Courtesy of MSNBC, the story of how one Congressman’s election was completely bankrolled by a single Wall Street firm.
Rep. Garrett will now oversee regulatory decisions directly affecting this and similar firms.
Many substantial donations from the hedge fund executives escaped public notice either because they were made late in the campaign (and therefore weren’t reported until after the election) or were funneled through third-party groups, obscure “joint fundraising committees” and newly created political nonprofits that are not required to disclose donors.
The net effect has been to give the hedge funds important new allies at a time they are fending off regulations mandated by the Dodd-Frank financial reform bill and an aggressive Justice Department investigation into insider trading.
A prime example is Rep. Scott Garrett, a little known Republican from northern New Jersey who this week is slated to become the new chairman of the House Financial Services subcommittee on capital markets, a key panel that has direct oversight of the industry. A staunch foe of the regulation of Wall Street, Garrett has threatened to cut funding for the Securities and Exchange Commission and roll back some provisions of Dodd-Frank.
As it became increasingly clear late last summer that Republicans were likely to capture the House, the partners at Elliott Management Corp., a $17 billion Wall Street hedge fund that specializes in distressed foreign debt, mobilized to boost Garrett’s political fortunes. One of the firm’s senior officers threw a fundraiser for Garrett. The firm’s executives and one of their spouses wrote checks totaling $195,800 to two of the congressman’s political fundraising committees, campaign records show.
Of that amount, $45,000 was donated by nine Elliott executives to the congressman’s leadership political action committee Supporting Conservatives of Today and Tomorrow. As first reported by the The Record newspaper, another $150,800 was donated to a newly created entity called the Scott Garrett Victory Committee, which was registered by a GOP fundraiser using a post office box in Athens, Ga.
As a so-called joint fundraising committee that shared its proceeds with the National Republican Congressional Campaign Committee, it was permitted under campaign finance rules to accept donations in excess of the standard $2,400 limit on contributions to individual candidates.
Elliott executives — one of whom wrote a check for $35,000 — ended up providing about 96 percent of all the funds raised by the Garrett committee, according to the review of campaign records by CPI and NBC.
“This is particularly appalling,” said Ellen Miller, executive director of the Sunlight Foundation, a nonprofit group that promotes transparency in campaign finance. “No one in America will believe that Representative Garrett can provide impartial oversight of the hedge fund industry after taking these huge amounts of money from one (hedge fund) company.”