November 27, 2014
Holdouts: influential players in DC
‘Vulture funds’ give lots of cash to key lawmakers on both side of the aisle
The hedge funds that got a big victory in their long-standing case against Argentina this week at the US Supreme Court play a big role in Washington politics through cash donations to party leaders. And it does not play favourites, doling out cash to both Democrats and Republicans.
During her speech Monday night, President Cristina Fernández de Kirchner blasted “vulture funds” and took aim at judges and politicians for campaigning against the country in its long battle against the creditors she often refers to as “vulture” funds.
Two key recipients of the funds’ largesse that go to both sides of the aisle are senators Robert Menéndez (Democrat — New Jersey) and Marco Rubio (Republican — Florida).
NML Capital — the bondholder that belongs to prominent Republican donor Paul Singer and won the main case against Argentina in Judge Thomas Griesa’s court — has strong ties with Rubio, a conservative Cuban-American. Elliot Management, a hedge fund led by Singer is the second-largest contributor to Rubio’s campaign between 2009 and 2014, with US$117,620, according to the Centre for Responsive Politics (CRP), a non-profit research group that tracks money in US parties.
Menéndez, who is under criminal investigation because of his alleged dealing with two fugitive bankers from Ecuador, has the law firm Lowenstein Sandler as its second-largest campaign-finance contributor during the 2009-2014 period, according to the same political fundraising watchdog.
Lowenstein Sandler represented a satellite manufacturer that took part in the case NML Capital v. the Republic of Argentina. But other names could be added to the list as well.
Senator Mark Kirk, an Illinois Republican who has been a major critic of Argentina and even wrote a letter to Fernández de Kirchner denouncing the deal her government sealed with Iran to investigate the 1994 bombing of the AMIA Jewish community centre, also has ties with the “vultures.”
Kirk has received more than US$95,000 from employees of Elliott Management, according to CRP.
Other letters expressing concern about the country’s ties to Iran are signed by representatives who have received campaign funds from Singer and his associates.
Republican Connie Mack is one of them. A former member of the Tea Party, who authored the Judgment Evading Foreign States Accountability Act to force the country pay the full amount to hedge funds gets lots of cash from Paul Singer. In fact, Elliot Management is his top donor, receiving almost US$40,000.
“It’s proof that the US Congress is losing its patience with Argentina’s non-compliance,” said the American Task Force Argentina (ATFA), an organization which unites holdout hedge funds and that is also financed by Elliot Management.
Elliot Management also gave US$1 million to Restore our Future, a group that supported the presidential candidacy of Republican Mitt Romney.
Since abandoning office last year, Mack became a partner at Liberty Partners Group, a lobbying firm. Liberty Partners pressured other Republican and Democrat representatives not to meet the Argentine lawmakers — from both pro-government and opposition parties — who travelled to Washington last week in order to prove the legal battle against the so-called vulture funds was a state policy.
However, Mack’s efforts appear to have largely failed as Argentine representatives were received by Republican congressman Spencer Bachus, Chairman Emeritus of the House Financial Services Committee, who promised to join forces with Speaker of the House, Democrat Nancy Pelosi to discuss the Argentine case.