Then-Secretary of State Hillary Clinton appears to have sought inside information on a potential European Union bailout as her son-in-law, Marc Mezvinsky, speculated on defaulting Greek bonds in 2012 with CalPERS’ public pension cash as his hedge fund was getting wiped out.
Fox News reported late last week that Secretary of State Hillary Clinton, who served from January 21, 2009 and until stepping down on February 1, 2013 in advance of her run for president, sought “secret info on European Union bailout plans as [her] son-in-law’s doomed hedge fund gambled on Greece.”
A former Goldman Sachs broker, Mezvinsky formed the Eaglevale Partners hedge fund in October 2011 with two ex-Goldman Sachs partners. Eaglevale was incorporated in the secretive tax haven of the Cayman Islands in October 2011, then immediately named Goldman Sachs as its prime broker and banker.
Eaglevale would raise $325 million from CalPERS and others through a “special arrangement” with Goldman Sachs to engage in a “global macro” strategy to seek profit from opportunities in “politically volatile situations.”
Goldman Sachs has donated $5 million to the Clinton Foundation; paid Hillary Clinton $675,000 in speaking fees; was Hillary Clinton’s fourth largest contributor to her 2008 presidential campaign with $407,850; and — via its employees — is the sixth largest contributor to Hillary Clinton’s 2016 presidential campaign with $466,978 in donations.
Goldman has an extremely dicey history of manipulating the value of Greek debt. To help the perpetually insolvent nation qualify to join the euro in 2001, Goldman set up derivative cross-currency swaps with “fictional interest rates.” The structure allowed the Greek government to borrow another $10 billion in debt payable in U.S. dollars and Japanese yen by pretending the Greek treasury had an extra $1 billion in cash.
After the European Union bailed out Greece in 2010 to prevent an international banking collapse, Goldman’s derivative activity was investigated by the U.S. Securities & Exchange Commission, according to Federal Reserve Chairman Ben Bernanke.
The only “situation” Eaglevale seems to have invested in was buying distressed Greek bonds at big discounts. The hedge fund speculated that the European Union would protect bondholders, requiring Greece to slash health and welfare spending.
The same month Mezvinsky started his hedge fund, Gary Gensler, chair of the United States Commodity Futures Trading Commission, which regulates hedge funds, e-mailed Secretary of State Hillary Clinton that a bailout by the European Central Bank could “turn market sentiment” in favor of Greek bonds.
Gensler was former co-head of Corporate Finance at Goldman Sachs, is currently the Hillary Clinton 2016 presidential campaign’s Chief Financial Officer, and expects to be named Secretary of Treasury if Hillary Clinton is elected President.
According to e-mails subpoenaed regarding her use of a non-secure personal server while Secretary of State, Hillary Clinton “kept a sharp eye on intelligence assessing the chances of a bailout of the Greek central bank” in 2012.
Robert Hormats, Under Secretary of State for Economic Growth, Energy, and the Environment from 2009 to 2013 and a former Vice Chairman of Goldman Sachs, shared an extensive e-mail chain with Secretary of State Hillary Clinton during the crisis about the possibility of bailing out Greece. Included e-mails contained classified materials and internal State Department memos about the debt from the U.S. Ambassador to Greece.
Secretary of State Hillary Clinton shared e-mails about the Greek bond restructuring with husband Bill Clinton and son-in-law Marc Mezvinsky. The e-mails were not produced under the original 2014 subpoena regarding the private server, because the State Department had deemed the communications “protected” government communications.
The recently produced e-mails also reveal that Secretary of State Hillary Clinton was sharing “classified information” about how the German government viewed the prospects for a Greek bailout with Clinton Foundation consultant Sidney Blumenthal.
Sharing such inside information with friends and family is a conflict of interest under the United States Office of Government Ethics and is grounds to be “disqualified from working on a particular Government matter.” But more importantly, it may have been a violation of the Securities & Exchange Act of 1934 prohibition on inside trading.
Eaglevale picked up $13 million from the CalPERS public employee pension fund in April 2012 to invest it in distressed Greek bonds. At the same time, Goldman Sachs CEO Lloyd Blankfein and Chelsea Clinton’s former boss Marc Lasry both bought Greek bonds.
Despite all of the work by the U.S. State Department in favor of a bailout that would have been a home run for Greek bondholders, the German government opposed a blanket bail-out and Greek bonds crashed even lower in price. It is believed that CalPERS suffered a 100 percent loss on its investment.