In Romney's Super Pac, the Hedge Fund Mavens Come Out to Play

PHOTO: Paul Singer, right, has a conversation with GOP presidential hopeful Mitt Romney, left, during a forum of the Foreign Policy Initiative.Chip Somodevilla/Getty Images
Paul Singer, right, has a conversation with GOP presidential hopeful Mitt Romney, left, during a forum of the Foreign Policy Initiative.

The Super Pac that's been working to get Mitt Romney the GOP nomination raised $30 million last year, and 10 percent of it came from just three guys who run hedge funds in New York City.

Paul Singer, Robert Mercer and Julian Robertson each donated $1 million to the Super Pac Restore Our Future, which can raise and spend unlimited amounts of money in support of Romney. They are the top donors to the group; two other wealthy donors, John Paulson and Edward Conard, were already reported to have given $1 million each as well.

The Super Pac is the ideal body of influence for these benefactors. When candidates raise money for their campaigns, the most cash they can take from a supporter is $2,500 (for the primary election and then for a general election, or $5,000 total). But because those rules don't apply to Super Pacs, created in the aftermath of the Citizens United Supreme Court decision, they can solicit giant donations from rich people.

Enter Singer, Mercer and Robertson, all of whom didn't want to comment for this story or said they were too busy to do so.

Singer, the founder of the hedge fund Elliott Management, gave his million to the Pac in the middle of October. Described by associates as a good-humored billionaire with libertarian leanings, Singer was instrumental in the New York effort to allow gays to marry. His gay son married his partner in Massachusetts, where Romney was governor.

"This is not someone who believes in these issues in spite of being conservative," said Ken Mehlman, a former Republican National Committee chairman and re-election campaign manager for George W. Bush, who came out as gay in 2010, worked with Singer on the marriage effort and saw Singer as recently as a couple of weeks ago. "He believes in it because he's a conservative."

Mercer, the head of the giant hedge fund Renaissance Technologies Corp., was briefly in the news before the 2010 midterm elections when Democratic Rep. Peter DeFazio accused him of funding anonymous attack ads against the Oregonian. Financial disclosure documents later confirmed that Mercer had donated to the group that ran the ads.

Mercer, who made his $1 million contribution to the pro-Romney Super Pac in late July, declined, through spokesman Jonathan Gasthalter, to comment on the donation.

And Julian Robertson, whose office said he was traveling through March and was unavailable to talk, was called the "wizard of Wall Street" as he grew his hedge fund, Tiger Management, to become the biggest in the world. Robertson, who sent his million to the pro-Romney Super Pac in late November, is said to be worth $2.4 billion.

Restore Our Future is also getting loads of help from other "free enterprise" masters — such as hedge fund manager Chris Shumway ($750,000), private-equity firm chairman Miguel Fernandez ($500,000), and private-equity firm co-CEO Steven Webster ($500,000) — whose donations were disclosed Tuesday night hours before a deadline.

Romney's friends at the private-equity firm Bain Capital, which he founded, are also helping out. The Super Pac got $250,000 from an "investment professional," $250,000 from someone in "investment management" and $125,000 from a "managing director," according to the FEC filings.

Super Pacs disclose their financial standing and donors only once every three months — in this case, after the first four primaries. The less-than-totally-transparent rules have bothered many campaign finance lawyers, and analysts who say that voters deserve to know who is funding the barrage of negative ads that swing from state to state as the Republican primary trundles along.

Trevor Potter, the former Federal Election Commission chairman who has crusaded against the current finance system by half-seriously advising Stephen Colbert on his own Super Pac, said the new atmosphere was "unhealthy for our democratic system" because the disclosures arrived after four key primaries, they were already outdated and didn't include January fundraising, and are confusing to decipher by ordinary voters.

"The candidates can disavow the negative ads, while secretly hoping they continue and benefiting from them," Potter said in an email from his iPad while traveling outside the United States. "Even when they are demonstratively inaccurate, the candidate can wash his hands of them as they do damage."

That instance happened in the middle of January, when Newt Gingrich said in a statement to the press that the Super Pac supporting him, Winning Our Future, should edit or take down an anti-Romney documentary that had inaccuracies in it about the former governor's time at Bain. The Pac stood by its movie and instead asked Romney to answer questions about Bain.

Potter also pointed to the danger of a candidate being indebted to rich benefactors, in light of a $10 million donation from the Las Vegas casino tycoon Sheldon Adelson and his wife to the Super Pac backing Gingrich. Adelson gave $5 million to the group just before the South Carolina primary, which Gingrich stormed, and Adelson's wife threw in another $5 million before Florida's vote, which Romney won handily.

"Most importantly, we are almost back to the era of pre-Watergate million-dollar-plus donors to candidates," Potter said. "If Mr. Gingrich is elected president as a result of $10 million given by his close friends and supporters, a Las Vegas casino owner and his wife, to a SuperPac run by his former, recent, longtime finance assistant, he will be deeply in their debt — just exactly what the campaign finance limits are designed to avoid. These Super Pacs place the issue of corruption and the potential for corruption from huge contributions squarely on the national agenda."

Other campaign finance lawyers said that the Super Pac system simply allows for more "free speech" in the political arena.

"I've been working on these issues for a long time, and my philosophy is, get more speech, look at public funding as a way to give people who don't have the resources more resources," said Joel Gora, a former American Civil Liberties Union lawyer who worked on the 1976 Supreme Court case Buckley v. Valeo in which the court ruled that no spending limits could be set on candidates. "What you should have is no limits and full disclosure. ... As long as we know where it's coming from and where it's going, that's the best way to do it."