Three Wall Street Billionaires Chip In To Save Angus King
What do Wall Street billionaires Michael Bloomberg, Peter Ackerman, and John Burbank III have in common with Eliot R. Cutler (pictured at left), the former Independent candidate for governor in Maine and a current State Chairman for the Maine United States Senate campaign of Independent candidate Angus King (pictured at right)?
During 2012, all four have had an affiliation with Americans Elect, an organization that has spent more than $800,000 in the past three weeks in support of King's campaign, according to recently filed Federal Election Commission reports. The money has been spent on television ad production, television ad placement on Maine television stations, direct mail, and polling services provided by FoxNews contributor Doug Schoen.
Federal Election law prohibits coordination between Super PACs such as Americans Elect and the political campaigns of any candidate for the Presidency, the United States Senate, or the House of Representatives.
Americans Elect has received donations totaling $1.75 million from the three billionaires since August 8, 2012.
Founder Peter Ackerman, who made his fortune as junk bond trader Michael Milliken's right hand man, contributed $500,000 over a period that began on August 8 and ended on October 1.
New York City Mayor Michael Bloomberg, who got rich providing information services to Wall Street, donated $500,000 on October 4.
John Burbank III, founder of San Francisco based global investment firm Passport Capital, donated $750,000 on October 1 through his corporation. His firm's $3.4 billion portfolio invests globally, and focuses in part on "renewable energy" and new energy technology investments, the sector in which Angus King made his own much smaller fortune. Burbank's firm made it big in 2007 betting against American sub-prime mortgages.
While Bloomberg is well known to the public, and Ackerman has a track record known to many in the political arena who have followed him for years, Burbank is unknown outside the financial world. The "progressive" Irregular Times painted a less than flattering portrait of him earlier this month:
Burbank tends to keep a low profile — he may be one of the richest Americans about whom there isn’t enough to say to warrant a Wikipedia article. In 2000 the then-obscure Burbank decided to launch a hedge fund (initially bankrolled with $50,000 in credit card debt), which has become today’s $3 billion Passport Capital. Passport — and Burbank — rocketed to fame and fortune in 2007, when an unusual hedge position it had taken suddenly paid off royally. As bloomberg.com explains:
“Mortgage debt in the U.S. had ballooned about eightfold to $1.4 trillion in 2005 from $181 billion in 1995, according to the Federal Reserve. If a global credit crunch struck, Burbank was sure investors would cease buying subprime mortgages, bringing America’s housing party to an abrupt end [....] To profit from that possibility, Burbank invested in a funky instrument known as a subprime mortgage credit default swap — a CDS that insured the holder against a loss in a pool of high-risk mortgage bonds [....] In 2007, Passport’s swaps paid off when foreclosures on subprime mortgages soared. Burbank personally pocketed $370 million that year.”
In short, Burbank foresaw an impending threat to the American economy earlier than others, and did what any red-blooded American would do: he cashed in on it. This is how Wall Street legends are born in the post-industrial Wild West.
To put the impact this level of spending in the small state of Maine can have on a statewide election in context, the King campaign has raised only $2 million through the first nine months of 2012. Republican candidate Charles Summers had raised less than $250,000 through the first six months of 2012, and Democratic candidate Cynthia Dill had managed to raise less than $130,000 during the same time period.
Peter Ackerman founded Americans Elect in April of 2010 as a 501 c 4 non-profit. He was joined by founding members of the board of directors Eliot R. Culter, former New Jersey Governor Christine Todd Whitman, Admiral Dennis Blair, Ambassador Steven Bosworth, and Irvine O. Hockaday, Jr. The organization's original purpose was completely unrelated to its current mission as a Super PAC dedicated exclusively to the election of Angus King and no other candidate.
The founding bylaws of Americans Elect reflected this very different original mission:
The purpose of Americans Elect is to create a process for the American people by Internet-based convention to directly nominate qualified persons for President and Vice President of the United States of America for election by the American people in November 2012. The nominees shall run as a coalition ticket responsive to the vast majority of citizens while remaining independent of special interests and the partisan interests of either major political party. Americans Elect will encourage civic engagement by the American people and educate voters about their exercise of direct democracy.
In July 2011, aspirations at Americans Elect were still very high, as the Christian Science Monitor reported:
Funded with at least $20 million, the majority from large, mostly unnamed donors, Americans Elect is vying to become the most serious third-party insurgency since industrialist H. Ross Perot nearly upended the 1992 presidential campaign.
And they're doing it in a decidedly 21st century way by creating an "open source" virtual primary in which the public is invited, via the Internet, to nominate a presidential ticket, ostensibly of moderates, and get the names on ballots in all 50 states.
But the grand "grassroots" experiment failed, due in part to lack of interest from the grassroots.
In March of 2012, Americans Elect board member Eliot R. Cutler was named as a State Chairman of Angus King's Independent Senate campaign in Maine. Three months later, in June of 2012, Mr. Ackerman decided it was time to change the mission of Americans Elect from issue oriented advocacy to candidate specific independent expenditure communications. Presumably, this required a change in the organization's bylaws approved by the full board of directors.
No one outside Americans Elect's current management team knows what became of the $20 million put up to start the organization, or who made it available. The 2010 financial report, previously listed at the organization's website has been removed.
Americans Elect recent FEC filings also give no indication of the organization's financial history prior to August of 2012. Those filings only show donations and expenditures subsequent to August 7, 2012. Americans Elect has failed to file a Statement of Organization with the Federal Election Commission, as all Super PAC independent expenditure committees are required to do.
Put off by the cozy relationship between King's State Chairman Cutler and Americans Elect, the Maine Republican Party filed a complaint against them with the Federal Election Commission in early October. As the Daily Caller reported:
The Maine Republican Party filed a multi-count complaint with the Federal Election Commission Friday, alleging that independent Senate candidate Angus King’s campaign “illegally coordinated” with the super PAC Americans Elect. . .
The basis of the complaint is that Eliot Cutler, a state chair for King’s campaign, is also a member of the eight-person board of directors of Americans Elect. . .
The complaint also states that Americans Elect has not properly registered as a political committee, something required for any organization that spends over $1,000 to influence an election.
“Americans Elect is an organization that is primarily engaged in candidate support activity including for a particular identified candidate has failed to file with, and report to, the Commission as a political committee,” the complaint reads.
The complaint alleges that the coordination comes as a result of King’s falling standing in the polls — recent polls have shown the race between him and Republican Charlie Summers tightening.
“From breaking his promise to ‘never’ run a negative campaign to flip-flopping and accepting special interest PAC money from Washington to now welcoming the same outside groups that he once condemned, it’s clear that Angus King and his wealthy friends are getting desperate,” said Maine GOP Chairman Charlie Webster. “But abandoned principles and sinking poll numbers are no excuse for violating the law which is what Mr. King and his out-of-state supporters appear to have done here.”
“It’s one thing for Angus King to continually put his personal political interests ahead of voters in Maine,” Webster added, “but it’s another matter when those actions violate the law and we look forward to a thorough investigation by the FEC into these illegal campaign ads.”
Cutler told the Daily Caller that he resigned his positition as a member of Americans Elect's Board of Directors at a special meeting held on June 26, 2012. The King campaign also denied that it had "coordinated" with Americans Elect.
Curiously, Mr. Cutler is still listed on the Americans Elect web site as a former member of the Board of Directors.
Officials at Americans Elect may think they are slipping through a loophole in Federal Election law and the complaint filed by the Maine Republican Party may either fall on deaf ears or result in a mere slap on the wrist after the results of the election are known in November. However, it is difficult to imagine that spending $800,000 in support of Angus King's campaign for the Senate can be considered the action of any group other than a political committee. As such, Americans Elect will be required to file a Statement of Organization with the Federal Election Commission. Failure to do so is a violation of Federal Election law.
Hundreds of Super PACS have complied with the Federal Election laws and filed their required Statement of Organization with the FEC. These Super PACS file quarterly Form 3 reports with the FEC. Americans Elect, however, chose to file a Form 5 report on October 5, one which they may not be legally authorized to use.
One possible explanation for Americans Elect's failure to file a Super PAC Independent Expenditure Statement of Organization with the Federal Election Commission is they wanted to withhold information about their actions from Mr. King's opponents until the very last minute, depriving them of an opportunity to respond so close to the election.
Indeed, every aspect of Americans Elect efforts to support the King campaign shows every mark of a stealth campaign meant to be launched as a devastating surprise attack on his opponents. Consider this evidence:
No one outside of the very tight circle of Americans Elect officials and --possibly--the King campaign had any idea that the organization had suddenly morphed from a highly publicized "non-partisan" social welfare organiztion into a highly partisan political attack machine until Friday, October 5, 2012, the day that Americans Elect produced and paid for television ads began to run on Maine television stations. It was not until that day that Americans Elect CEO Khalil Byrd electronically filed an FEC Form 5 providing details of the contributors to Americans Elect and the itemized expenditures of the organization.
Breitbart News has reviewed that first filing document, and has discovered several revealing facts:
No one other than Americans Elect founder Peter Ackerman contributed any money to Americans Elect prior to Monday, October 1, 2012. He donated $250,000 on August 8, $100,000 on September 7, and $150,000 on October 1.
John Burbank III did not donate his $750,000 until Monday, October 1, a mere four days before the first ads supporting Angus King appeared on Maine television stations.
Michael Bloomberg did not donate his $500,000 until Thursday, October 4, just one day before the first ads supporting King appeared on Maine television stations.
No vendor was paid a penny prior to Friday, October 5, the day the television ads ran.
Americans Elect, however, must have incurred obligations to several vendors long before October 5, the day the television ads first ran. Television production timelines can be lengthy--one week to a month, pollsters incur expenses to take polls, and television stations will usually not reserve valuable advertising air time without prepayment.
Many of Americans Elect's vendors, therefore, performed their work long before they received their checks on October 5, 2012, which was the trigger mechanism that caused Americans Elect to file Form 5 with the FEC.
A full copy of the Maine Republican Party's FEC complaint against Americans Elect and the King campaign, which was filed on the late afternoon of October 5, when the pro-King Americans Elect ads first began to run, can be seen here:
Breitbart News has confirmed with the Federal Election Commission that they have received the complaint. A spokesperson for the FEC said that it is prohibited by law from making any further comment while the complaint is being reviewed.
On Tuesday, a conservative Super PAC that has filed the proper reports with the Federal Election Commission, Crossroads GPS, began running ads in the Maine Senate race, as the Associated Press reports:
Sensing an opportunity to keep Maine's Senate seat in Republican hands, a super PAC started by GOP strategist Karl Rove is airing television ads in the state for the first time as part of a $5 million blitz in a handful of states.
The ad airing in Maine criticizes independent candidate Angus King as someone who supported tax increases as governor and also helped turn a surplus into a deficit. King was elected governor in 1994 and served two terms. . .
Crossroads GPS is spending $309,000 on the ad campaign, which began Tuesday. The ad says King managed to turn a $60 million surplus into a nearly $1 billion shortfall. "With this record, Maine can't afford Angus King in the Senate," the ad's narrator says.
As Angus King's slight lead in the Maine Senate race continues to dwindle, the outcome may well be determined by a battle of big money spent by two independent groups--a conservative one that has followed the rules and a liberal one that we may learn after the election has not.