Skip to comments.Hedge fund manager in Goldman Sachs case is major Dem donor
Posted on 04/16/2010 7:43:50 PM PDT by NormsRevenge
The billionaire hedge fund manager at the center of an alleged fraud hatched at Goldman Sachs, a leading investment bank, has given tens of thousands of dollars to both parties.
Campaign fundraising records show that John A. Paulson, founder and chairman of the hedge fund Paulson & Co., gave $30,400 to the Democratic Senatorial Campaign Committee in June, qualifying him as a major Democratic donor.
He also gave $2,300 to Senate Majority Leader Harry Reids (D-Nev.) reelection campaign in February of last year and $4,800 to Senate Banking Committee Chairman Chris Dodd (D-Conn.) last April, according to records filed at the Federal Election Commission.
But Paulson has also given thousands to Republicans and supported several GOP candidates for president in the 2008 election cycle.
Jim Manley, Reids spokesman, accused Republicans of promoting the issue behind the scenes to distract from the need to pass Wall Street reform.
While I appreciate the fact that Republicans are trying to divert attention by raising this, and kudos to their oppo team for reacting so quickly, but I have one simple question myself, Manley said. Are these same Republicans prepared to vote for Wall Street reform next week or not, because Sen. Reid, for one, is going proudly vote to protect consumers instead of the big banks.
Needless to say, this goes to show that Sen. Reid does what he thinks is right, Manley added. The American people can judge what the effort by Republican to protect Wall Street says about them.
Paulsons support of Democrats, however, may give Republicans ammunition when Democrats bring their financial regulatory reform bill to the Senate floor next week, as planned.
But the argument will gain them only so much political traction because Paulson has poured tens of thousands into Republican coffers.
He gave $28,500 to the Republican National Committee in 2008, raising him to the level as major donor. He also gave $4,600 to Sen. John McCains (R-Ariz.) 2008 presidential campaign, as well as separate $2,437 checks to the Republican Parties of Minnesota, New Mexico, Colorado and Wisconsin.
These states were expected to be presidential battlegrounds when he made the contributions in the late spring of 2008.
Paulson & Co. was mentioned prominently in a fraud action the Securities and Exchange Commission filed against Goldman on Friday.
The SEC alleged that Paulson & Co. participated in a scheme in which Goldman sold subprime residential mortgage-backed securities to investors, such as foreign banks and pension funds, that were expected to lose value.
Paulson & Co. bet heavily against the value of the fund, named Abacus 2007-AC1, which included mortgage bonds it viewed as overvalued, earning millions at the expense of Goldman clients who invested in it.
Paulson & Co. was not named as a defendant in the suit, which was filed against Goldman and a Goldman vice president, Fabrice Tourre.
GOP aides on Friday were insisting the charges against Goldman were a serious problem for Democrats.
Its going to be tough for the president and other Democrats to brand others as they have while the Wall Street behemoth that has lined their pockets with millions is being investigated for fraud without looking like complete hypocrites, one GOP aide said.
Goldman earned between $15 million and $20 million to create and market the fund to investors who did not know that Paulson helped select its holdings and then bet it would lose value, according to the SEC.
Reid seized on the allegations to argue that the Senate should pass a Democratic Wall Street reform bill.
This is also why we need to pass strong Wall Street reform this year, Reid said in a statement responding to the SEC suit against Goldman. When we clean up Wall Street, we will establish clear rules of the road to help keep Nevada families in their homes while protecting consumers, investors and financial institutions.
We will stop banks from becoming too big to fail and end taxpayer bailouts, Reid said. Republicans should stop obstructing our efforts to hold Wall Street accountable so that Main Street can once again prosper.
Paulson gave thousands to other senior Senate Democrats in previous election cycles. He gave $4,600 to Sen. Carl Levin (D-Mich.) and $4,600 to Sen. Max Baucus (D-Mont.) in 2008, according to FEC records.
Paulson also supported two other Republican candidates for president that cycle.
He gave $2,300 to Rudy Giulianis presidential campaign and $2,300 to Mitt Romneys presidential campaign in 2007.
He gave $5,000 to House Republican Whip Eric Cantor's (R-Va.) leadership PAC in 2009 and a $1,000 contribution to Republican Rep. Virginia Foxx (N.C.) in 2008.
Democrats insisted the charges against Goldman would not make more difficult the effort to move legislation.
This crackdown is the product of years of Bush administration and congressional Republicans cozying up to Wall Street and ignoring the interests of Main Street, said Nadeam Elshami, a spokesman for Speaker Nancy Pelosi (D-Calif.). This is why we need a strong bill to rein in the abuses of Wall Street to protect American jobs and pensions, and Republicans will either stand with the special interests or the American people.
fwiw, He spread his or his company’s money around on both sides of the aisle.
Yes they have but the President is the number one on the list of those receiving money from Wallstreet just above the beloved Sen. Chuck Schumer. Sen Gillibrand is the number one recipient of funds specifically from Goldman Sachs.
That is what investors do...they play both sides..even in the market. They could care less who "wins" politically as long as their bets are correct.
That said, in this case it appears that they were backing Rinos and Dems only, artificially propping up a move to fascism and socialism. Once the bets are made, they want a return on their investment. They got it...now it's time to parachute out.
I see another one going "under the bus" which appears to be code for early moneyed retirement.
I’ll bet if you dig hard enough, George Soros’ filthy hands will be found somewhere in that.
The narrative is not that he is a major dem donor, it’s the the wonderful obumber is prosecuting him even tho he is a dem donor.
He is protected. No jail time if found guilty.
Its a set up to show the masses that Obama is serious. He isn’t. He is a corporatist and Marxist. He will sacrifice the middle class. Of course, that is most Freepers.
“Nadeam Elshami” should tell you quite a bit - inholy alliance
Kind of a non-story... “The billionaire hedge fund manager at the center of an alleged fraud hatched at Goldman Sachs, a leading investment bank, has given tens of thousands of dollars to both parties.”
An equal opportunity whore-payer who needs to be behind bars, regardless.
If it were up to me I’d throw the whole government out and draft productive Americans and choose them by lot. Would be a VAST improvement.
Wow, he covered all the bases. But who had the power to make things happen?
Paulson & Company
Alan Greenspan - advisory board member
Hedge fund manager John Paulson has profited more than anyone else from the financial crisis. His $3.7 billion payday in 2007 broke every record, and he made it all by betting against homeowners, shareholders, and the rest of us.
Paulson is the most conspicuous of Wall Streets winners. Paulson & Co.s funds (with an estimated $36 billion under management and growing by the day) were up a staggering $15 billion as the markets teetered in 2007; one fund gained 590 percent, another 353 percent. All this reportedly garnered him a personal payday of $3.7 billion, among the biggest in history.
By scoring returns of this magnitude, Paulson has dwarfed the success of George Soros.
Paulson makes no apologies. He describes in detail how he pulled off the greatest financial coup in recent historya two-year bet that the calamity we are now experiencing would take place. It was a megatrade involving dozens of financial instruments, along with prescient wagers that banks like Lehman Brothers would eventually go under.
A research firm is now calling Paulson the George Soros of derivatives markets, where the bulk of speculation against European debt and the Euro is happening; the Telegraph says that so far “no hedge fund has put its head above the parapet in this destructive trade,” but the rumor is that Paulson is behind it.
If Paulson is the hedge fund king behind the parapet, as rumored in English and reported in Greek, then it would seem fairly likely that Paulson and Goldman partnered — colluded? — to build profitable short positions against Greek debt. That Goldman was shepherding hedge fund client Paulson around Athens in recent weeks would seem to suggest that the bank and hedge fund are working together in Greece.
Paulson and Goldman have partnered before — on the subprime short trades that won them enormous profits in the midst of the housing. Those trades have gotten a lot of attention, but the fact that Paulson and Goldman worked together to make it all happen has received much less ink. The story of Paulson’s investments is detailed in Gregory Zuckerman’s book, The Greatest Trade Ever. Goldman plays a prominent role, setting up the CDOs that Paulson would wager against, and then selling them to investors. The star Goldman trader who placed the bank’s winning bets against the subprime market, Josh Birnbaum, was reportedly in frequent contact with Paulson, at one point encouraging him to back off his bets (perhaps to make more room for Goldman).
Since Paulson was in the room with Goldman (and several other banks) when these CDOs were first conceived, it would seem that the fund had an unfair edge over the investors that would lose their shirt buying the securities. Zuckerman notes that Deutsche Bank suffered losses because it couldn’t find takers; that famous taker, AIG, may have been Goldman’s convenient solution.
These parallels raise obvious questions: was Paulson also in the room with Goldman before it tried to sell Greece on a new way to hide its debt this past November? As a hedge fund client of Goldman’s, did Paulson have special information about Greece’s true debt situation? Are Goldman and Paulson partnering, once again, to profit from the downfall of an entire country/continent?
Um, on the Presidential side he supported McCain, Giuliani, and Romney. So, really, he didn’t support any Republicans.
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