Friday, February 12, 2016

NYT: Alan Grayson's hedge fund work interfered with congressional duties

Posted By on Fri, Feb 12, 2016 at 7:00 AM


click to enlarge PHOTO VIA WIKIMEDIA COMMONS
  • Photo via Wikimedia Commons
For the past year, media outlets like Politico and the Tampa Bay Times have raised questions about U.S. Rep. Alan Grayson, D-Orlando, and his management of a hedge fund, which spurned an investigation into the congressman by the House Committee on Ethics. Now, The New York Times is reporting the extent to which Grayson's two positions mingled:

"The inquiry has become public, but emails and marketing documents obtained by The New York Times show the extent to which Mr. Grayson’s roles as a hedge fund manager and a member of Congress were intertwined, and how he promoted his international travels, some with congressional delegations, to solicit business.

Interviews and the documents show that Mr. Grayson told potential investors in his hedge fund that they should contribute money to the fund to capitalize on the unrest he observed around the world, and to take particular advantage when there was “blood in the streets.”

The emails also show how Mr. Grayson’s work for the hedge fund, which had $16.4 million in assets as of October, at times interfered with his other duties. In August 2015, after Mr. Grayson introduced legislation calling for larger annual increases in Social Security benefits, he signed off on a plan to highlight the proposal at an event in Tampa, Fla., emails obtained by The Times show. But the plan was scuttled, two former aides said, when economic turmoil in China sent stock markets tumbling globally and Mr. Grayson had to turn his attention to the fund."
 
Grayson came under scrutiny last year after it came to light that Grayson managed hedge funds that used his name in their title, which congressional ethics rule prohibit. Two of the hedge funds were based in the Cayman Islands, a notorious tax haven. Grayson has since changed the names of those hedge funds and closed their Cayman Island branches. 

Grayson's hedge fund work also worried his campaign aides: 

"In private emails in June, Mr. Grayson’s aides pleaded with him to close the hedge fund, convinced that its focus on investing in nations hit by political or economic strife, and its ties to the Cayman Islands, a notorious tax haven, sharply conflicted with his image as a scold of Wall Street — even if he had not done anything wrong.

“This is going to be the drip, drip, drip story that never goes away,” Doug Dodson, Mr. Grayson’s Senate campaign manager until the end of 2015, wrote in a June email to Mr. Grayson, saying his political opponents would “try to make you look like a hypocrite and a fraud and not the populist you claim to be.”"

Grayson has consistently denied wrongdoing, blaming Democratic leaders of trying to undermine his run for U.S. Senate. In a statement, Grayson's spokesperson Ken Scudder says: 

"Congressman Grayson rejects both the numerous unsupported assertions and innuendo in the New York Times story. There is nothing in the report that even suggests any improper or unethical conduct. Congressman Grayson never solicited anyone for his investment partnership while in Congress, nor did anyone acting on his behalf. He never used any Congressional information of any kind, whether from Congressional delegation trips or otherwise, in his investments. His investments never interfered with his official duties or his campaigning. The report is rife with factual errors, and our numerous requests for corrections are pending. In any event, the bottom line is that Congressman Grayson has never used his official position to advance any business interests or create a personal gain, and there is literally nothing in the New York Times report that even implies, much less demonstrates, otherwise."

Read the rest of the extensive investigation the Times did here

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