One of Utah’s most powerful couples participates in the Democracy Alliance, a shadowy leftwing group.
Hedge fund guru Art Lipson and his wife, Rochelle Kaplan, are huge campaign contributors to Democrats as well as members of the Alliance, which requires members to fork over $200,000 per year to liberal causes.
Lipson and Kaplan have contributed nearly $2.3 million to Democratic candidates and organizations since 2002. Their efforts on behalf of Obama in 2008 made their reputation as the most politically active donors in their adopted home state of Utah. Lipson and his wife flooded candidates with more than $300,000, representing more than $1 out of every $20 donated from the state.
Lipson’s considerable wealth derives from his career in finance. He pioneered bond indexes at the now-defunct Lehman Brothers, one of the firms that helped fuel (and was destroyed by) the subprime mortgage boom and bust. He retired long before the over-leveraged firm went under and now manages Western Investment. The $112 million hedge fund employs a dozen people—a total that may include Lipson’s wife, who has listed herself as a researcher, analyst, and clerical worker at the fund on campaign filings.
Despite his mega-donor habits, Lipson is not a fan of the Supreme Court’s Citizens United decision that allowed corporations and unions to contribute money to politicians.
“The influx of corporate money is ludicrous,” Lipson told the Washington Free Beacon in a phone interview. “I can give because I’m not a corporation. I would go for restrictions on giving that would limit me and 99 percent of DA members.”
Lipson’s position is not uncommon among wealthy liberals, according to campaign finance expert John Samples.
“People will operate as far as the law will allow them to, so it’s no surprise that if you know the other side is going to contribute, you will too,” he said. “Citizens United has only enhanced the influence of groups like the Democracy Alliance because they don’t have to disclose.”
Rochelle Kaplan declined to comment, saying she would “need to clear [the interview request] with DA.” The Alliance does not allow members to publicly discuss its operations.
The couple’s generosity to Democratic politicians has softened in recent years. Lipson pledged not to give a dime to Obama’s reelection effort because the president “compromised too much with Republicans” on issues such as the Bush tax cuts.
“In my opinion he’s been terrifically naïve, trying to work with Republicans,” Lipson said. “Republicans can win because they have a simple platform: small government, low taxes, personal responsibility. What message has Obama left progressives with? Nothing. He’s abandoned progressives.”
The Alliance, though, has gone all-in for Obama in 2012.
Following the 2010 Republican sweep, Vice President Joe Biden beseeched the group to end its embargo on funding political campaigns. Alliance members voted to include Democratic Super PACs, including Obama’s Priorities USA, on its list of favored groups.
Several prominent Alliance members renounced the group in 2011, including one of its cofounders, insurance billionaire Peter Lewis. Lipson and Kaplan have remained with the group despite its increasingly partisan bent.
“I can see why people might think it’s inappropriate and why others would find it reasonable,” Lipson said. “I can’t speak about the internal workings of the DA, but we may have lost people if we didn’t [fund Obama].”
The Alliance has also weeded out the smaller organizations in order to funnel the wealth of its members to groups with close ties to the White House, such as the Center for American Progress and Media Matters.
“Their funding doesn’t go to traditional think tanks like the Heritage Foundation on the right,” said Jacob Laksin, co-author of The New Leviathan. “The left focuses more on ‘battle tanks,’ like CAP, that are more closely tied to ideological efforts and elections, rather than policy.”
The Alliance did not return requests for comment.
Lipson and Kaplan may not be supporting the president financially, but they are aiding Obama’s policy fight, including his push to raise taxes on high earners and small business owners. Lipson and Kaplan are members of Patriotic Millionaires for Fiscal Strength, a collection of wealthy liberals.
The Alliance’s secrecy gives political cover to wealthy movers and shakers like Lipson and Kaplan. Because it does not handle money directly, it does not have to disclose its members or recipients. That helps provide anonymity to the Patriotic Millionaires, who donate millions to political organizations and then decry the influence of big money in politics, according to conservative elections expert Jay Cost.
“What they’ve set up is a shadow political party,” he said. “They don’t have to tell us anything, so that offers an incentive to rich businessman who do not want their level of giving to be revealed.”