A New York hedge fund company has taken advantage of the Supreme Court's ruling in Citizens United and contributed $100,000 to a Republican super PAC. The head of the company has similarities to Jack Abramoff.
Anthony Scaramucci's private company, Skybridge Capital II LLC, was listed in a disclosure report on Monday as contributing $100,000 to American Crossroads, a Republican-oriented super PAC that makes independent expenditures. In the 2011-2012 election cycle, Skybridge Capital II LLC had given $75,000 to Restore Our Future, a Republican oriented Super PAC supporting Mitt Romney. The firm had also given $25,000 to the Republican Governors Association.
In the past, Scaramucci had made regular maximum contributions to Republicans and is by far the most active donor at the firm he founded. The Citizens United decision held that the First Amendment prohibits the government from restricting political independent expenditures by corporations. As a result, his firm can contribute to super PACs making independent expenditures.
It is not clear there is a benefit from writing a contribution check from one's own firm's account rather than one's personal checkbook. The corporation should not be deducting the contribution as a business expense. But a corporate check does depersonalize it and makes it more difficult to know the individual making the decision. However, in this case, there could be drawbacks if investors worry the political contribution check came from a specific hedge fund rather than the private company account. For public companies, shareholders may complain about what group benefited from the corporate contribution, as happened to the Target Corp.
Many major donors move in both Wall Street financial circles and the political arena. In both, people "want to be made to feel special and privileged, particularly in front of our guests, business associates and clients." That quote describes a great fundraising technique — whether its raising money for a hedge fund, a political candidate or cause, or a new business venture.
The above quote was used by Scarmucci and his business partners in June when they were seeking investors for a new Manhattan eatery. Scaramucci, known as the "Mooch," may be following in the path of Washington, D.C.'s Jack Abramoff, who set up his former Signatures restaurant as a place to relax, enjoy, trade information, raise funds and build relationships. Scaramucci and his investors appear to want a similar place with great food and a cozy clubhouse environment for young entrepreneurs and investors.
Disclosure Note: The author has an investment in one of the firm's hedge funds.