Despite Paul's Wall Street criticism, hedge fund ranks among top donors

Bloomberg NewsJuly 1, 2014 

Rand Paul Lincoln Dinner

Sen. Rand Paul said, "We cannot be the party of fat cats, rich people, and Wall Street."

BILL LUSTER — AP

NEW YORK — Sen. Rand Paul has preached the political peril of being too close to financiers as he gears up for a likely 2016 presidential bid.

"We cannot be the party of fat cats, rich people, and Wall Street," the Kentucky Republican told the audience at the Freedom Summit in New Hampshire in April. "Corporate welfare should once and for all be ended."

At the same time, the founders and employees of Mason Capital Management, a $13.6 billion New York hedge fund, have become leading contributors to Paul's political aims. The hedge fund has offices in London and San Francisco and offers clients offshore investments through a limited partnership in the Cayman Islands, among other strategies.

Company co-founder Kenneth Garschina has also given $250,000 — the single biggest contribution — to America's Liberty PAC, a so-called super political action committee run by longtime supporters of Paul. He has contributed $15,100 directly to Paul's campaign or to funds the senator controls. Michael Martino, Garschina's co-founder, has given $12,600 to Paul's campaign and funds.

In all, 17 of the company's 33 employees have given at least $75,000 to Paul and funds he controls since he started his first U.S. Senate campaign in 2010, according to Federal Election Commission data compiled by Bloomberg. Mason Capital staff members have been Paul's second-largest source of campaign funds, according to Opensecrets.org, a website operated by the nonpartisan Center for Responsive Politics.

Rand Paul hasn't declared his intent to run yet and isn't a shoo-in for the nomination, but he's in the "top tier" of potential presidential contenders for 2016, said Kevin Madden, a former senior aide to Republican Mitt Romney in his 2012 presidential bid. The freshman senator is buoyed by a base of libertarian and Tea Party followers he inherited from his father, former U.S. Representative and three-time presidential candidate Ron Paul of Texas. Rand Paul is also hoping to pick up some of Romney's Wall Street donors.

"Rand is looking to lots of different places for financial backing and that would certainly be one of them," said Doug Stafford, Paul's former chief of staff, now the executive director of RAND (Reinventing a New Direction) PAC, Rand Paul's leadership committee. "And if he chooses to run, his campaign will be well funded."

Garschina and Martino have built Mason Capital Management in the last 14 years into an international hedge fund with $13.6 billion in gross assets under management as of Dec. 31, according to a regulatory filing. Since the beginning of 2010, Garschina and Martino have personally donated more than $800,000 combined, mostly to Republicans, including the Pauls and others who advocate for smaller government and lower taxes.

In 2009, Garschina made one donation to a Democrat: $2,400 to former Senate Banking Chairman Chris Dodd, Conn., who was weighing new trading and banking rules for Wall Street.

Garschina made few political donations before 2010 and has largely kept out of the spotlight, except for a $2 million contribution last year to the Cleveland Clinic's Digestive Disease Institute where his father-in-law and grandmother both underwent colon surgery, according to a fall 2013 article in one of the clinic's internal publications.

In a brief interview, Garschina hinted at having a libertarian view of the world, though he stopped short of discussing specifics on issues such as taxation and regulation. "I certainly believe in liberty and the constitution, as the founding fathers did," he said. "I don't think any different than most Americans."

Garschina said he likes to avoid publicity. Stafford, who's running Rand Paul's unofficial exploratory bid for president, declined to comment about Garschina's ties to the effort.

"I'm not a very public person and would rather not have something written about myself," Garschina said. His wife, designer Sara Story, and their vacation home outside of San Antonio, Texas, were both featured in an April article of Architectural Digest.

Martino, who declined to comment for this story, keeps an even lower profile. His basic biography includes a degree in political science from Fairfield University, an MBA in finance and international business from New York University and stints at Oppenheimer & Co. and GE Capital prior to founding Mason. He donated $100,000 to a super-PAC supporting Newt Gingrich's presidential run and is on the national council of the American Enterprise Institute, a free-market think tank in Washington.

Paul's largest donor is the super-PAC Club for Growth, which has given him about $100,000 over the past four years, according to data compiled by the Center for Responsive Politics and the FEC. Club for Growth supports congressional candidates who "believe in growth policies, limited government, low taxes and economic freedom," according to its website.

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