As Rep. Alan Grayson launches his Senate bid , the Florida Democrat's campaign has been fending off ethics attacks over his involvement in three hedge funds that bear his name, all the while going on the offensive against his primary opponent.
A July 7 letter asking the Office of Congressional Ethics to probe the matter — the second ethics complaint filed against Grayson this week — has the outspoken congressman sparring with fellow Democratic Rep. Patrick Murphy. St. Lucie County Democratic Chairwoman Celeste Bush, who is supporting Murphy's Senate campaign, sent the 16-page letter raising questions about conflicts of interest and alleged violations of federal law and institutional rules. The Grayson-run hedge funds — Delaware-based Grayson Fund LP and Cayman Islands-based funds called Grayson Master Fund (Cayman) Ltd. and Grayson Fund (Cayman) Ltd. — were first exposed by Politico .
House rules and federal law state a member of Congress “may not permit [his or her] name” to be used by an entity that provides professional services involving a fiduciary relationship. But Grayson has maintained the funds offerings are exempt because all the funds investors are "qualified investors" and he has no "fiduciary responsibility" over the funds.
"Alan broke no laws, violated no ethics rules and fully disclosed everything," said Kevin Franck, in a statement to CQ Roll Call on behalf of Grayson's campaign committee.
"Supporters of former Republican Patrick Murphy are on the attack because they can't defend Murphy's conservative record of siding with Wall Street and they know that Alan Grayson can't be bought or bossed around," Franck stated. He also took a jab at Murphy, who has been endorsed by the Democratic Senatorial Campaign Committee, for standing quietly by while Bush led an effort to decertify a liberal group of Floridians supporting Grayson.
In the Murphy campaign's first public statement on the controversy, campaign manager Josh Wolf said the House Ethics Committee "will determine if Cayman Islands Hedge Fund Operator Alan Grayson broke any laws while serving in Congress."
Bush's letter alleges Grayson violated disclosure requirements, though the congressman is not legally required to disclose his funds' investors. "By preventing the public from having any idea where he is putting his money, he prevents the public from being able to evaluate whether any of his official votes may be motivated by his investments, as opposed to what is really in the best interests of the Floridians that he represents," she stated.
Grayson was first elected to Congress in 2008. He launched the funds in 2011, after losing his re-election bid in 2010. At the time, a spokesman touted Grayson's "extensive experience, both in Washington and around the world" as giving him a unique perspective that is "all too rare in the asset management world."
On July 6, the conservative watchdogs at Foundation for Accountability and Civic Trust sent a letter asking the Office of Congressional Ethics to probe Grayson for keeping his name attached to the funds.
According to CQ Roll Call's most recent Wealth of Congress report , Grayson ranked 17th, with a minimum net worth of $26.8 million. Grayson's net worth surged by almost $10 million in 2013, according to the report, and his stake in the Grayson Fund Management Co. was worth at least $5 million.
Related: GOP Gleeful That Grayson’s Getting Into Florida Senate Race Grayson Email May Run Afoul of House Ethics Rules Alan Grayson to Announce Senate Bid Thursday See photos, follies, HOH Hits and Misses and more at Roll Call's new video site. Get breaking news alerts and more from Roll Call in your inbox or on your iPhone.