The emergence of Mitt Romney as the GOP’s undoubted frontrunner and the pile-on from his rivals over his time at Bain Capital means many Americans are hearing much more regularly what used to be a fairly obscure term: “private equity.”
Of course, that means the term increasingly gets mentioned in conjunction with words like “Bain,” “lay-offs,” and “vulture capitalism.” And private equity companies want to shed these associations. Fast. On Thursday the industry rolled out a new campaign that it hopes will show it in a more positive light - especially when it comes to political reporters.
The centerpiece of the new campaign, spearheaded by the Private Equity Growth Capital Council is a new website featuring fact sheets and case studies. The Council also aims to hold briefings with national political reporters now writing about private equity for first time as part of 2012 campaign.
“In political campaigns, there is always potential for a collateral effect, so we want to defend against that,” Ken Spain, one of the Council’s communications chiefs, told TPM. “Within the context of political campaigns, things are boiled down to 30-second soundbites,” he continued, stressing that this isn’t about one party or candidate, but about “mischaracterizations aimed at the industry as a whole.”
The Council already claims some success, saying their “aggressive rapid response” has already resulted in their “playing part in over 100 news stories in last three weeks.”
The question of whether the industry benefits from loopholes in the tax code has been in the news since Romney released his tax returns. In private equity, fund managers are generally compensated with both a fee and sizable share of the fund’s profits. Under the tax code, these profits are characterized as “carried interest” and are taxed at the capital gains rate of 15% rather than the 35% rate. TPM asked how the carried interest tax “loophole” would be addressed in the campaign. Spain replied that it should not be referred to as a loophole: “That is the characterization by some, but the capital gains treatment of carried interest is not only appropriate, it has been enshrined in our tax law for over 50 years.”
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