The latest anti-Obama ad, which blames Obama for rising gas prices, is being financed in part by a hedge fund manager who has pumped up the price of oil through excessive speculation.
Karl Rove’s attack ad network just launched the first nationwide ad against Obama. The ad, called “Too Much,” is being aired by Crossroads GPS, a nonprofit controlled by Rove that does not have to disclose a single donor. Despite oil production levels at the highest point in recent years and Obama’s move to open up new areas to domestic drilling, the ad knocks Obama for high gas prices. Unlike ordinary Super PACs, which fall under F.E.C. disclosure requirements, Crossroads GPS is organized as a 501(c)(4), meaning it never has to divulge any donor information.
But thanks to the work of Peter Stone, an investigative journalist with the Center for Public Integrity, we do know one major donor who has given “seven figure” gifts to Crossroads GPS: Paul Singer.
Singer, who’ve I’ve written about several times in the for ThinkProgress, is a wealthy hedge fund manager. His firm, Elliott Management Corporation, speculates in a number of areas. In the past, Singer has been called a “vulture capitalist” for buying the debt of Third World countries for pennies on the dollar, then using his political and legal connections to extract massive judgments to force collection — even from nations suffering from starvation and violent conflicts. A blockbuster Wall Street Journal story in 2006 revealed that Singer’s firm was among several hedge funds that paid lobbyists to gain political intelligence on an asbestos bill working its way through Congress — with the hope of using inside information to profit off of asbestos-related companies. But what makes Singer interesting in the context of this latest attack ad is how his business interests conflict with the message about Obama causing high gas prices.
If anything, Singer should be blamed for high gas prices. Last year, I received a leaked document from the CFTC — the regulatory body that is set up to monitor commodity speculation — revealing the one day oil trading information from 2008. This list of speculators (view a copy of the documents here, a table organizing the information here) shows that Elliott Management is among the top financial firms with the highest volume of trades in the country, up there with Goldman Sachs and Credit Suisse. Currently, most oil speculation is conducted on private exchanges and through investment banks, so the public left in the dark about who is trading the world’s oil supply. The document shows Singer’s firm with bets on over 50 million barrels of oil that particular day.
Bart Chilton, a commissioner with the CFTC, explained to ABC News how oil reckless oil speculation is the root cause of pain at the pump right now:
By Chilton’s calculation, if you drive a car like a Honda Civic, you’re paying $7.30 more than you should every time you fill up — to Wall Street speculators. If your car is a Ford Explorer you’re paying an extra $10.41. For a Ford F150, he says owners pay an additional $14.56 per fill up -or more than $750 a year.
Speculation can play a healthy role in the economy, helping commercial users of oil (like airlines) lock in prices down the road with producers of oil. But a series of loopholes in the law, starting in the early 90s, have allowed the number of noncommercial players to swamp the market, buying up huge numbers of oil contracts with no interest in actually refining or delivering the oil. Instead, these financial barons are deliberating pumping up prices so their oil contracts can be flipped for profit.
Singer is not a bonafide producer or user of crude oil. He’s just a speculator that has gotten rich off of fears of higher prices down the road. To add insult to injury, he’s now blaming President Obama for those prices at the pump with millions of dollars in misleading advertising.