“Awwwwwkward”: Meet Ted Cruz’s Tax-Dodging Sugar Daddy
Hedge fund CEO Robert Mercer is all in for the conservative Texas Republican Ted Cruz, and the billionaire will have unusually substantial influence in how his contributions get spent.
But the billionaire also has some baggage—like, the avoiding billions in taxes kind of baggage.
His alleged failure to pay those taxes led to substantial congressional scrutiny in 2014—and it’s not clear the investigation is over.
This, and some of Mercer’s side projects, could present interesting challenges for Cruz’s campaign. Especially since Cruz has been a vocal opponent of those who “give favors to Wall Street” and engage in “crony capitalism.”
On the one hand, Mercer’s support is fantastic for Cruz for all the obvious reasons (having a billionaire in your corner is nice). On the other hand, Mercer’s hedge fund—Renaissance Technologies—recently faced an unflattering congressional investigation, the results of which indicated that it used complex and unorthodox financial structures to dramatically lower its tax burden.This drew scorching bipartisan criticism from investigators on the Senate Permanent Subcommittee on Investigations.
“Renaissance profited from this tax treatment by insisting on the fiction that it didn’t really own the stocks it traded—that the banks that Renaissance dealt with, did,” said Sen. John McCain during a hearing on the issue, per Mother Jones. “But, the fact is that Renaissance did all the trading, maintained full control over the account…and reaped all of the profits.”
In his opening statement for that hearing, then-subcommittee chair Sen. Carl Levin, a Michigan Democrat, said that Mercer’s business avoided paying more than $6 billion in taxes between 2000 and 2013.
Since then, Levin has retired from the Senate and Republican Sen. Rob Portman has taken his place as subcommittee chair. When I called the subcommittee’s Capitol Hill office to see if any investigation into Renaissance was still underway, the person who answered the phone said he couldn’t comment on active investigations. I then asked if that meant the investigation was in fact active.
“I can’t say whether it’s active, I can’t say whether it’s inactive, I can’t even say whether we’ve investigated them,” he said.
Later, Portman’s spokeswoman, Caitlin Conant, emailed to say that the committee doesn’t comment on its work beyond what’s in the public record. Renaissance Technologies didn’t respond to a request for comment on whether they’re currently being investigated.
Given this probe into his company’s books, it’s no surprise Mercer has invested heavily in keeping financial industry watchdogs from gaining political power. However, you’d think this might conflict with his candidate’s populist zeal.
“[M]y criticism with Washington is they engage in crony capitalism,” Cruz told Bloomberg Politics. “They give favors to Wall Street and big business and that’s why I’ve been an outspoken opponent of crony capitalism, taking on leaders in both parties.”
But the Cruz campaign doesn’t seem to see any problems with the arrangement. When I asked Rick Tyler, the campaign’s senior communications adviser, if he was worried about potential conflicts, he said, “No way.”
Mercer has long backed conservative candidates, and he’s spending heavily on Cruz through a new breed of super PACs started by the super rich.
An anonymous Cruz source told Bloomberg on Wednesday that a franchise of pro-Cruz super PACs—formed just this week—will have raised $31 million by end of the day on Friday. There are four super PACs, called Keep the Promise, Keep the Promise I, Keep the Promise II, and Keep the Promise III.
This is not normal; presidential candidates usually give their imprimatur to one such group, which then rakes in contributions and makes independent expenditures to help the candidate. After all, there are legal limits on how much donors can give to presidential candidates, but no limits on how much they can give to these PACs.
One longtime campaign lawyer said the widespread Republican donor buyer’s remorse exists from the 2012 general elections—when a few powerful super PACs spent massive sums of money to get Mitt Romney elected, and were left empty-handed on Election Night. As a result, billionaires are starting their own PACs to fund political campaigns to have more control on how their money gets spent.
It’s worth noting that this explanation doesn’t make sense to everyone. Dan Backer, an attorney who’s worked extensively with Republican and Tea Party groups on campaign finance issues, said he thought having multiple super PACs could make life unnecessarily difficult for everyone involved.
“All you’re doing is multiplying your reporting and compliance burden for no good reason,” he said. “At first blush, it just strikes me as a little weird.”
Regardless, the operating assumption seems to be that having a cadre of super PACs will give mega-donors like Mercer more power over the dynamics of the presidential election. Saul Anuzis, a Michigan Republican operative who started a Mercer-funded super PAC in the 2014 midterms, indicated as much in an interview with Mother Jones. He told the magazine that he expected to see “more and more super-PACs starting that are donor-centric or district-centric.” In Cruz and Mercer’s case, that prediction seems remarkably prescient.
In 2010, 2012, and 2014 the billionaire spent significant money trying (unsuccessfully) to take out Oregon Democratic Representative Peter DeFazio, who has made his support of higher Wall Street taxes a signature issue. And DeFazio has used the fact that he’s a Mercer target to burnish his fiscal-progressive bona fides.
Mercer helped Lee Zeldin defeat former Securities and Exchange Commission prosecutor George Demos in a 2014 Republican House race primary. Mercer also helped Zeldin win the general election, where he defeated a Democratic incumbent who was a vociferous defender of Dodd-Frank.
But his areas of interest are broader than just elections. He singlehandedly paid for a $1 million TV ad campaign opposing the so-called Ground Zero Mosque. And his affinity for conservative causes seems to go back to his early days doing research for the Kirtland Air Force Base’s weapons lab in New Mexico.
Mercer hinted at his political evolution in a 2014 speech he gave to accept the Association for Computational Linguistics lifetime achievement award. He described rewriting a computer program so that it worked more efficiently, and then said that his bosses at the lab decided to just make the program do more complicated computations.
“I took this as an indication that one of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget, which has left me ever since with a jaundiced view of government-financed research,” he said.
Excepting Zeldin, Mercer’s chosen candidates haven’t fared particularly well. The billionaire spent $1 million to help pay for the 2012 Republican National Convention, and also gave Karl Rove’s Crossroads GPS significant funds to try to boost Republicans’ fortunes. And he spent $200,000 on Wendy Long’s Senate race. Who’s Wendy Long, you ask? Right.
There’s a kind of funny flip in the media narrative here, too. After Cruz announced that he would run, a Politico sub-hed blared that he was “months behind his competitors in recruiting mega-donors and bundlers.” If the storied $31 million materializes, then those concerns were probably meritless.
But, to paraphrase the poet, with new money comes new problems. And it remains to be seen how a cozy alliance with a guy whose hedge fund allegedly dodged $6 billion in taxes could play out for the senator.
By: Betsy Woodruff, The Daily Beast, April 10, 2015
“Can America Stand Rand?”: Cranking Up His ‘Libertarian’ Campaign
Platitudes typically litter the announcement speech of every aspiring president, and Rand Paul’s address in Louisville today was no exception. “We have come to take our country back,” he thundered—or tried to thunder—“from the special interests that use Washington at their personal piggy bank.”
Exactly what those special interests might be, he neglected to say — although they probably don’t include the oil or coal lobbies he tends to favor. He went on to rant against “both parties” and “the political system,” not to mention “big government,” deficit spending, and the federal debt. Naturally he prefers “small government” because “the love of liberty pulses in my veins.”
Yet Paul delivered these encrusted clichés with impressive energy, to an enthusiastic crowd featuring enough youthful and minority faces sprinkled among the Tea Party types to lend a touch of credibility to claims that he is a “different kind of Republican.” Speaking about urban poverty and education, the Kentucky Republican even name-checked Dr. Martin Luther King, Jr. — a gesture that too many elected officials in his party, especially from the South, still find difficult. (His father Ron Paul, watching from the audience, may have stifled a chuckle, recalling how his racist newsletters regularly excoriated the late civil rights leader as a “pro-communist philanderer” and worse, while blasting Ronald Reagan for signing the bill that made King’s birthday a national holiday.)
Appealing to younger and minority voters, Paul wisely emphasized his ideas about cutting back the machinery of surveillance and incarceration. Likewise, he kept the required paeans to economic “freedom” sufficiently vague to avoid alienating potential supporters, like students who might not appreciate his hostility to federal loans and grants, and families whose survival depends on food stamps and unemployment benefits that he would slash.The upside of a Paul campaign may be that his dissenting perspective on issues such as Iran, Cuba, and the surveillance state brings a small degree of sanity to the Republican primary debate. Although he parroted much nonsense about the Obama administration’s foreign policy, he dared to say that the goal of diplomacy “should be and always is peace, not war.”
Equally beneficial would be a frank discussion of the libertarian delusions that underlie his economic platform – and the real effects that such policies would have on American communities, families, and workers.Paul still hates the auto bailout, although killing it would have cost another million jobs. While he rails against deficit spending and Obama’s economic stimulus, the clear consensus is that unemployment would have soared without those measures. No doubt he agreed with his father’s repeated warnings that government spending would lead to “hyperinflation” and depression, but we have seen precisely the opposite: a revived economy, recovering employment, and inflation that remains too low to worry any sane person.
Among Paul’s easiest targets today was the IRS, which he promises to diminish or even abolish with his favorite “new idea,” a flat tax. That was a fresh proposal, perhaps, back when right-wing academics Robert Hall and Alvin Rabushka unveiled it in a 1983 book titled Low Tax, Simple Tax, Flat Tax. There is no reason to believe that Rand Paul’s flat tax would differ significantly from theirs in design or impact; namely, to worsen inequality, raising the burden on the poor and middle class while benefiting the very rich.
Mocking the federal proclivity to spend more than the IRS collects, Paul chortled today, “Isn’t $3 trillion enough?” But while he promises to “balance” the budget, his 17 percent flat tax wouldn’t collect even that amount — which means enormous cuts in every budget sector, from education and infrastructure to defense.
Authors Hall and Rabushka described their flat tax as “a tremendous boon to the economic elite” and noted, candidly, “it is an obvious mathematical law that lower taxes on the successful will have to be made up by higher taxes on average people.” We shall see whether Paul is as honest as the authors of his tax plan.
By: Joe Conason, Editor in Chief, The National Memo, April 7, 2015
“Ted Cruz, Christian Warrior Supreme”: Hell-Bent On Outhustling Everybody For Allegiance Of Evangelical Crackro-Americans
Even as we learn that on at least one occasion the scion of the Ultimate WASP Family, Jeb Bush, identified himself as “Hispanic,” an actual Hispanic proto-candidate for president, Ted Cruz, seems hell-bent on outhustling everybody for the allegiance of conservative evangelical Crackro-Americans. Per a report from Politico‘s Alex Isenstadt, Cruz ran the first campaign ads of the cycle over Eastern Weekend on programs (especially the latest biblical docum-drama, A.D. The Bible Continues, which premiered last night) with special appeal to Cruz’s fellow Southern Baptists. Cruz’s staff was very open with Isenstadt about their candidate’s dedication to Bible-thumping:
Ted Cruz’s aggressive pursuit of the evangelical vote began with a deliberate choice of venue for his presidential announcement two weeks ago: Liberty University, which bills itself as the largest Christian university in the world.
The Texas Republican senator’s strategic play for Christian conservatives comes into even sharper focus this weekend as he rolls out the first television ad of the 2016 race. Titled “Blessing,” the commercial is aimed directly at evangelical and social conservative voters in early voting states, timed for Easter weekend and slated to air during popular Christian-themed programming.
It’s an exercise in narrowcasting that telegraphs exactly how Cruz intends to win the GOP nomination against better-funded and better-known rivals. His advisers say the Liberty University backdrop, the TV ads and even his recent two-day tour of Iowa are all part of a detailed blueprint designed to tap into the power of two distinct GOP wings — evangelicals and the tea party movement.
Since probably about 80% of these two “wings” overlap, it’s an even narrower casting than Isenstadt’s account indicates. But there’s no question the Texan doesn’t have the luxury of being able to rely on any subtle dog-whistling. Mike Huckabee, after all, is an ordained Southern Baptist minister who’s been working this particular audience for eight years. Rick Perry has deep Christian Right roots. Rick Santorum is an accomplished veteran of the campaign to build counter-cultural ties between conservative evangelicals and “traditionalist” Catholics. And Bobby Jindal’s tongue has been lolling out for about a year now in his relentless pursuit of the mantle of the Christian Right’s very best friend.
So Ted’s got to just come right out and say things others may just imply. One indicator of how it’s going may well be the extent to which he deploys the powerful but perilous weapon of his deranged father, the Rev. Rafael Cruz. In “Blessing,” he plays the bit role of a drunken would-be deadbeat dad saved by Jesus. If Rafael starts speaking in his son’s ads, Ted’s campaign to become the Christian Warrior Supreme is either going really well or really badly.
By: Ed Kligore, Contributing Writer, Political Animal Blog, The Washington Monthly, April 6, 2015
“Give Up, Evangelicals”: The Republican Party Isn’t Going To Help You
Evangelicals are not thrilled about a third coming of Bush. Concerned that former Florida Governor Jeb Bush will receive the GOP nomination thanks to his credit with the party establishment, Evangelical leaders around the country are in talks “to coalesce their support behind a single social-conservative contender,” The New York Times’ Trip Gabriel reports. Evangelicals do not believe that Bush “would fight for the issues they care most about: opposing same-sex marriage, holding the line on an immigration overhaul and rolling back abortion rights,” and fear that another bruising round of Republican primaries could lose the GOP the presidential race by failing to unite the party’s base.
Evangelicals have good reason to be worried. Despite Evangelicals’ willingness to throw their support behind establishment candidates—they enthusiastically voted for Mitt Romney and John McCain—the United States seems to resemble the Evangelical vision less and less. Since the mobilization of the Christian right as a useful voting bloc back in the 1980s, Evangelicals have enjoyed careful courtship from the Republican establishment, as evident in Senator Ted Cruz’s mating dance with right-wing Christians at his Liberty University announcement speech on Monday. But despite being Republicans’ “biggest, most reliable voting bloc,” in the words of Republican National Committee faith engagement director Chad Connelly, Evangelicals appear to have received relatively little from their arrangement with the GOP.
Next month, the Supreme Court will tackle same sex marriage, and all signs indicate that the justices will legalize same sex marriage nationally. The last bastion of hope for Evangelicals in such a circumstance would be religious freedom legislation like the bill recently signed into law by Indiana Governor Mike Pence, which would allow, inter alia, Christian businesses to refuse service to gay customers. These laws represent a kind of retreat from calls for gay-marriage bans, a shield of isolation around small enclaves of Evangelical sentiment that were ultimately incapable of winning the larger political fight. Likewise, despite the willingness of GOP candidates to speak to Evangelical concerns about abortion—29 percent of Evangelicals consider it a “critical issue” for our country—Roe v. Wade has not been overturned, and abortion is not illegal in a single American state. Instead, states have taken to fiddling with regulations relating to waiting periods, counseling, invasive ultrasounds, and parental notification in order to construct makeshift de-facto bans. Pornography, despite the best efforts of Evangelicals over several decades, is not banned. Evolution, too, persists in public schools, along with sex-ed; indeed, the only broadly Evangelical-backed political project that seems to have a prayer at the moment is comprehensive immigration reform, the success of which will largely depend upon keeping people like Ted Cruz out of office.
Some Republicans, like former Fox News host Mike Huckabee, are upfront about the fact that Evangelicals have been taken for a ride by the GOP. “They’re treated like a cheap date,” Huckabee told Politico during a 2013 interview, “always good for the last-minute prom date, never good enough to marry.” Evangelicals are always game to hit the polls, in other words, when the GOP needs to pull out a win: but that doesn’t necessarily mean Republicans will be invested in pushing Evangelical issues once they get into office, or that they’d have any success if they tried.
Faced with the inability of their alliance with the Republican Party to produce much more than militarism and deregulation, neither of specific moral interest to Evangelicals, the Evangelical polity itself has begun to split, with some clinging to the triumphalist rhetoric of the past, in which America was a Christian nation and Christianity was an American religion, while others have moved on to lobbying for cells of legal protection from the country’s rapidly shifting moral landscape. For this reason, Religion Dispatches’ Sarah Posner notes, most Evangelicals would “rather hear the candidates talk about religious freedom, not offer overwrought displays of piety blended with patriotism.”
If Jeb Bush is interested in capturing the Evangelical vote, he could promise to push for laws that protect religiously motivated employers from legal censure should they choose to refuse business to LGBT clients. The fact that these laws have been a struggle even at the state level (Arizona governor Jan Brewer, no fan of same sex marriage, still vetoed such a measure last February, while Utah’s Republican-controlled legislature settled on a compromise earlier this month) suggests that they would be even more of a headache at the national level. But if history has revealed anything about the relationship between Evangelicals and their Republican allies, it’s that the promises made and positions telegraphed during campaigns don’t have to be kept.
Still, it seems that the rift between establishment Republicans and Evangelicals will be injurious to the GOP in the long term. As time passes, leveraging the necessary political force to reverse many of the decisions that most rankle the Christian right, including Roe and same-sex marriage, will become even more challenging, making it less likely that an Evangelical favorite could do much to roll these policies back even if elected. And, as failures on that front continue, Evangelicals will likely keep seeking out alternative candidates to rally around, further fracturing a GOP base already tugged in strange directions by the Tea Party. Any Evangelical darling (Huckabee, for example) would likely turn out unelectable in a national election, meaning that Evangelical success will add up to an easy win for Democrats, and another round of disappointments for the Evangelicals themselves. In short, the romantic alliance that was sold to Evangelicals when the Moral Majority helped deliver Ronald Reagan to the White House appears finally to have unraveled altogether.
Which ultimately might be an improvement for Christian politics. As Kevin Kruse notes in his forthcoming book One Nation Under God: How Corporate America Invented Christian America, the alliance between Christian voters and politicians on the right was largely a calculated product born of plush industrialist funding and the handy rhetoric of the McCarthy era. But with the threat of Soviet aggression dissolved and the political promise of the Republican-Evangelical coalition played out, perhaps Evangelicals will be able to look beyond a frustrating alliance in which their interests were always low priority. The faith and family left, as the Pew Foundation has termed it, awaits their support.
By: Elizabeth Stoker Bruenig, The New Republic, March 31, 2015
“Indiana Takes On America”: Discrimination Against Gays, Religious Freedom And Rewriting The Constitution
The easy part is over. Americans now understand what the Indiana “Religious Freedom” law was intended to do: legalize discrimination by private businesses against homosexuals. It’s not a secret, as Eric Miller of Advance America said. Indiana acted “to help protect churches, Christian businesses and individuals from those who want to punish them because of their Biblical beliefs! Christian businesses and individuals deserve protection from those who support homosexual marriages. A Christian business should not be punished for refusing to allow a man to use the women’s restroom!”
Anti-gay bias and intent to discriminate are itself reasons to oppose the new law. But there’s much more at stake. The organized Right is re-writing the Constitution and the impact will not be limited to gay Americans.
The supporters of the Indiana law are more diverse, intellectually capable, and more widely found across America than we think. Nineteen states have such laws, and not just the Old Confederacy. Liberal Rhode Island has one. The Indiana Catholic Conference supported the law (It “is very important to secure its passage”). The Indiana legislature considered it carefully, had hearings and received pages of testimony from distinguished legal scholars. (The Bill and the Testimony can be found at: The Bill; The Testimony)
There are elements of their argument that most Americans would support. We widely accept that religious organizations and places of worship should be free to practice what they believe. Should a church have to marry people outside its faith and beliefs? Should a Catholic church be legally required to perform a same-sex marriage? Should an Orthodox shul or a mosque be legally required to hire female rabbis and imams? Probably not.
It makes you think. Most Americans would say that some laws, even good ones, don’t apply inside a place of worship. If that is all the Indiana law did, it would not have stirred up the current commotion.
But Indiana went well beyond that. The law extends the inside-the-church exemption to commercial enterprises. Business corporations get the same protection that a church gets.
If you think you’ve heard this before, you’re right. It’s the same argument used to attack Obamacare in the “Hobby Lobby” lawsuit. That time is was about insurance coverage for contraception, but the argument was the same.
And you also heard a variant in Citizens United, where the Supreme Court conservative majority said corporations have the same constitutional free speech rights as do living, breathing people.
The traditional view was that by engaging in business, you agreed to live by the laws of commerce. If not, then religious belief could justify segregation, or refusal to hire or serve women, or Muslims, or Catholics, or Jews. Or gays. There were, and are, a lot of sincerely religious people who would jump at that opportunity. The Indiana law re-establishes the right to commercially discriminate, especially against gays, if that’s your religious teaching.
The Indiana brouhaha illuminates the broader, and more dangerous legal strategy at the heart of Tea Party, right-wing ideology, the personification of corporations. By enlarging the constitutional rights of powerful, wealthy and largely conservative corporations, the Right is diminishing the constitutional rights of most Americans.
It isn’t the least bit “conservative”. It is a radical, un-American, reactionary re-writing of our basic freedoms. We had struck a constitutional balance between private religious observance and public commercial activity. Real conservatives would be looking for a way to reasonably accommodate both interests.
With any luck, what’s going on in Indiana will provoke a better understanding of what the Right is attempting. In the end, Tea Party skepticism of government intrusion on personal liberty is perfectly reasonable. But in this century, our liberties can be equally threatened by rewriting the Constitution to empower corporations that impinge on our liberty with equal effect.
Practice your religion in peace and dignity. Do business without discrimination and bigotry. Sounds easy.
By: Richard Brodsky, Senior Fellow, Demos; The Blog, The Huffington Post, March 29, 2015
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