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Eric Cantor’s Glaring Conflict Of Interest

When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations — it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.

“If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries,” said Matt Koppenheffer, who writes for the investment website the Motley Fool. “Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike.”

The fund hasn’t significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund is up 3.3 percent. Even if an agreement is ultimately reached before Aug. 2, the fund could continue to benefit between now and then from the uncertainty. (One tactic some speculators are using is to “trade the debt ceiling debate” — that is, to place short-term bets on prices as they fluctuate with the news out of Washington.)

Salon’s Andrew Leonard calls the debt ceiling negotiations “Washington’s titanic game of chicken,” and the longer the game goes on, the more skittish the bond markets will become.

“Cantor’s involvement in the fund and negotiations is not ideal,” Koppenheffer said. “I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short. We can only guess how much he understands what’s in his portfolio, but you’d think a politician would know better. It looks pretty bad.”

Cantor spokesman Brad Dayspring noted that U.S. Treasury bonds make up a large portion of the congressman’s pension, and said investment in ProShares ETF serves to balance that investment and to diversify his portfolio. Disclosure forms indicate that Cantor has considerable personal assets, including real estate in Virginia worth up to $1 million, and a number of six- and seven-figure loans to private entities and limited liability companies. So his investment in ProShares ETF represents only a small portion of his overall portfolio — but that share could grow a little larger just over a month from now.

 

By: Jonathan Easley, Editorial Fellow, Salo, June 27, 2011

June 28, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, GOP, Government, Government Shut Down, Politics, Republicans, Right Wing | , , , , , , , , , , , | Leave a comment

David Prosser Probably Had A Very Good Reason For Putting His Hands On Colleague’s Neck

Wisconsin Supreme Court Justice David Prosser seems to have a bit of a temper! And he also seems to maybe have a bit of a history of verbally and perhaps physically attacking women. The latest, in case you haven’t heard, has the conservative justice accused of putting a liberal colleague in a “chokehold.” Here’s the thing: Even the anonymous sources defending Prosser say he put his hands around Justice Ann Walsh Bradley’s neck. They just say it was in self-defense.

Last year, Prosser screamed at a different (female) colleague, reportedly calling her a “bitch” and threatening to “destroy” her. When asked about all that, he blamed her for “goading” him into attacking her. That is classic psycho behavior, but I have to say that I did not expect Prosser to be accused of physical violence. And, you know, I wouldn’t expect “these women keep forcing me to attack them” to continue working as an excuse for attacking colleagues, but I guess I’m underestimating the conservative movement! Because everyone is running with the “Prosser was forced to put his hands on her neck because she ran towards him” story. Fox Nation headline: “WI Judge Prosser Smeared?” Human Events blames “Big Labor” for forcing Prosser to attack his colleagues.

Here’s Ann Althouse’s (a law professor!) defense:

ALSO: People may assume that the man is larger than the woman, but — from what I have heard — Bradley is significantly larger than Prosser. Bradley is also 7 years younger than Prosser, who is 68.

Compelling!

Bradley isn’t accused by anyone of laying a hand on Prosser. The case for Prosser is that Bradley came at him and he pushed her back in “defense,” but everyone seems to agree that his hands did end up on her neck. I don’t really think there’s any justification for that! And attacking women and then blaming them for making you do it is how abusive assholes justify their behavior. Not that I know the facts of this horrible case. But I tend to side with the people who don’t have a history of threatening to “destroy” people, because that is how comic book characters talk.

Anyway, now the right wants to recall Bradley, for attacking Prosser with her huge, terrifying neck.

 

By: Alex Pareene, Salon War Room, June 27, 2011

June 28, 2011 Posted by | Conservatives, Elections, GOP, Politics, Republicans, Right Wing, Wisconsin, Wisconsin Republicans, Women | , , , , , , | Leave a comment

   

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