Michael Recanati: The Anti-Midas Touch

Shipping heir and Democracy Alliance member has record of business missteps
Facebook

Facebook

BY:

Editor’s Note: Details of the WFB’s Democracy Alliance exposé can be found here.

The multiple business failings of an Israeli shipping heir have not prevented him from pumping millions into a shadow Democratic Party.

Michael Recanati, son of Israeli shipping and banking mogul Ralph Recanati, has dedicated his inheritance to improving the prospects of Democratic politicians. Between 2000 and 2010, he contributed more than $800,000 to national Democrats, including disgraced ex-Rep. Anthony Weiner, embattled banking chief and former Sen. Jon Corzine, funnyman Al Franken, and President Barack Obama. His boyfriend, restaurateur Ira Statfeld, contributed nearly $125,000 to Democratic candidates in 2008 and 2010, including Obama, Franken and Weiner, according to the Center for Responsive Politics.

Recanati’s most generous political giving, however, has focused on secretive left-wing networks, as well as on non-profits backed by hedge fund billionaire George Soros.

He and Statfeld are members of the secretive Democracy Alliance, which encourages wealthy Democrats to contribute to Democratic super PACs and outside groups closely tied to the Obama White House, such as the Center for American Progress and Media Matters, according to documents obtained by the Washington Free Beacon.

Neither the Alliance nor Recanati nor Statfeld returned requests for comment.

Recanati cut mammoth checks to several Soros-backed efforts to oust former President George W. Bush in 2004. Recanati gave $250,000 each to America Coming Together 2004 and Joint Victory Fund 2004—527 groups unrestricted by giving limits that later disbanded after Soros moved on to projects like the Democracy Alliance.

“After 2004, you had a lot of liberals who were not satisfied with the Democratic Party, particularly among businessmen,” elections expert Jay Cost said. “They got together and decided that their money would be better spent if they could control it with these shadow party systems.”

Recanati’s business failures mirror his anti-Bush activism. His father forced him out of the family business, Overseas Shipholding Group (OSG) in 1995, due to poor performance. The younger Recanati went on to start a series of ventures that quickly went bust, due in part to his lavish lifestyle.

Following his ouster, Recanati founded an Internet broadcasting company, Ifusion Com Corporation. The venture folded less than 18 months after its launch.

“CEO Michael Recanati was often singled out—by employees, the press, and industry observers—for apparently squandering the startup’s resources, lacking focus, and failing to inform employees of the company’s demise,” Internet World reported in 1998.

Recanati’s high salary demands also crippled future ventures, damaging the livelihood of hundreds of employees. In 1999 Recanati started the venture capital firm Orama Ltd., backed by Israel Discount Bank (IDB), a $48 billion financial behemoth his grandfather founded in 1935. His paycheck played a direct role in the company’s shaky start, according to Israeli newspaper Globes.

“In August 2000, one year after its founding, Orama reported its business results—a $15 million (Israeli) loss as of the end of June 2000, mostly due to the huge salaries of its executives: Orama Group chairman Michael Recanati and Orama Partners president and CEO Alan R. Batkin,” the paper reported.

IDB shuttered the venture in 2001.

Recanati’s businesses have also proved disastrous for American workers. In 2008, Recanati’s organic produce company, Really Cool Foods, qualified for $3.5 million in incentive funds from the state of Indiana, while promising to create 1,000 new jobs and bring in $100 million in investment.

However, the company created more problems than it solved in Wayne County, Ind., a Rust Belt area beset by 11 percent unemployment. Not only did Recanati fail to fulfill his job and financing pledges, grease from his factories ended up “clogging pumps and ruining sewage equipment at a sewage plant … for two years.”

When the factory went bust in 2011, the venture had created a mere 131 jobs.

“They had big plans and we appreciated them coming here, taking a chance,” said Wayne County, Ind. Commissioner Doug Williamson. “I think it was bad timing with the economy … that’s the way it is with business sometimes.”

Recanati inability to replicate the business success of his father and grandfather has not kept him from enjoying a comfortable lifestyle and becoming a high roller in political and philanthropy circles.

In 2007, Recanati and Statfeld purchased a $24.5 million apartment in the Jean Nouvel tower in Manhattan, but backed out of the deal because the ceilings were not high enough for their “extensive and valuable art collection.”

Not all of their lavish real estate deals have proved as disappointing, however. Recanati and Statfeld purchased former Clinton adviser George Stephanopolous’s 3-bedroom cottage in the Hamptons for $1.2 million in 2003. Hillary Clinton would later use the home to help jumpstart her presidential bid with a $22 million fundraiser.

Recanati has emerged as a formidable fundraiser, though his anti-Midas touch has sometimes extended to his philanthropy, as well. When his adopted son was diagnosed with autism, Recanati pulled him from the Dalton School, one of the nation’s most expensive private schools, and began raising money to open up an educational facility of his own. Within a year, he amassed $20 million to launch the Morriss Center School.

But the school met a similar fate to that of Really Cool Foods. It folded within three years, failing to meet its 200-pupil capacity. Morris’s 21 students were forced to merge with another high school.

Recanati was forced off of the school board.

Bill McMorris   Email Bill | Full Bio | RSS
Bill McMorris is a staff writer for the Washington Free Beacon. He joins the Beacon from the Franklin Center for Government and Public Integrity, where he was managing editor of Old Dominion Watchdog. He was a 2010 Robert Novak Fellow with the Phillips Foundation, where he studied state pension shortfalls. His work has been featured on CNN, Fox News, The Economist, Colbert Report, and numerous print publications and radio stations. He is a 2008 Cornell University graduate and lives in Alexandria, Va with his wife Teresa and daughter Olivia. His Twitter handle is @FBillMcMorris. His email address is mcmorris@freebeacon.com.