A Major Oil Speculator Is Bankrolling The Latest Karl Rove Attack Ad Accusing Obama Of Raising Prices At The Pump
The latest anti-Obama ad, which blames Obama for rising gas prices, is being financed in part by a hedge fund manager whose firm has engaged in the type of reckless oil speculation that is causing pain at the pump.
Karl Rove’s attack ad network just launched the first major ad campaign of the campaign season against Obama. The commercial, 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 the president 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 reported on 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. Though the documents did not reveal much about the trading strategies of individual firms, the sheer number of oil contracts from noncommercial speculators confirmed reports that excessive Wall Street speculation fueled to the historic oil price spikes in 2008. The commodity markets are still largely unregulated; the speculative-limits mandated by Dodd-Frank have been watered down and won’t even be implemented until next year.
According to regulators, little has changed since 2008. Bart Chilton, a commissioner with the CFTC, explained to ABC News how oil reckless oil speculation is rapidly raising the price at the pump for all drivers:
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. Singer’s hedge fund
To add insult to injury, he’s now blaming President Obama for those prices at the pump with millions of dollars in misleading advertising.