Steve Schwarzman Apparently Not Supposed To Do His Job Anymore

What's the use of being besties with the president if you can't help out shareholders in the process?
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By Lishabai Yi (Middle Kingdom Media Ltd.) [CC BY-SA 4.0], via Wikimedia Commons

By Lishabai Yi (Middle Kingdom Media Ltd.) [CC BY-SA 4.0], via Wikimedia Commons

After so many years of addressing the president of the United States in fulsomeapostrophe, Steve Schwarzman now has the relative privilege of getting the guy on the horn whenever he pleases. And if he's in Florida on basically any weekend, Schwarzman can just hop on over a few acres from his Four Winds to Trump's Mar-a-Lago and meet face-to-face.

This is great news for Blackstone Group's clients and investors! Instead having to growl about Hitler to get the attention of the commander-in-chief, Schwarzman can lay down his wisdom right at POTUS's doorstep. This, of course, is the much-envied Icahn method.

But somehow, an executive putting himself in a position to maximize shareholder returns isn't winning everyone's praise:

Robert Weissman, president of watchdog group Public Citizen, said it’s all but impossible for someone like Schwarzman to separate his roles as a corporate expert and as a top executive and major investor in Blackstone.

"The corporate pipeline to the president’s ear guarantees the corruption of American domestic and foreign policy,” Weissman said. "In the ethics vacuum of the Trump administration, Schwarzman’s special role as perhaps Trump’s closest corporate adviser makes it almost inevitable that administration policy will bend to Blackstone’s interests."

What kind of policies are we talking about here? A quick perusal of Blackstone's risk statements in SEC filings gives us some idea. As Politico found, some of these risks are explicitly Trumpian: “President Trump has raised the possibility of greater restrictions on international trade and significant increases to tariffs on goods imported into the U.S., particularly from China,” Blackstone has warned. Also: “President Trump expressed support for legislation ending treatment of carried interest as capital gain.”

It's impossible to say how or even whether Schwarzman has actually moved Trump on these matters. The president's big reversal on Chinese currency manipulation certainly got attention, but Schwarzman has said that China somehow didn't come up in his and other executives' meeting with Trump just three days before the announcement. Here's how a Blackstone flack describes his Oval Office engagement:

“Just as Mr. Schwarzman has assisted presidents from both parties in the past, he has provided his views to President Trump when asked, alongside a long, bipartisan list of business leaders from around the country,” Anderson said. “His only reason for doing so is serving the common good and helping produce positive results for the American people.”

That might assuage ethics watchdogs, but Blackstone investors have every right to be disappointed (or incredulous). After all, what's the point of getting in good with the president if you can't serve your true constituency: shareholders?

Trump’s billionaire adviser stands to gain from policies he helped shape [Politico]

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