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In Trump, Stephen Schwarzman Found a Chance to Burnish His Legacy
The Blackstone chief executive stuck with President Trump despite the occasional slight, and stopped short of criticizing him even after the Capitol attack.
When Stephen A. Schwarzman arrived at President Trump’s Mar-a-Lago private social club in April 2017, expecting to join a cocktail party to kick off a summit meeting with President Xi Jinping of China, Mr. Trump’s aides turned him away.
Mr. Schwarzman, the chief executive of the Blackstone Group, the giant private equity firm, had helped arrange Mr. Xi’s visit — and thought he was invited. Mr. Trump told his aides that Mr. Schwarzman wasn’t, according to someone who was there.
The Wall Street veteran shrugged off the slight. Never a big player in politics, Mr. Schwarzman had been pulled into the role of adviser on business policy by Mr. Trump only a few months earlier — an opportunity that promised big benefits for Blackstone and a way to burnish his legacy — and he saw little point in complaining.
That steadfast support became a mainstay of his relationship with the White House. But the approach recently backfired, after Mr. Schwarzman’s sympathy for Mr. Trump’s position on the election results during a private call with business leaders and academics on Nov. 6 — details of which were leaked to the media — raised eyebrows among Blackstone investors and other business executives.
In a recent note to employees, Mr. Schwarzman called the Jan. 6 attack on the U.S. Capitol by Trump supporters an “insurrection” and “an affront to the democratic values we hold dear.” But he stopped short of criticizing Mr. Trump directly for inciting the violence.
Blackstone Benefits
Mr. Schwarzman’s reticence is hardly surprising. As an adviser, he gained a level of access to world leaders that helped Blackstone cement a $20 billion investment commitment from the Saudi Arabian government in 2017, a deal worth more than $100 million in annual fees if fully executed. A new trade agreement with China, negotiated in part by Mr. Schwarzman on behalf of the U.S. government and completed last January, promised to further open the country’s financial markets to Blackstone and other investors.
Mr. Schwarzman, who at 74 is the same age as Mr. Trump, also used his deal-making skills when there was no clear benefit to Blackstone. He helped the United States cut a new trade agreement with Mexico and Canada, countries where his firm has limited operations. He flew to Bahrain at the administration’s behest to discuss investment plans the White House had proposed for Palestinian territories. And he personally gave nearly $4 million to Mr. Trump’s inauguration and re-election efforts.
The private equity executive’s involvement with Mr. Trump was “an epic positive” for the country, said Marc Levine, the former chairman of the Illinois State Board of Investment, a pension fund that invests with Blackstone. Mr. Schwarzman was “helping provide some adult supervision for a maniac,” said Mr. Levine, who retired from that role in January 2019.
Over time, the benefits of Mr. Schwarzman’s alliance with Mr. Trump have proved elusive. Nearly four years after the Saudis committed up to $20 billion in Blackstone’s infrastructure fund, only $7 billion has materialized, thanks to sluggish fund-raising from third parties, whose participation was necessary to unlock the Saudi funds. Progress made on the Chinese trade agreement was overtaken by the pandemic.
Mr. Schwarzman, who told people that he felt obligated to help his country if asked, was not dissuaded. He viewed his advisory role as a chance to give back, say colleagues and friends. And after decades on Wall Street, he appeared to find it invigorating to have such a close engagement with public policy.
“His sole objective was to help achieve positive policy outcomes for the American people,” Christine Anderson, a Blackstone spokeswoman, said in a statement.
An Odd Alliance
A lifelong Republican who favors lower taxes and spending, alongside beliefs like the need to preserve women’s reproductive freedom, Mr. Schwarzman had only occasionally gotten involved in the affairs of past administrations. He was not above taking lighthearted shots at what he regarded as wrongheaded Democratic policies during Blackstone’s Monday staff meetings, but his political activity didn’t stretch far beyond reminding Blackstone employees — the firm has a large Democratic contingent — to vote on Election Day, and writing checks to favored candidates.
Mr. Trump was not among them. So when the president-elect called Mr. Schwarzman shortly after his victory in 2016 and asked him to convene a panel of business advisers to discuss jobs and the economy, the executive was surprised, but willing, two colleagues said.
Mr. Schwarzman assembled a team of 15 fellow business leaders and policy experts, including Laurence D. Fink, the chief executive of BlackRock, and Robert A. Iger, then chief executive of the Walt Disney Company. The group tried to talk the president down from some ideas that weren’t backed by data, such as that China was a currency manipulator, The New York Times has reported. It also aired concerns to him about his proposed ban on travel and immigration from predominantly Muslim countries, which was widely disliked in the business community.
Later, when some members of the panel wanted to resign after Mr. Trump’s inflammatory remarks about deadly violence in Charlottesville, Va., Mr. Schwarzman drafted a statement announcing the group’s disbandment and alerted the president’s team — “it was basic courtesy to tell him,” Mr. Schwarzman wrote in his memoir, published in September 2019 — only for Mr. Trump to quickly announce that he was the one disbanding the panel.
In May 2017, Mr. Trump made his first state visit, to Riyadh.
Mr. Schwarzman had been courting a substantial investment from the Saudis for an infrastructure fund that would finance pipelines, roads or other physical assets in the United States. Although the Saudi government was a longtime investor in Blackstone funds, the president’s trip to Riyadh helped nail the $20 billion deal.
Mr. Schwarzman wrote in his memoir that he had played intermediary between President Xi of China, who wanted to better understand the Trump administration, and Mr. Trump. President Trump then asked him to help arrange the Mar-a-Lago meeting, Mr. Schwarzman added — the same event from which Mr. Schwarzman was turned away.
Capitol Riot Fallout
From Riot to Impeachment
The riot inside the U.S. Capitol on Wednesday, Jan. 6, followed a rally at which President Trump made an inflammatory speech to his supporters, questioning the results of the election. Here’s a look at what happened and the ongoing fallout:
- As this video shows, poor planning and a restive crowd encouraged by President Trump set the stage for the riot.
- A two hour period was crucial to turning the rally into the riot.
- Several Trump administration officials, including cabinet members Betsy DeVos and Elaine Chao, announced that they were stepping down as a result of the riot.
- Federal prosecutors have charged more than 70 people, including some who appeared in viral photos and videos of the riot. Officials expect to eventually charge hundreds of others.
- The House voted to impeach the president on charges of “inciting an insurrection” that led to the rampage by his supporters.
He also weighed in on policy with other administration officials, including Steven T. Mnuchin, the Treasury secretary and a longtime friend. “I value Steve’s judgment,” Mr. Mnuchin said, adding that he talked to Mr. Schwarzman more often than to almost any other business leader. He described the executive as “someone who will get on a plane easily and travel if he thinks he can be helpful.”
Although Mr. Schwarzman sometimes spoke with Mr. Trump multiple times in a week, according to people briefed on those calls, the two weren’t always aligned. He tried and failed to talk Mr. Trump out of some of his more extreme positions, say Blackstone colleagues. He called for the continuation of DACA, the immigration program that Mr. Trump wanted to end. He argued, to no avail, that the United States should remain part of the Paris climate accord.
Mr. Schwarzman sometimes joked about why Mr. Trump wanted his input. “Donald listens to me because I’m richer than Donald,” he said to Gerald Butts, who was the principal secretary to the Canadian prime minister in 2017 and 2018, when Mr. Schwarzman was helping to negotiate a new trade agreement with Canada and Mexico, Mr. Butts recalled.
Defending the President
On the morning of Nov. 6, 2020, Mr. Schwarzman joined about 25 chief executives, academics and others on a call to discuss the election results. Though votes were still being tallied, Joseph R. Biden Jr. appeared to have won. Mr. Trump was challenging the results.
Timothy Snyder, a Yale professor who had written a book titled “On Tyranny,” likened Mr. Trump’s actions to a coup d’état.
To Mr. Schwarzman, the notion appeared absurd. “This has been a tough time,” he said, according to a participant who shared details from a transcript of the call. Both the media coverage and the polls had misled people, Mr. Schwarzman said, and as a result, “people generally are skeptical about what anyone’s telling them.”
He argued that the vote counts, which were continuing days after the election, had created a perception problem, especially in places where Mr. Trump appeared to have an early win only for a Biden victory to be declared later. His comments didn’t sit well with some attendees.
“It was 100 percent known in advance that this was exactly what would happen in a place like Pennsylvania,” replied Richard H. Pildes, a constitutional-law expert, according to the participant who had the transcript. Kenneth Frazier, the chief executive of Merck, added that Mr. Trump’s actions were undermining democracy and should be of great concern, recalled attendees.
After Mr. Schwarzman’s comments were leaked to The Financial Times, some Blackstone investors began raising questions, say employees briefed on the calls. Staff members of pension funds, which invest with Blackstone, had previously told the firm’s officials that they wished Mr. Schwarzman would stay away from politics. Now, one pension wanted to know more about what he had said to the other executives and why, and another complained that they didn’t like what they were reading, two Blackstone employees said.
Even as he found himself ensnared in controversy, Mr. Schwarzman declined to criticize the president. It took him until Nov. 16 — more than a week after the election was called by networks — to acknowledge the win at an economic forum. (“It looks like Joe Biden,” he said.)
As Mr. Trump refused to concede, Mr. Schwarzman declined to sign a Nov. 23 letter in which more than 160 chief executives demanded a transition of power. Instead, he issued his own statement that “the country should move on,” adding that “I supported President Trump and the strong economic path he built.” (Jon Gray, Blackstone’s president and a big supporter of Mr. Biden, signed the group letter.)
Mr. Schwarzman also appears ready to move on. After the storming of the Capitol, he told colleagues that he thought the president should be removed. And he is now “ready,” he has said in recent prepared statements, to help Mr. Biden and his team.
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