RE:Tom Steyer friend of the earth Bull. Ask the Argentinians....more blather from Dazed. More elitist "guilt".
Tom Steyer believes in American democracy… for now (AP)
BY: Lachlan Markay
April 21, 2014 5:00 am
The former hedge fund of one of the Democratic Party’s most important donors was involved in a scheme to defraud foreign investors out of tens of millions of dollars, according to documents filed in a Texas court.
Farallon Capital Partners L.P., a fund run by Farallon Capital Management, the multibillion-dollar hedge fund founded by Democratic donor Tom Steyer, became a limited partner in a project to build a large shopping mall near Seattle, Wash., in the mid-1990s after it guaranteed a line of credit for the project.
According to the Texas case, Farallon and other parties involved in the deal operated “in conjunction with” foreign-owned corporations in Texas “to defraud a group of over three-hundred German investors out of approximately sixty-million dollars.”
A “Ponzi scheme” in which the companies planning to build what was to be called the Washington Supermall “transfer[red] millions of dollars in funds through ‘loans’ and ‘advances’ to other unrelated entities,” the plaintiffs alleged.
“At the end of the scheme,” the plaintiffs say, “after the money-drained Supermall project was sold in January of 1998, the remaining funds were distributed to the entities that had assisted the [foreign-owned] entities in their scheme, including … Farallon Partners, in improper preferential distributions that ultimately left the German investors with nothing to show for their $60 million investment.”
The case, which was dismissed on jurisdictional grounds—the court agreed with Farallon that it didn’t operate in Texas and hence could not be sued there—is being re-examined by the Republican politicians and activists scrutinizing the record of the billionaire and controversial environmentalist, who has pledged $100 million to help Democrats in this year’s midterm elections.
Another Farallon entity—Farallon Capital Partners L.P.—worked a separate shopping mall project that is also drawing the attention of critics, who say the hedge-fund bought companies and fired workers with little regard for the livelihood and concerns of the unemployed.
Farallon Capital Partners was involved in April 2007 in a joint venture to purchase Mills Corp., a Maryland-based shopping mall developer. “After the acquisition, dozens of Mills employees, including some executives, left the company or were laid off,” Washington Business Journal reported. Other Farallon-backed companies have seen layoffs well in excess of “dozens.”
Farallon and a pair of other financial firms teamed up with the World Bank in 1999 to buy Alpargatas, one of Argentina’s largest textile manufacturers.
Months later, the company laid off about half of its 6,000 employees.
“The company had already been battered during the 1990s by the drastic opening of the Argentine economy which came on top of an ill-advised attempt to diversify,” Latin Trade reported at the time. “This time, however, the idea was not to reduce operations as part of a restructuring, but simply to transfer them to neighboring Brazil to cut costs.”
Farallon’s history of layoffs is liable to spark attention with labor unions, a key Democratic constituency that has already found itself opposed to Tom Steyer’s agenda.
Steyer has vowed to throw his considerable political fortune behind candidates who oppose the Keystone XL pipeline. The pipeline, which an ABC News poll found is “overwhelmingly favored by Americans,” was delayed once again last week by the administration of Barack Obama, for whom Steyer bundled campaign contributions in the 2012 election.
Keystone opponents such as Steyer are “trying to destroy job opportunities for our LIUNA brothers and sisters,” Terry O’Sullivan, general president of the Laborers International Union of North America (LiUNA), wrote in a letter to union members in the districts of congressional Democrats who oppose the pipeline.
Steyer came under scrutiny last year when it was revealed that he still owned shares through a Farallon fund in a top competitor to TransCanada, the company building Keystone.
Steyer, who left day-to-day control of the fund at the end of 2012, said he directed Farallon to divest himself from the company. However, the hedge fund has maintained its stake and stands to benefit from a rejection of the pipeline.
Phil Kerpen, president of the conservative activist group American Commitment, is organizing a campaign to educate voters in the secret financial background of one of the most powerful men in American politics.
“Steyer has a history of ‘environmentally destructive business ventures,’” said a March ad from Kerpen’s group, which quoted from a Washington Free Beacon report on the controversial practices that sparked a divestment movement against Farallon in the 1990s.
Kerpen called Steyer a “shadowy, dirty energy billionaire” in a news release accompanying the video, noting that the opponent of climate change “helped finance the second-largest coal company in Indonesia.”
Kerpen is determined to highlight that conflict, as well as Steyer’s deep ties to the Democratic Party.
“Harry Reid believes the myth that corrupt, dirty billionaires call the shots on the right because in his party it really does work that way,” he said.
Farallon did not respond to a request for comment.
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