Hedge Fund Billionaires and Former GOP Megadonors Power New Democratic Super PAC

A new super PAC that says it will spend $75 million to support Democrats in 2020 is funded in large part by billionaires who run hedge funds, including some with a history of supporting Republicans, according to recent filings with the Federal Election Commission.

Pacronym, a super PAC affiliated with the “dark money” nonprofit Acronym, disclosed its fundraising and spending information for the first time on Wednesday night. In the final quarter of 2019, the group raised more than $7.7 million from dozens of donors, including four who gave $1 million or more.

The group’s top donor is Seth Klarman, the billionaire and former GOP megadonor who is CEO of Baupost Group, a Boston-based hedge fund whose investments include liquid natural gas companies Cheniere Energy and Antero Resources. Klarman gave Pacronym $1.5 million on Dec. 27, 2019, according to the group’s year-end FEC filing.

In the recent past, Klarman gave his money to groups that worked to elect Republicans. He gave $300,000 in 2014 to Karl Rove’s American Crossroads super PAC, which spent more than $17 million that year on ads and other expenditures opposing Democrats. It spent the most that year on ads attacking Democratic Sen. Mark Begich of Alaska in his “toss up” race against Republican Dan Sullivan, who ended up winning. In 2016, the group made independent expenditures opposing Hillary Clinton in her race against President Trump.

Klarman has also donated to the Congressional Leadership Fund, which is a super PAC that is closely aligned with Republican House leadership, as well as to a super PAC called Ending Spending that is affiliated with a group focused on shrinking the federal budget.

After the 2016 election, Klarman began supporting Democratic efforts to take control of Congress and defeat Trump. A Sludge review of FEC records shows that he has given maximum contributions to the campaigns of Democratic presidential candidates Pete Buttigieg, Amy Klobuchar, and John Delaney.

Several policies that financial reform advocates have called for would negatively impact the financial industries tied to big Democratic donors. A proposal to close the carried interest loophole that provides a tax break to partners at private equity and hedge funds could directly hit Klarman. A May 2018 report by Public Citizen wrote that super PAC donations to both parties block policies with overwhelming public support such as addressing inequality, establishing a wealth tax, and strengthening white collar law enforcement.

Another hedge-fund billionaire backing Pacronym is Donald Sussman, the founder and chief investment officer of hedge fund Paloma Partners. Sussman, who gave the group $1 million in November, is a prolific Democratic donor. In 2018, Sussman gave more than $6 million to Senate Majority PAC, a super PAC that spends millions to support Democrats in competitive Senate races.

Sussman has not made campaign contributions to any of the Democratic presidential candidates, but he has made donations to a wide range of House and Senate races, including centrists like American Legislative Exchange Council alumnus Rep. Tom O’Halleran (D-Ariz.) and recent party flipper Rep. Jeff Van Drew (R-N.J.), as well as progressives like Marie Newman who is mounting a primary against centrist Rep. Dan Lipinski (D-Ill.).

In September 2019, Sussman’s daughter, Emily Tisch Sussman, said on MSNBC that Democratic primary voters who support Sen. Bernie Sanders (D-Vt.) over Sen. Elizabeth Warren (D-Mass.) are sexist.

Pacronym and its affiliated nonprofit are not backing a Democratic presidential candidate at this point in the race. Instead, the group has been spending millions on anti-Trump ads targeting swing voters in key states. On its website the groups says its ad spending “relies on cutting-edge, real-time message testing and measurement to optimize content and drive results.”

The group is run by Tara McGowan, a former press secretary for Sen. Jack Reed (D-R.I.) and digital producer for Obama’s 2012 campaign. David Plouffe, President Obama’s former campaign manager, is on the group’s board.

Other Pacronym donors the group disclosed yesterday include Michael Moritz, partner at venture investment fund Sequoia Capital ($1 million); Kenneth Duda, founder and chief technology office at software company Arista ($1 million); Mimi Haas, director of Levi Strauss & Co. ($600,000); filmmaker Steven Spielberg ($500,000); and Jim Swartz, co-founder of venture firm Accel Partners ($400,000).