Sunday, November 01, 2015

Why Has Vulture Fund King Paul Singer, Picked Rubio To Be President?


It was treated as huge news Friday evening when Nick Confessore and Maggie Haberman reported that Paul Singer has decided to back Marco Rubio. The media made such a big deal out of it because Singer is one of the biggest financiers of right-wing politics in America. He's contributed many millions of dollars to advance the Republican Party agenda, handing out 6 and 7-figure PAC checks the way normal people might give a $20 contribution through ActBlue (always a mitzvah). He also gives max donations to right-wing candidates, from outright crackpots like Joni Ernst (R-IA) to relatively mainstream conservatives like McCain. And he invested early and heavily in Paul Ryan; he was Ryan's biggest single donor in the 2012 cycle.

Most of Singer's millions in contributions, though, go to and through a interconnected network of shady right-wing SuperPACs. Oddly, his biggest recent contributions-- almost $5,000,000-- have gone to the American Unity PAC, which describes itself as being "focused exclusively on protecting and promoting candidates for U.S. House and U.S. Senate who support freedom for all Americans, regardless of their sexual orientation." Singer's son is gay and this is the big gay right-winger PAC. The biggest recipients of the American Unity PAC's largesse have been Richard Tisei (R-MA), Dan Innis (R-NH), Richard Hanna (R-NY), Mike Coffman (R-CO), John Katko (R-NY), Carlos Curbelo (R-FL) and Bob Dold (R-IL), although the PAC also contributed $125,000 to Rove's American Crossroads, which isn't exactly gay friendly. Other mega-contributions, as you can see in just one of a dozen Open Secrets pages that tracks Singer's contributions, have gone to Crossroads, to Romney's Restore Our Future SuperPAC, to the GOP opposition-research group America Rising, to Boehner's SuperPAC (the Congressional Leadership Fund), to the fake reform/bipartisan operation called EndingSpending, and to the criminal operation disguised as the so-called Progress for America Voter Fund, a nefarious operation that supported Bush's efforts to privatize Social Security and used lies and scare tactics to advertise and build support for the Iraq War. [Reminder: if Bernie and candidates like him are elected, scumbag billionaires like Singer won't have the excess cash laying around to undermine democracy anymore.]

Singer didn't just discover Marco Rubio. He's been sending him money all along. I see a $3,142 check to Rubio back in March of 2010 when the Florida Tea Party got Marco to run against against Charlie Crist for the Republican nomination for the U.S. Senate (Crist switched to Independent the following month; maybe Singer doesn't approve of closet cases). Singer is expected to contribute and raise and bundle millions for one of Rubio's two SuperPACs, Reclaim America and Conservative Solutions. Before Singer came along, Conservative Solutions has gotten the bulk of it's loot from Rubio sugar daddy Norman Braman ($5 million), right-wing Oracle founder Larry Ellison ($3 million), Cuban-born horse enthusiast Benjamin Leon ($2.5 million), LPL Investment Group CEO Mark Casady ($500,000), James Rubright of Privet Fund Management ($500,000), Benny Klepach (through his duty free operator DFASS Group, Travel Retail Group Holdings LLC and Collum’s Administration & Maintenance LLC-- $350,000), as well as from 10 rich wing-nuts who have tossed in $100,000 each, such as Arizona Diamondbacks owner Ken Kendrick's wife Randy. (Trump also wrote Conservative Solutions a $25,000 check.) Aside from Singer, it is widely believed that Israel's GOP agents in America, Sheldon and Miriam Adelson, are about to start investing big money in the easily-controlled Rubio.

So why did I refer to Paul Singer as a "scumbag?" Just because he's funding right-wing candidates and underwriting efforts to destroy American democracy? Well, those are good points, but that isn't why I decided to use such a pejorative term. Singer is a vulture fund predator who buys up the debt of third world countries at pennies on the dollar and then demands that he be paid in full. He preys on the weakest and most vulnerable people in the world whose corrupt and incompetent governments know how to play ball with monsters like Singer. And what Singer needs and wants from his candidates is a commitment that our government not regulate how his hedge funds operate. did the penultimate reporting on Singer last April, terming him "an opportunistic lawyer who has found a niche doing something that most people couldn’t stomach--suing some of the poorest nations in the world. Singer is the pioneer of a strategy called debt vulturism.
A 2012 Fortune profile called Singer “Mitt Romney’s hedge fund kingmaker” and described him as “a passionate defender of the 1% and a rising Republican power broker.” The article reported that in a confidential Jan. 23, 2012 report to his investors, Singer wrote that “income inequality has become a wedge issue.” The Fortune profile continued, “The billionaire shows little sympathy for the plight of the 99%. ‘Resentment is not morally superior to earning money,’ writes Singer.”

Perhaps not surprisingly, recipients of Paul Singer’s cash have gone to bat for him on various legislative issues. Recently, twelve members of Congress-- [corrupt Members from both parties, Matt Salmon (R-AZ), Gary Miller (R-CA), Chris Smith (R-NJ), Dana Rohrabacher (R-CA), Mario Diaz-Balart (R-FL), Ron DeSantis (R-FL), Albio Sires (D-NJ), Ileana Ros-Lehtinen (R-FL), Scott Garrett (R-NJ), Trey Radel (R-FL), Michael "Mikey Suits" Grimm (R-NY)--who received $38,000 from Elliott Management employees, co-sponsored legislation demanding that Argentina’s bondholders receive full compensation, and called for an investigation of Argentina’s ties with Iran-- and Grace Meng (D-NY)]--signed a letter to Attorney General Eric Holder, urging him to side with Singer’s hedge fund in their battle to extract profits from Argentina. The signatories of that letter received a combined $200,000 from Singer and his connected PACs.

Singer has a long history of funding some of the most conservative organizations in the country. Singer’s political reputation earned him the reputation, only half made in jest, of being “to the right of Attila the Hun.” Singer is the chairman of the Manhattan Institute, a Koch-funded rightwing think tank with a regrettable history of shilling for big tobacco, giving voice to climate change denialists, and hosting controversial social Darwinist Charles Murray as a fellow. Through his family foundation, Singer has contributed to conservative think tanks like the American Enterprise Institute, the Koch-backed Atlas Economic Research Foundation, and the Center for Individual Rights. Singer was recently revealed to be a funder of intractable climate change denialist Bjørn Lomborg, having provided nearly a third of Lomborg’s foundation’s revenue in 2013.

...Bloomberg noted, “Singer has repeatedly been labeled a ‘vulture investor’ by the emerging-market countries whose bonds he has bought and by development organizations such as Oxfam International that back forgiveness of poor countries’ debt.” The Guardian described the debt vulture model this way: “Vulture funds operate by buying up a country’s debt when it is in a state of chaos. When the country has stabilized, vulture funds return to demand millions of dollars in interest repayments and fees on the original debt. … It has been 16 years since most of the world began writing off the debts of the world’s poorest countries, but the vulture funds, a club of between 26 and 35 speculators, have ignored the debt concerts by pop stars such as Bono and pleas from the likes of the World Bank and International Monetary Fund to give the countries a break and a chance to get back on their feet.”

The Guardian noted that “according to the World Bank, the top 26 vultures have managed to collect $1bn from the world’s poorest countries and still have a further $1.3bn to collect. … The World Bank has described vulture funds as “a threat to debt relief efforts” and the former, Bush-era US treasury secretary Henry Paulson said: “I deplore what the vulture funds are doing” in testimony before the House of Representatives’ financial committee in 2007.”

Putting vulture fund profits in perspective, The Guardian pointed out that “The $1bn collected by the funds is equivalent to more than double the International Committee of the Red Cross’s entire budget for Africa in 2011. $1bn could fund the entire UN appeal for the famine in Somalia and is more than twice the amount of money raised by Save the Children last year.”

Vulture funds destabilize financial markets, keep poor countries poor just as they are attempting to get out from under debt, and scare off new investors from a country, critics point out. Debt vulturism has been condemned by the United Nations, the governments of the United States, France, Mexico, Brazil, Belgium and Germany, and various religious organizations.

Former Prime Minister Gordon Brown has described vulture-fund payouts as “morally outrageous.” Britain passed groundbreaking laws in 2010 reining in vulture practices.

...A Singer subsidiary’s actions in the Republic of Congo fit this sovereign-debt-acquisition script. Bloomberg reported that “In the late 1990s, Elliott Associates, through another of its subsidiaries, Cayman Islands-based Kensington International Inc., bought $30 million of defaulted Congolese debt at a significant discount, according to legal documents filed by the Congolese government.”  Kensington has litigated in courts around the world to try to claim Congolese assets in payment of the debt. By The Nation’s tally, “Kensington has filed at least fifteen separate lawsuits against Congo and its business partners, in places ranging from the British Virgin Islands to Hong Kong to the United States.” In November 2005, Bloomberg reported, Kensington was awarded $39 million when the U.K.’s High Court ruled that Glencore International AG, the world’s largest commodity trader, should pay the company for two consignments of Congolese oil rather than pay a Congolese government-controlled company.

While Singer was trying to strong-arm the Congolese government for significant profit, the country was in the throes of one of the most significant food shortages in the world, twice ranking top ten in the World Food Programme’s list of Hunger Crises.

As The Nation has commented previously, “Singer is unapologetic about the hardball tactics he pioneered.” Singer disregards the unspeakable damage his fund does to citizens. “Every country has poverty, including the USA,” he told The Nation via e-mail. “Our disputes have always been with sovereigns who can pay but refuse.” He dismisses his critics as “debtors who attempt to curry populist favor by paying just what they feel like paying” and “ideologically driven people and groups who do not realize that capital goes where it is welcome.”

Paul Singer is reported to have earned more than $1.5 billion on his play at Delphi, the troubled auto parts manufacturer that was bailed out by the U.S. government in 2009. Singer’s Elliott Management, along with Silver Point Capital and Dan Loeb’s Third Point, blocked an earlier sale proposed by the Treasury Department, which would have saved 15 of 29 Delphi plants and countless jobs. Holding Delphi at financial gunpoint, the hedge funds were able to extract additional compensation by shuttering additional factories across the country.   Dan Loeb, whose hedge fund also got in on the deal, boasted that “virtually no North American unionized labor” remained after the hedge funds rampaged through the company. In the final bankruptcy deal, Delphi’s 20,000 retirees lost up to 70% of their pensions, an estimated 8,500 workers lost their jobs nationwide, and all but four factories were shuttered.
An amoral, easily manipulated careerist like Marco Rubio is precisely what greed-obsessed billionaires like Singer want to see sitting in the Oval Office. As Confessore and Haberman wrote in their Times piece Friday, "[t]he decision by the donor, Paul Singer, a billionaire New York investor, is a signal victory for Mr. Rubio in his battle with his rival Jeb Bush for the affections of major Republican patrons and the party’s business wing. This week Singer sent a letter to the wealthy right-wing donors in his network describing Rubio as the only candidate who can "navigate this complex primary process, and still be in a position to defeat" Hillary Clinton in a general election. There is only one way the citizens of this country can protect themselves from Singer and his ilk: right here.

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