Thursday, October 04, 2007

Hedging the Vote$

The article in the New York Times is about the '08 presidential election.... "In Ballot Fight, California Gets a Taste of '08."

It explains there is a statewide ballot initiative to change the winner-take-all 55 electoral vote system and instead to apportion the electoral votes by Congressional district, "potentially giving the 2008 Republican nominee 20" of those votes. And, perhaps the election.

But, let's look at the story behind the story. Statewide California ballot initiative campaigns are very expensive. Who is picking up the tab for each party?

Well, a Republican California lawyer associated with New York's "9-11 Mayor" Rudy Giuliani started the ball rolling for the initiative to move California's electoral-process goal posts. One of Giuliani's top fund-raisers, Paul Singer, a New York City hedge fund executive, ponied-up nearly all the money so far to support the measure.... roughly $170,000.... in order to gather the signatures needed to have it appear on next June's ballot.

The effort to stop the measure in its tracks is being led by the camp of New York Democratic rival, Sen. Hillary Clinton, with the bulk of the $200,000 in costs being paid by Thomas F. Steyer, a California hedge fund executive.

Are you sensing a trend here? Are hedge fund managers just unusually civic minded, or....

Hedge funds are pools of investment monies for the very wealthy that are relatively unregulated by Uncle Sam. And, the industry wants to keep it that way. So, the successful managers are getting cozy with the political powers through campaign donations and other kissing-the-ring maneuvers.

For example, Democratic presidential candidate John Edwards largest donation from a single company was from the employees of Fortress Investment Group.... $167,400 thus far.... a New York-based firm known mainly for its hedge funds. Edwards also "advised" Fortress for a nearly $500,000 fee and had $16 million invested with them as well.

Both Edwards and Fortress are sketchy about what Edwards did for his fee. It might not fit into Edwards campaign mantra decrying the... "two different economies in this country: one for wealthy insiders and then one for everybody else." Edwards definitely isn't everybody else.

But the other presidential candidates have their hedge-hands out also. Christopher Dodd, a Democrat Senator from hedge-fund rich Connecticut, received $175,400 from employees at SAC Capital Advisors hedge fund during the first quarter, also his top source of support from a single company. Dodd as chairman of the Senate Banking Committee has opposed additional hedge fund regulation.

Sen. Barack Obama (D-IL) has hedge fund campaign funding help also. Orin Kramer, general partner of Boston Provident Partners hedge fund in New York, although Obama is co-sponsoring legislation to drastically reduce offshore tax havens including offshore hedge funds.... a popular tax dodge.

The $1.4 trillion hedge fund industry can well afford these political investments. During the 2006 midterm elections its executives and employees accounted for $6 million in campaign contributions, while the investment and securities industry as a whole accounted for $65 million in federal political contributions.

One wonders what Founding Father George Washington would make of this government-for-sale hog trough that are our election and legislative processes.

Washington.... who indebted himself in service to the country to secure our freedoms, and had to borrow $100 in order to attend his own inauguration in New York City.... in grief could only ask of our bartered national soul..... "What happened to my country?"

1 comment:

elgringocolombiano said...

great reporting TH.

Your article is Exhibit #4080 on how we need public financing of the Presidential Campaign. The direct cost of public financing will be very cheap compared to the indirect cost of corporate welfare that ensues in the current system.