All posts by Gin Armstrong

Trump Treasury pick cultivated close ties to police while running “foreclosure machine”

by Gin Armstrong and Kevin Connor

Trump’s pick for Treasury Secretary is Steven Mnuchin, a former Goldman Sachs executive and hedge fund manager. Mnuchin has been receiving critical coverage for his role as chairman of OneWest, a California lender that became notorious for its predatory foreclosure practices, which disproportionately affected communities of color.

His close ties to the Los Angeles Police Department also deserve more scrutiny – and reveal mechanisms through which Wall Street curries favor with the police.

Continue reading Trump Treasury pick cultivated close ties to police while running “foreclosure machine”

Trump’s Billionaire Club, Part 2: Stephen Schwarzman

Donald Trump’s vague campaign promises to take on the power structure – and some nervousness, from the power structure, about his erratic behavior and racist appeals – have given way to a remarkably close alliance between Trump and financial elites following his election.

The stock market has rallied to all-time highs. Trump has tapped billionaires and mega-millionaires for cabinet seats and key appointments. Hedge fund managers and corporate CEOs are cheering Trump on from the sidelines, eager to reap the spoils from his favored economic policies – deregulation, privatization, and tax cuts. In essence, a new club of financial elites is forming, with Trump at the center, and varying levels of access and benefits conferred upon members.

It will be important for journalists, organizers, and researchers to investigate and map these networks in the months and years ahead. Who belongs to this emergent club? What are their networks – political, business, investment, philanthropic, social? How are they benefiting – or poised to benefit – from Trump administration policies? This kind of research can lay the groundwork for challenges to the power structure that surrounds and enables Trump.

This is the second installment in our Trump’s Billionaire Club series. The first, on John Paulson, is here. If you are interested in contributing research to this project, sign up here.

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Trump’s Billionaire Club, Part 2: Stephen Schwarzman

By Gin Armstrong, Aaron Cantú, and Molly Gott

Stephen Schwarzman is the private equity billionaire in charge of Donald Trump’s Strategic and Policy Forum, a group of CEOs who will advise the president-elect on economic policy.

Schwarzman has known Trump for years, but did not publicly support him during the campaign. Now, however, the president-elect is leaning on him heavily for help in lining up the support of Wall Street and corporate America. The panel is very much Schwarzman’s: he is the chair of the panel and also picked all of its members. That selection process culminated with Trump exclaiming “What terrific people!” as detailed in this interview.

In this role, Schwarzman will have a direct line to the President and could have a heavy hand in influencing the administration’s policies. He is already very excited about the policy inclinations of the new administration; at a recent Goldman Sachs conference, he predicted a coming wave of deregulation and tax cuts that would change the “architecture of the world.”

These policies could also make Schwarzman even more wealthy. He is the CEO of the private equity firm Blackstone Group, a massive investment vehicle which generates profits in large part through the strategic avoidance of taxes and regulatory oversight (more about his investment empire is below). If Trump and Schwarzman have their way, this will get even easier, and even more profitable. Not that he needs the money – he made $811 million in compensation last year, and is worth $11.1 billion.

Schwarzman shares some key personality traits with the President-elect: unabashed lavishness, offensive analogies, and a taste for real estate. One Slate feature on Schwarzman – “The Golden Ass” – described him as a “titan of self indulgence” and detailed his love of $400 stone crabs and his strict no-squeaky-rubber-soled-shoes policy for his house staff. When he threw an infamously luxurious party for his 60th birthday party, Donald and Melania Trump were among the guests. The $3 million dollar affair treated guests to performances by Rod Stewart and Patti LaBelle and a large portrait of Schwarzman, which usually hangs in his living room, was on display.

Epitomizing the wisdom that money cannot buy class, Schwarzman equated the timing of a 2008 business deal to being a “noodle salesman in Nagasaki when the atomic bomb went off.” In 2010 he compared President Obama to Hitler over a potential tax increase on private equity firms like Blackstone. He eventually apologized for that one, calling it an “inappropriate analogy.”

As for real estate, Schwarzman told The New Yorker; “I love houses. I’m not sure why.” The billionaire has acquired over $100 million in personal property around the world including estates in East Hampton and Saint-Tropez, a beachfront villa in Jamaica, and a sprawling Park Avenue apartment that was once owned by John D. Rockefeller Jr., where his neighbors include Steven Mnuchin, Trump’s Treasury Secretary. He also has a 11,000 square foot mansion in Palm Beach, a favorite location among his finance industry colleagues, where he was busted for using 7.4 millions gallons of water during a record dry season in the region.

Continue reading Trump’s Billionaire Club, Part 2: Stephen Schwarzman

Trump’s Billionaire Club, Part 1: John Paulson

Donald Trump’s vague campaign promises to take on the power structure – and some nervousness, from the power structure, about his erratic behavior and racist appeals – have given way to a remarkably close alliance between Trump and financial elites following his election.

The stock market has rallied to all-time highs. Trump has tapped billionaires and mega-millionaires for cabinet seats and key appointments. Hedge fund managers and corporate CEOs are cheering Trump on from the sidelines, eager to reap the spoils from his favored economic policies – deregulation, privatization, and tax cuts. In essence, a new club of financial elites is forming, with Trump at the center, and varying levels of access and benefits conferred upon members.

It will be important for journalists, organizers, and researchers to investigate and map these networks in the months and years ahead. Who belongs to this emergent club? What are their networks – political, business, investment, philanthropic, social? How are they benefiting – or poised to benefit – from Trump administration policies? This kind of research can lay the groundwork for challenges to the power structure that surrounds and enables Trump.

This piece, on Trump donor John Paulson, is our first contribution to this effort. If you are interested in contributing research to this project, sign up here.

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Trump’s Billionaire Club, Part 1: John Paulson

By Gin Armstrong and Molly Gott

While Donald Trump was campaigning for president, many prominent Wall Street Republicans refused to publicly support him. One notable exception was John Paulson, the billionaire hedge fund manager famous for making $4 billion by betting that the housing market would collapse in 2007. Paulson is the founder of Paulson & Co., a New York City-based hedge fund that manages nearly $20 billion in assets. When Paulson aligned himself with Trump, he made perhaps the biggest bet of his career.

Now that bet is likely to pay off. Paulson is positioned to wield a great deal of influence over the Trump administration, and he has a wide range of business interests that could benefit from a Trump presidency.  He may also serve as a key bridge between the Trump administration and its Democratic opponents during upcoming legislative battles, since he is one of the top all-time donors to Chuck Schumer, the leader of the Senate Democrats.

For all these reasons, Paulson deserves a great deal of scrutiny in the months and years ahead.

Over the course of the last year, Paulson supported Trump in at least three key ways. Most tellingly, he joined Trump’s economic advisory team, positioning himself to most effectively influence economic policy in his favor. He also donated at least $330,000 combined to Trump’s presidential effort, the Republican National Committee and the National Republican Congressional Committee. And last June, he hosted a lavish campaign fundraiser at the chic La Cirque in Midtown Manhattan. The $50,000-a-head entry fee fell just short of the median annual income for a household in the United States. As a host Paulson paid $250,000.

Trump and Paulson have a long-standing relationship. The president-elect is an investor in three of Paulson’s funds, and kept $15 million there even as the hedge fund manager realized significant losses in recent years. According to his financial disclosures with the FEC, Trump made anywhere from $300,000 to $3,000,000 in profits from those funds.

Before joining Trump’s economic advisory team, Paulson was perhaps best known for making more than $4 billion in profits by betting against subprime mortgages during the 2007 housing market collapse. Much of this profit was the result of a rigged bet manufactured by a few well-connected players, including Goldman Sachs. Paulson and his staff worked with banks to create packages of subprime mortgage securities (known as Collateral Debt Obligations or CDOs) that were known to be bad and thus designed to fail. The banks then sold those bad CDOs to unsuspecting (i.e. less connected) investors so that Paulson could bet against them.

More recently, Paulson has set his sights on Puerto Rico. Paulson & Co. is one of dozens of “vulture funds” that bought up Puerto Rican debt with the hope of profiting off the island’s economic crisis, which has spurred massive cuts to healthcare and public transportation services, as well as the closure of 100 schools.  Paulson himself has been the most outspoken advocate of turning Puerto Rico into a luxurious tax haven for the 1%.

While Puerto Ricans are leaving their homes for the mainland at a historic rate because of worsening poverty and unemployment, Paulson is attempting to lure millionaires to the island. In 2014, he co-organized a conference aimed at convincing the ultra-wealthy to move to there. It emphasized not only Puerto Rico’s generous tax loopholes for the super-rich, but also its other amenities, including white-sand beaches, pleasant temperatures year round, luxury apartment buildings, and private international schools that send their students to Ivy League colleges. In his presentation, he predicted that Puerto Rico would become “the Singapore of the Caribbean,” referring to the infamous Asian tax-haven. Hoping to cash in on the influx of millionaires, Paulson has bought up several luxury hotels and condo developments on the island.

Now, Paulson is hoping his bet on Trump will pay off in the form of a newly-lucrative stake in Freddie Mac and Fannie Mae. The mortgage giants were bailed out by the government in 2008 at the ultimate cost of $187.5 billion. The Obama administration later changed the bailout terms so the government received most of the companies’ profits. For years, Paulson and other shareholders have lobbied for some of the profits that are currently going to the U.S. treasury to go to shareholders instead. Freddie Mac and Fannie Mae shares surged after Trump was elected amidst speculation that Trump would enact Paulson’s favored policy plans.

At this point Paulson has even more reason to feel optimistic. The very day Steven Mnuchin was named to head the Treasury Department he suggested that Freddie Mac and Fannie Mae should be privatized. Paulson and Mnuchin are business partners whose dealings go back to at least 2009 when they pooled resources with other wealthy elites to buy up IndyMac, a failing lender in California, and turned into foreclosure machine OneWest. OneWest foreclosed on at least 36,000 homes in California under Mnuchin’s watch.

See more details on Paulson, his network, investments, and investors below. More in-depth information is also available on the LittleSis pages linked below. Continue reading Trump’s Billionaire Club, Part 1: John Paulson

The payday loan family behind Debbie Wasserman Schultz’s deregulatory zeal

The payday loan industry has a new friend in Florida Rep. Debbie Wasserman Schultz, chair of the Democratic National Committee. Wasserman Schultz is co-sponsoring a piece of legislation – ironically titled the “Consumer Protection and Choice Act” – which would delay and eventually block new regulations sought by the Consumer Financial Protection Bureau.

Why is Rep. Wasserman Schultz going to bat for an industry that is bleeding her constituency dry to the tune of $280 million per year? One possibility: Florida’s leading family of payday loan profiteers is a major donor to Wasserman Schultz, and shelled out a series of large contributions to her campaign last June. Perhaps she is repaying the favor.

For Florida-based Amscot Financial, predatory lending is a family business. CEO Ian MacKechnie – who is worth millions – has said that he “sympathizes with his hard-luck customers” and that he wants to “feel like we’re offering valuable services at reasonable prices.”

MacKechnie does not exactly bring a strong ethical record to this work, however. In the 1990s, Amscot Financial pleaded guilty to racketeering charges and agreed to end its insurance business after regulators found that it was tricking customers into buying unnecessary financial products.

MacKechnie runs the business with his wife and two sons, but this is hardly a mom and pop operation. Amscot currently has 235 payday lending locations across Florida, and MacKechnie said he wanted to be the “Walmart of financial service” in a 2009 interview.

To that end, Amscot consistently spends $320,000 per year on lobbying, a total of nearly $3 million over the last 10 years. Their lobbyists include Holland and Knight’s Jim Davis, a former member of the Florida House of Representatives and once included former FL Governor Charlie Crist’s Chief of Staff, Eric Eikenberg.

When it comes to politicians, Debbie Wasserman Schultz is a MacKechnie family favorite. Since 2010, Ian MacKechnie and his family have donated $9,600 to her and $38,850 to her PAC, Democrats Win Seats, placing the family among her top all-time donors.

In two days last June, not long before she co-sponsored the payday lending bill, they cut a series of checks totaling $10,200 to her and her PAC.

The MacKechnies are also fans of Dennis Ross, the lead sponsor of the bill. He has brought in $19,600 from AmScot Financial.

Click through the map below for details on these contributions.

Vulture Fund Feminism

A newly-reported contract between Madeleine Albright’s consulting firm and a major Wall Street hedge fund has only been a footnote in presidential campaign coverage, but it speaks volumes about how elites in both parties find common ground above the fray of partisan bickering and gridlock that tends to dominate the news cycle.

A consulting firm founded and led by Madeleine Albright, who recently made a colorful feminist appeal to women voters on behalf of Hillary Clinton, just landed a new contract with billionaire Paul Singer’s hedge fund, Elliott Management. Singer is a major backer of Marco Rubio.

On Tuesday Politico Influence reported that Elliott Management hired the former secretary of state’s firm, Albright Stonebridge, to advise on the fund’s ongoing rift with Samsung. Politico noted that Elliott had previously hired Albright Stonebridge to support its efforts to wring massive profits out of Argentina.

Continue reading Vulture Fund Feminism

The financial industry gives Geithner some credit

Earlier this week, Bloomberg reported that former Treasury Secretary Timothy Geithner secured a line of credit from JPMorgan Chase, one of the too-big-to-fail recipients of bailout cash.

Geithner is looking to buy in to a new $12 billion fund at Warburg Pincus, the private equity firm where he now works. He reportedly stands to make a 20-30% return on the investment. Although he is not required to disclose the size or purpose of the credit line, a source told Bloomberg that Geithner was among several staff members to borrow money to invest in the fund.

So JPMorgan Chase, one of the banks Geithner bailed out, is about to help Geithner make loads of money.

As Huffington Post’s HuffPost Hill newsletter put it: “It’s almost like the entire Wall Street bailout was just one elaborate scheme to help him pay for heated bathroom tiles.”

We have previously noted that Geithner’s post-Treasury career has closely followed the path taken his mentor, Clinton-era Treasury Secretary Robert Rubin. Both had a brief cooling-off period at the Council on Foreign Relations, a think tank, before taking high-paying Wall Street jobs (optics be damned). For Rubin it was Citigroup. For Geither it is Warburg Pincus, one of the largest private equity firms in the country.

Follow Geithner’s path from regulator to Wall Streeter in this map (click through for a larger version):

Behind the scenes: The push to repeal the ban on oil exports

Since the oil exports ban was repealed on December 18th, 2015, there has been a slow trickle of news detailing the oil industry’s behind-the-scenes campaign to shape this critical policy decision. The most recent piece, from Paul Blumenthal, detailed large, direct corporate donations from oil and gas companies to the Senate Leadership Fund in the last half of 2015 when debate around the repeal was heating up.

The Senate Leadership Fund is a PAC with the mission of maintaining a Republican majority in the Senate and has ties to Senate Majority Leader Mitch McConnell through its founder, Steven Law. Law is a long-time ally of McConnells and previously served as his Chief of Staff.

The newly minted Senate Majority Leader became a powerful ally in the industry campaign, calling the export ban a “relic of the 70s.”

Blumenthal’s exposé is the latest to reveal the oil industry’s multi-pronged effort to secure massive profits with the export ban repeal.

The below map (click through for a larger version) illustrates aspects of this effort:

Continue reading Behind the scenes: The push to repeal the ban on oil exports

All about that data

Well-tended profiles on LittleSis can be chock full of interesting and useful information, but where do you begin? A few months ago we rolled out a new tab designed to help you isolate only the information you want to see. Now it’s time for a formal introduction.

Every profile page for people and organizations now has a ‘Data’ tab.

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This will allow you to filter the information on the profile page by relationship category, entity type, industry, and interlocks with other people or corporations. You can even just use it to view the current board of directors or executives.

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We applied this same tab to lists. Now when viewing a list of individuals you can use the data tab to sort the list members by entity type, industry, and common interlocks. For example, there are 373 names on the Obama 2012 Bundlers list. You can now use the data tab to more precisely filter those connections.

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Super cool feature alert: When in the data tab, use the drop down menu from the ‘Lists’ box to see how many individuals are on different lists across the database. Select a list and the individuals connected between the two lists will show up.

List interlocks

You can click the “link” button to link to this filtered view of the data. Or if you want to work with the data in a spreadsheet format, click “Export CSV.” The data from that view will automatically download, and you’ll be able to mark it up and analyze it to your heart’s content.

Oligrapher updates: home page, interlocks, and more

We have some exciting updates to share about Oligrapher, the LittleSis power mapping tool.

First, it has a brand new home page. Check out all of the amazing visualizations created with Oligrapher since we introduced the tool last year, create a map or sign up for an account, and share the page far and wide! Map all the graft…with Oligrapher.

And some new editing features:

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Continue reading Oligrapher updates: home page, interlocks, and more

A special holiday treat for analysts!

Our lead developer and co-founder Matthew Skomarovsky gave us all a special holiday gift from our wish list. Our relationship categories have expanded to include… [drum roll] …hierarchies!

Yes, you can now add hierarchical relationships between organizations, a critical tool for mapping out winding and convoluted corporate structures. To add a hierarchy to an organization’s profile just add a relationship as normal and select ‘hierarchy’ from the menu of choices.

All existing child/parent hierarchy data was converted to this new relationship format and these relationships will now load when using Oligrapher, our power mapping tool.

Happy hierarch-ing analysts!

Current analysts: Be sure to re-bookmark the LittleSis bookmarklet in order to have this relationship category show up when editing.