Florida Rep. [crscore]Alan Grayson[/crscore] operates a hedge fund which he has described in investment materials as seeking to capitalize off of “turmoil due to economic, political, or natural disasters,” according to a bombshell report from The New York Times.
Grayson, a 57-year-old multimillionaire who has supported the Occupy Wall Street movement, is running for the Senate to replace Republican presidential candidate [crscore]Marco Rubio[/crscore].
Hedge fund marketing materials show that Grayson, who once compared the Tea Party to the Ku Klux Klan, touted his status as a U.S. congressman and his position on the House Financial Services Committee to appeal to investors in his fund, which was registered to the Cayman Islands until his activities came under investigation last year by the House Committee on Ethics.
In materials sent out in June 2013, the Grayson Fund — which is now called the Sibylline Fund — promised to “capitalize on markets in turmoil due to economic, political or natural disasters.”
Other marketing material sent out by the fund used the famous quote from the Rothschild family: “the time to buy is when there’s blood in the streets.”
Grayson, a Harvard educated economist, served in the House from 2009 until 2011. He was re-elected in 2012 and took office again in Jan. 2013. During his voter-imposed hiatus, Grayson set up the hedge fund, which has $16.4 million in assets under management and imposes a two percent management fee.
Emails obtained by The Times show that Grayson’s campaign aides warned him about the pitfalls of operating a hedge fund. But the lawmaker dismissed the advice, saying that quitting the fund would make it look like he had something to hide.
“This is going to be the drip, drip, drip story that never goes away,” Doug Dodson, who managed Grayson’s Senate campaign until the end of last year, wrote in a June email obtained by The Times. Dodson also warned Grayson that his political opponents would latch onto the fund to “try to make you look like a hypocrite and a fraud and not the populist you claim to be.”
“I still think that it would be taken, wrongly, as an admission of guilt,” Grayson replied.
Grayson’s activities threaten to derail his campaign amid the House Ethics Committee investigation, both because they could be illegal and because they undermine his self-promotion as an economic populist. As The Times notes, House rules prohibit lawmakers from holding outside jobs that generate more than $27,495.
Grayson has been a vocal opponent of Wall Street, as indicated by his support for the Occupy movement. But before that, during his first stint in office, he lashed out at a former adviser to then-Federal Reserve chairman Ben Bernanke, calling her a “K Street whore.”
“Here I am, the only Member of Congress who actually worked as an economist. And she’s, this lobbyist, this K Street whore, is trying to teach me about economics,” Grayson said during an Oct. 2009 interview with Alex Jones.
Other emails show that Grayson’s hedge fund work sometimes interfered with his day job.
According to The Times, in Aug. 2015, Grayson introduced a bill that would increase Social Security benefit payouts and had planned to attend an event in Tampa to discuss the proposal. But two former aides told The Times that economic turmoil in China derailed the plan because Grayson had to tend to his hedge fund.
A spokesman for Grayson denied to The Times that the lawmaker had ever let his hedge fund get in the way of official business.
“There has never been any time when Representative Grayson’s investment activities have disrupted any of his work, whether official or campaign-related,” said Grayson spokesman Ken Scudder.