Last week, we learned that after failing to attract enough actual voters to carry off the first-ever privatized presidential election, the 501c4 corporation called Americans Elect abandoned democracy and without a vote or democratic process of any kind started pouring money into the campaign to elect Angus King to a U.S. Senate seat in Maine. Americans Elect took $1.75 million in contributions from just three people and funnelled it in various ways into pro-King ads in Maine media markets. Those three people are:
- Private Capital investor Peter Ackerman
- Hedge Fund manager John Burbank the Third (through a check cut by hedge fund Passport Capital)
- Bloomberg LP owner Michael Bloomberg
We already knew that Peter Ackerman made hundreds of millions of dollars as the right-hand man of Junk Bond King Michael Milken, who earned his money hand-over-fist by engaging in insider trading. Insider trading is the practice of using fat-cat contacts to make trades early, before any other American knows a company is about to hit the big time or bite the dust. By selling to or buying from others before anyone else knows secret information about a corporation, an inside trader gets rich off of duping other people. Thanks to Milken’s various unethical practices, America’s savings and loan institutions crashed, further hurting the little guy in America. Peter Ackerman served as Milken’s assistant while Milken was doing this and walked away with hundreds of millions of dollars of personal wealth.
We already knew that Michael Bloomberg made billions of dollars selling high-priced infrastructure to Wall Street traders, allowing those gain unusually quick access to company information so they could make better trades and make more money than the average American — again by duping the less-wealthy American investors who couldn’t afford Bloomberg’s expensive product. Bloomberg became a multi-billionaire by helping already wealthy corporations get even wealthier by turning small investors into chumps.
Yesterday, AE Transparency completed the picture, unearthing the source of wealth of the Americans Elect funder #3, John Burbank the Third:
Burbank tends to keep a low profile — he may be one of the richest Americans about whom there isn’t enough to say to warrant a Wikipedia article. In 2000 the then-obscure Burbank decided to launch a hedge fund (initially bankrolled with $50,000 in credit card debt), which has become today’s $3 billion Passport Capital. Passport — and Burbank — rocketed to fame and fortune in 2007, when an unusual hedge position it had taken suddenly paid off royally. As bloomberg.com explains:
“Mortgage debt in the U.S. had ballooned about eightfold to $1.4 trillion in 2005 from $181 billion in 1995, according to the Federal Reserve. If a global credit crunch struck, Burbank was sure investors would cease buying subprime mortgages, bringing America’s housing party to an abrupt end [….] To profit from that possibility, Burbank invested in a funky instrument known as a subprime mortgage credit default swap — a CDS that insured the holder against a loss in a pool of high-risk mortgage bonds [….] In 2007, Passport’s swaps paid off when foreclosures on subprime mortgages soared. Burbank personally pocketed $370 million that year.”
In short, Burbank foresaw an impending threat to the American economy earlier than others, and did what any red-blooded American would do: he cashed in on it. This is how Wall Street legends are born in the post-industrial Wild West. Burbank and AECorp founder Peter Ackerman clearly have a lot to reminisce about over brandy and cigars. Ackerman made his own fortune in the junk-bond scandal which nearly destroyed the American savings and loan industry.
Passport Capital has since made untold additional fortunes betting on other harbingers of hard times, including shortages of depleted commodities such as oil, fertilizer, and copper, and on inflation of gold prices by tea-bagger panic. As Burbank told the SkyBridge Alternatives Conference in Las Vegas this year, “I believe the West is bankrupt and failing and it’s just a question of when.” And, presumably, when it does fail Burbank intends to be there to reap outsized rewards.
3 out of the 3 known Americans Elect Funders made huge fortunes duping the American People or, in Burbank’s case, profiting off working-class Americans’ despair. Then they got together to hold a closed-door three-person vote and start using their millions to prop up their own favored candidate for national office under the Americans Elect brand name. Are you an Americans Elect delegate, one of the people Americans Elect said would decide who Americans Elect would support? You weren’t included in the decision. You weren’t even informed.
The next time the people behind Americans Elect start using words like “grassroots,” “democratic,” and “the people’s voice” to describe their efforts, remember this.