The third-largest campaign donor for Sen. Mitch McConnell, R-Ky., is a $14 billion New York City hedge-fund firm led by a man — nicknamed "the Vulture" — who squeezes distressed companies and countries for their last dollars, and who boasted that the current U.S. economic crisis is "the opportunity of a lifetime."
Paul E. Singer and his employees at Elliott Management gave $87,500 to McConnell's campaign as of June 30, according to the non-partisan Center for Responsive Politics. They gave at least $66,000 more to McConnell's political-action committee, called Bluegrass PAC.
Sign Up and Save
Get six months of free digital access to the Lexington Herald-Leader
Only Louisville-based Kindred Healthcare, which runs nursing homes and hospitals, and UBS, a global provider of financial services for wealthy clients, gave more to keep McConnell in the Senate.
McConnell, the Senate Republican leader, supported much of the agenda for which records show that Elliott lobbied Congress, including limits on the damages injured people can recover when they sue corporations; new bankruptcy rules making it harder for people to escape debt; and a bar against higher taxes for wealthy hedge-fund managers.
Elliott spokesman Scott Tagliarino said Wednesday that the company did not want to discuss its relationship with McConnell.
"No, we would have no comment," Tagliarino said.
The McConnell campaign did not return calls Wednesday.
McConnell faces Democratic businessman Bruce Lunsford on Nov. 4 in his effort to win a fifth term.
Singer founded Elliott Management in 1977, and he continues to run it on behalf of wealthy individuals and large institutional investors. One of the oldest hedge funds, it maintains offices and assets around the world, including the Cayman Islands, an offshore investment haven.
Elliott specializes in the controversial practice of buying pieces of distressed companies, or buying the debt of poor countries, and then squeezing hard for a return.
Examples of Elliott's aggressiveness include filing lawsuits to collect on $100 million from the Congo Republic, where more than one-fourth of the population lives in poverty, and his company's appearance on the powerful creditors' committee after the record-setting WorldCom bankruptcy.
The Times of London called Singer the "vulture investor" in a 2005 article on the pressure he was applying to a troubled British company, where Elliott bought more than 6 percent of the stock and then instructed the company to sell itself off.
The nickname stuck. Last year, when Singer was revealed to be a major financial backer of Republican presidential candidate Rudy Giuliani, the New York Post blared: "Rudy's Vulture $$ Man: 'Profits Off Poor.'"
Singer has given millions of dollars to the Republican Party, its candidates and causes. He backed Swift Boat Vets and POWs for Truth in their attacks on the Vietnam War record of John Kerry, the 2004 Democratic presidential nominee. He bankrolled — secretly, through a Missouri organization — an unsuccessful California initiative to award the state's electoral votes by congressional district instead of winner-take-all.
Looking for losers
Although he is reclusive and seldom gives interviews, Singer talked at length for a profile in Bloomberg Markets magazine last February.
In that interview, Singer said he had been making a fortune off of the collapsing American economy by buying credit-default swaps tied to the debt of big banks, including Citigroup and JPMorgan Chase. He said that beyond the housing crisis, he looked forward to a wave of corporate bankruptcies across the United States during the next two years, which would allow him to move in and pick off the remains cheaply.
"Our primary goal is to find bankruptcy situations where our ability to control or influence the process is the driver of value," he told the magazine. "That's our favorite."
There also is more money to be made in the failure of subprime loans that helped trigger the housing crisis, Singer added.
"It's the opportunity of a lifetime," he said.