Tuesday, April 26, 2016

American Politics - The Super-Wealthy Man's Playground

We all know that Wall Street is a big donor to America's political theatre, an issue that has particular traction in the case of Hillary Clinton who has availed herself of millions of dollars of personal wealth from speeches given to Wall Street firms.  According to OpenSecrets, SuperPACs, those political action committees that supposedly act independently of the candidates that they support, are heavily funded by one particular part of Wall Street; hedge funds.

According to data from the FEC, March 2016 saw six men donate huge amounts of money to SuperPacs and, coincidentally or not, all six are founders of investment firms that manage either private high-risk funds or hedge funds, many of which require million dollar plus investments from their investors.

Here are the big donors:

1.) James (and Marilyn) Simons:  Mr. Simons donated $3.5 million to the Priorities USA Action SuperPAC which supports Hillary Clinton in the first quarter of 2016 and an additional $1 million to the liberal-leaning House Majority SuperPAC as shown on this table:

Mr. Simons, a mathematician, founded hedge fund Renaissance Technologies and, according to Forbes is worth $15.5 billion which puts him at 50th place in America's most wealthy.

2.) Robert Mercer:  Mr. Mercer has donated a total of $530,000 in the first quarter of 2016 with the bulk of the donation ($500,000) going to the New York Wins SuperPAC.  Here is a table showing the rest of Mr. Mercer's donations in this cycle:

Robert Mercer is the co-CEO of the aforementioned Renaissance Technologies.  According to Forbes, in 2015, he was the eighteenth highest paid hedge fund manager with total compensation of $150 million.  He is politically right-leaning and has been one of Ted Cruz's biggest financial backers, donating $11 million to the pro-Cruz Keep the Promise 1 SuperPAC in 2015. 

3.) Donald Sussman:  In the fourth quarter of 2015, Donald Sussman donated a total of $2.5 million to Priorities USA Action SuperPAC which supports Hillary Clinton, the House Majority SuperPAC, a liberal-leaning SuperPAC and Women Vote!, a liberal-leaning SuperPAC that is the independent expenditure arm of EMILY's List, a PAC that supports pro-choice Democratic female candidates.  Here is a look at all of Mr. Sussman's donations in this cycle:

Mr. Sussman is the chairman of the Board of Trust Asset Management and the founder of Paloma Partners and New China Capital Management.  In the 2012 and 2014 election cycles, he was the seventh largest donor, donating a total of $5,891,540.

4.) Paul Singer:  In the first quarter of 2016 alone, Mr. Singer has donated at total of $4,006,891, the lion's share of which went to Conservative Solutions SuperPAC ($2.5 million) which supported Marco Rubio (oops) and Our Principles SuperPAC ($1.5 million) which opposes Donald Trump.  Here are the rest of his donations in this cycle:

His total donations of $15,463,600 in this cycle puts him in first place among all individual contributors.

Paul Singer heads the hedge fund Elliott Management Corporation and has a net worth of $2.2 billion, putting him in 288th place among America's most wealthy.

5.) George Soros:  Mr. Soros has donated a total of $6 million in the last quarter of 2015 to the pro-Clinton Priorities USA Action SuperPAC.  As shown on this table, his donations to this single SuperPAC have totalled $7 million:

Mr. Soros is the chairman and founder of Soros Fund Management and, according to Forbes, has a net worth of $24.9 billion, putting him in 15th place among America's super-wealthy.

6.) Cliff Asness:  Mr. Asness donated $1 million to the Our Principles SuperPAC which opposes Donald Trump in the first quarter of 2016.  Here is a table showing the rest of his donations in this cycle:

Like Mr. Singer, he donated $1 million to the pro-Rubio Conservative Solutions SuperPAC.

Mr. Asness is the co-founder of AQR Capital Management and was the founder of Goldman Sachs' Global Alpha Fund.  

To give you a sense of the control over American politics that these six gentlemen have, here is a list of the fifteen largest individual donors in the current election cycle:

Five out of six of the donors named in this posting appear in the top fifteen list.  In addition, here is a graphic showing the political contribution trends for the hedge fund industry since 1990:

So far in this cycle, $74.888 million has been donated to both the Democrats and the Republicans by the hedge fund industry, already well above the $52.5 million in 2014 and $48.2 million in 2012.

Obviously, SuperPACS are allowing a single industry to dominate political giving.  While the presidential candidates, particularly Hillary Clinton, may claim that they are not in the pockets of Wall Street, the donations pattern in the 2016 cycle would suggest otherwise.  Donations by America's hedge fund management billionaires would suggest that they will be expecting co-operation from Washington if and when the next financial crisis takes root.

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