COMBINE CAPITAL LOBBYING WITH POLITICALLY CONNECTED PEOPLE

“At that time [1981], the first ‘leveraged-buyout firms,’ as private equity was then called, were springing up in New York and Boston, led by groups such as Bain Capital and Kohlberg Kravis Roberts. [David] Rubenstein decided to apply to this line of business what he’d learned in Washington about lobbying. Nobody in private equity had yet thought to choose partners chiefly on the basis of their relationships with government officials and their knowledge of regulated industries. Gary Shapiro, then a lobbyist for the consumer-electronics industry who worked alongside Shaw, Pittman in one lobbying fight against Hollywood, recalls hearing Rubenstein’s pitch when they travelled together to Japan, in the early eighties: ‘His vision was to combine capital with politically connected people whose phone calls are accepted around the world. We laughed at him, like, Yeah, right.’”

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.