Top GOP Donor Robert Mercer Sued Over How He Treats His Help

The Huffington Post, 10-23-14

   

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The race for Iowa's open U.S. Senate seat is among the closest in the nation, and one of a handful that could determine control of the Senate this fall. In her final debate with four-term Democratic U.S. Rep. Bruce Braley, Republican state Sen. Joni Ernst recently said she doesn't see a need to reform current campaign finance laws, because she believes in "political free speech."

Since the Supreme Court's disastrous Citizens United decision in 2010, big money has flooded into politics at levels never seen before, giving the ultra-wealthy the green light to use their megabucks to fund the kind of "political free speech" that's capable of drowning out everyone else's.

And that's the game being played by one of Joni Ernst's biggest donors, New York hedge fund co-CEO and near-billionaire Robert Mercer. Described by Bloomberg News as "one of the most powerful men in Republican politics that nobody is talking about," and ranked #6 on ABC News' recent list of 2014's "Mega-Donors," Mercer is fast becoming a GOP kingmaker.

Robert Mercer in 2012

By contributing $5,200 to Ernst this cycle, Mercer maxed out his legally permissible individual contributions to Ernst's Senate campaign. Yet, as revealed in a report released this week by the Brennan Center for Justice, Mercer's extensive support for Joni Ernst won him the dubious distinction of being 2014's "biggest-spending double-dipper." Double-dipping means donating the legal maximum allowed to a candidate, then supporting them with even more money by dumping cash into a super PAC set up solely to benefit that same candidate. Such super PACs can accept unlimited donations.

According to the report, Mercer spent $350,000 this year to "virtually fully fund" a super PAC called American Heartland, which is supporting Ernst. Despite its name, American Heartland is run out of Washington, D.C.

In this year's Iowa Republican primary, Mercer was outed as the money man behind American Heartland when the super PAC spent $140,000 opposing former energy company CEO Marc Jacobs, Ernst's closest rival for the GOP nomination. Jacobs' campaign manager said "Ernst has relied on out-of-state special interests" who were behind the attacks, and implored voters to "ask themselves, before they vote, will Joni Ernst represent them or a New York billionaire...something doesn't smell right."

But Mercer's generosity towards Republican political candidates and conservative super PACs he supports allegedly doesn't extend to his domestic help.

Last year, Mercer was sued by former members of his household staff for supposedly not paying overtime and docking wages when maids and other employees failed to promptly restock shampoo bottles, change razor blades in shavers, straighten pictures, or committed any of a laundry list of other offenses.

From the complaint:

Defendants deducted money from Plaintiffs' semiannual bonuses as a form of punishment or "demerits" related to Plaintiffs' alleged poor work performance. Demerits initially began at $10 and during the course of Plaintiffs' employment, rose to $20 per demerit. Plaintiffs received demerits throughout the work year for alleged poor work performance, including but not limited to the following:

failing to replace shampoos and other toiletries if there was an amount of less than one-third of a bottle remaining; failing to properly close doors; failing to leave extra towels in the bathroom; failing to change the razor blades in the shaver; failing to level pictures; leaving cleaning items out; leaving items in the refrigerator; and improperly counting beverages.

The lawyer representing Mercer's former domestic employees, Troy Kessler, said, "This is a social justice case. Domestic, low-wage workers are frequently taken advantage of and (in) this case it's particularly egregious."

According to Forbes, Mercer was the 16th highest paid hedge fund manager in the country in 2011, with a total pay package of $125 million. In 2012, he took home $90 million.

Entrance to Owl's Nest in Head of the Harbor, NY

In addition to his Owl's Nest mansion, located on a Long Island estate, Mercer owns a 186-foot luxury yacht named the Sea Owl.

Mercer was the 16th largest donor to super PACs in the 2011-12 election cycle, as estimated by the Center for Responsive Politics. During that period, he gave $5.5 million to pro-Republican super PACs, including $2 to Karl Rove's American Crossroads, and $1 million to Restore Our Future, the pro-Mitt Romney PAC. He also donated $600,000 to the Club For Growth's super PAC, whose attack ads were crucial to the rise of national Tea Party mouthpiece Sen. Ted Cruz (R-TX).

This year, Mercer and his wife rank #6 on the list of the country's 100 top political donors, with $3.75 million in reported contributions to federal candidates and PAC's for the 2014 cycle.

Mercer is also 2014's highest single contributor to Freedom Partners Action Fund, the super PAC that the Koch brothers set up over the summer. Mercer wrote a check for $2.5 million to the fund, which was set up to bankroll ads that explicitly attack Democratic candidates and support Republicans.

Ernst probably first met Robert Mercer when she attended the Koch brothers' August, 2013 big donor retreat in New Mexico. At the time, Ernst was a little-known, first-term Iowa state Senator who had just announced her candidacy for the GOP U.S. Senate nomination against three male rivals.

As Politico reported, the Koch-sponsored twice-annual meetings "generally attract top conservative talent, for whom they can be quite useful, providing an opportunity to build rapport with some of the movements' deepest-pocketed backers."

Returning to this summer's retreat in California, Ernst was one of three GOP U.S. Senate candidates to address the donors, along with Tom Cotton of Arkansas and Colorado's Cory Gardner. "It started right here with all of your folks," said Ernst, offering her gratitude for the support of what she termed "this wonderful network" of wealthy, right-wing multi-millionaires and billionaires. A few days after her appearance, Charles Koch, his wife, son and daughter-in-law all gave the maximum legal contribution to Ernst's campaign, $2,600 apiece. Koch Industries also kicked in $5,000.

Ernst has lots of extreme views that probably find favor with her right-wing donors. She wants to abolish the EPA, IRS, and the U.S. Department of Education. She opposes abortion with no exceptions for rape or incest, believes "the UN is behind" a thoroughly debunked conspiracy to relocate farmers from rural lands into cities, and opposes a federal minimum wage (because she says "$7.25 is appropriate for Iowa").

But most pleasing to their ears must be the fact that Ernst supports a flat tax on income.

If Joni Ernst goes to Washington, Robert Mercer's support for her candidacy will have earned huge dividends. He'll be one step closer to paying taxes on his enormous fortune at the exact same rate as the domestic workers he's been accused of nickel and diming over shampoo bottles and razor blades. For one of 2014's top "Mega-Donors," that would count as a great return on investment.

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John Edwards is Out to Get Himself

CHAPEL HILL - John Edwards and I now share hairdressers. I'm not talking about Joseph Torrenueva, the Beverly Hills-based hair artist who cut his locks from 2003 until March of this year, and whose expensive services have caused much political grief for Edwards. To atone for the $400 haircuts he regularly received from Torrenueva Hair Designs, Edwards has begun seeing the stylists at my neighborhood Great Clips, where the going rate is a far more reasonable $12. They've told me he's very down to earth, and a good tipper.

For someone who's been caricatured as a rich phony, John and his wife Elizabeth are about as regular people as you're likely to find in a presidential race. Most people by now know the basics of his biography, how he grew up as the son of a millworker, and was the first in his family to go to college. Even today, in the middle of the family's second campaign for national office, Elizabeth still shops at Target, and John takes the kids on expeditions to nearby grocery stores.

Edwards recently created a stir when his campaign released a video of an appearance he made July 26 before a group of voters in Iowa. In the video, he refers to "this silly, frivolous nothing stuff" in the media. "This stuff's not an accident," said Edwards. "They want to shut me up. That's what this is about."



His defenders have consistently slammed the press for covering the gaffes known as Edwards' "three H's" - his newly constructed 28,000 square foot house, $400 haircuts, and large salary earned from a hedge fund for the wealthy. Now Edwards has raised the charge himself, accusing the media of playing a game called "Let's distract from people who don't have health care coverage."

But is it accurate? Can John Edwards' stumbles honestly be blamed on mainstream media organizations out to get a candidate whose policy positions are seen as hostile to corporate interests? There are plenty of right-wing Edwards haters out there who have gladly used the media spin machine to magnify any bad news about him. And in light of the many challenges America faces in cleaning up after George W. Bush, the attention supposed character issues like the "three H's" have received is unfortunate. Still, a large part of the problem is Edwards' own poor political judgement.

After the 2004 campaign, the Edwards family moved from their house in an upscale neighborhood of Raleigh, N.C. to Chapel Hill, where housing prices are among the highest in the state. They bought land on the outskirts of town, and waited for their new home to be constructed, a sprawling compound that combines home and office space. The tax value of the house is $6 million, and totals 28,000 square feet. By comparison, the Clintons' Dutch Colonial in Chappaqua, NY has a square footage of 5,200, and was purchased in 1999 for $1.7 million.

About his work for Fortress Investment Group, a New York-based hedge fund, Edwards has said he wanted to learn more about the role of financial markets in helping alleviate poverty. Asked if he couldn't have just taken a class, he replied, "That's true." Edwards was paid a $479,512 salary by Fortress as an advisor during 2005 and 2006, and earned another $1.2 million in investment income from the firm.

It doesn't take a political genius to realize a job with a high flying hedge fund could hurt a candidate's anti-poverty credentials. Fortress greatly expanded its investments into sub-prime mortgage lenders while Edwards worked there, the type of predatory companies he regularly denounces on the campaign trail. "He didn't go through the portfolio," admits Elizabeth.

Edwards deserves the benefit of the doubt about his explanation that he didn't know how much his $400 haircuts cost. But he must have realized it wasn't cheap to fly a hairdresser to the stars around the country to cut his hair for more than three years. He may have been unaware of how Republicans have repeatedly used Democrats' fancy hair stylists to paint them as out of touch with average voters, although it happened to his running mate John Kerry in 2004. Regardless, Edwards was tripped up by his own bad judgement in getting such gold-plated hair treatment to begin with.



He also got into haircut trouble because his campaign team screwed up. His haircuts would never have become an issue if a staffer had not inadvertently billed two of them to the campaign during the first quarter of 2007, instead of charging Edwards’ personal account. Since no one in charge of filing his finance reports saw a problem with $400 haircuts, they became public knowledge, and the media reported on them. Like it or not, if you're running for President, your every move is under press scrutiny.

Beyond the "three H's," Edwards has fumbled through a series of campaign missteps that also call his decision making into question. Hiring bloggers who drew fire for anti-religious writings they'd previously posted on their personal blogs. Asking anti-war supporters to stage protests at Memorial Day parades, with a promise to post photos of the best demonstrations on a campaign-run website. Most recently, attacking Hillary Clinton for accepting $20,000 in campaign contributions from Fox News owner Rupert Murdoch and Fox executives, saying "the time has come for Democrats to stop pretending to be friends with the very people who demonize the Democratic Party." Predictably, Fox News wasted no time reminding the world that Edwards earned $800,000 last year from a book deal with Murdoch's HarperCollins unit.

When it comes to lifestyle, John and Elizabeth defend their choices by pointing out John worked hard as a highly successful trial lawyer to achieve their estimated $29.5 million net worth, and their family should be allowed to enjoy it. Giving every American the opportunities John Edwards has been afforded is one of his candidacy's central themes, an underpinning of Edwards' crusade against poverty.

Yet Edwards is taking a big risk by allowing displays of wealth to undercut his appeal as someone who knows what it's like to come from humble means. According to Drew Westen, professor of psychology at Emory and author of The Political Brain, a candidate's personal characteristics trump their policy positions every time. Voters look for emotional details that help them measure judgement, integrity, and leadership, rewarding consistent narratives about what values and vision a candidate possesses. The voting public doesn't decide between candidates by rationally weighing their platforms. This reality helped sink nominees like Kerry and Al Gore, even though their policies were backed by more Americans than those of George W. Bush.

I want to root for the guy who goes to the same haircut joint as me, even if he's a Johnny-come-lately to Great Clips. His '08 proposals are the most progressive of the major Democratic contenders, from providing universal health care to raising taxes on the super rich. But Edwards is making it hard with his unending string of self-inflicted political nicks and cuts. The next time he wonders who's really out to shut him up, John might want to sit down in our $12 stylist's chair and take a good look in the mirror.

(UPDATE 8/12/08 – Versions of this column were rejected by multiple media outlets, including the LA Times, New York Times, New Republic, Slate, Salon.com, and USA Today. Clearly they didn’t like the piece, but why? Maybe the news cycle was already saturated with stories about Edwards’ “three H” gaffes, or editors were giving Edwards a pass after he accused them on July 26, 2007 of trying to “distract from people who don't have health care coverage” by reporting on his campaign missteps. Footnote to the story: after getting a haircut once at the local Great Clips to comb over his $400 haircut flap, Edwards didn't visit again throughout the rest of the ’08 campaign.)