: Secretary of Education

Other notables with PE connections
- Gary Cohn, a registered Democrat who donated to Hillary Clinton’s presidential campaign, left his post as the president and COO at Goldman Sachs to become the Director of the National Economic Council. To avoid conflicts of interest, Cohn sold out of any private equity and hedge fund investments with the bank. In his new role, Cohn will play a major role in shaping tax reform, infrastructure and financial regulation.
- Trump’s decision to tap Jay Clayton, a former Sullivan & Cromwell partner, to head the Securities and Exchange Commission was met with resistance. According to The Washington Post, a group of progressive organizations are set to challenge Clayton’s nomination, claiming that the lawyer has spent his entire career representing the very institutions the head of the SEC chairman is responsible for policing. Clayton's practice focused on public and private M&A transactions.
- Trump has reportedly been considering Cerberus Capital Management co-founder and CEO Stephen Feinberg, a Trump donor, to conduct a review of the US intelligence community, a move that would allow the 56-year-old to “streamline 17 separate agencies, a roughly $70 billion annual budget and tens of thousands of employees,” per Reuters. No formal announcement has been made.
- DJ Gribbin, Special Assistant to the President for Infrastructure Policy, previously served as the head of government advisory for Macquarie Capital, the private investing arm of Australia's Macquarie Group. He was most recently the national director of strategic counseling at HDR and has served as general counsel for the US Department of Transportation.
- Jeremy Katz, formerly a managing director at GCM Grosvenor, now serves as Deputy Assistant to the President and Deputy Director of the NEC. Another alumnus of the George W. Bush administration, Katz served as a senior policy advisor under Commerce Secretary Donald Evans. He'll report to Cohn in his new role.
- Trump appointed Adebayo "Bayo" Ogunlesi, chairman and managing partner at Global Infrastructure Partners, as a member of the Schwarzman-led Strategic and Policy Forum.
- Labor secretary nominee Andrew Puzder withdrew his name from consideration, as did Navy secretary nominee Philip Bilden, a former partner at HarbourVest Partners, and Army secretary nominee Vincent Viola, the billionaire founder of Virtu Financial, a former Silver Lake portfolio company. Bilden and Viola both cited existing business ties (Viola owns the NHL’s Florida Panthers) as their reasons for dropping out. Puzder opted out after a tape surfaced of his ex-wife telling Oprah that he threatened her. He's since stepped down from his role as CEO of CKE Restaurants, the Roark Capital-owned parent company of chains like Hardee's and Carl's Jr.
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