Rep. Alan Grayson (D., Fla.), who has come under steady scrutiny since June for operating hedge funds as a sitting member of Congress, sought to capitalize on markets in economic turmoil, according to a new report.
The New York Times discovered that Grayson, who created the controversial hedge funds in 2011 after being defeated in the 2010 elections, looked to devastation in an attempt to turn a profit for investors.
The Times reports:
Interviews and the documents show that Mr. Grayson told potential investors in his hedge fund that they should contribute money to the fund to capitalize on the unrest he observed around the world, and to take particular advantage when there was “blood in the streets.”
The emails also show how Mr. Grayson’s work for the hedge fund — which had $16.4 million in assets as of October and only four investors since it was established — at times interfered with his other duties. In August 2015, after Mr. Grayson introduced legislation calling for larger annual increases in Social Security benefits, he signed off on a plan to highlight the proposal at an event in Tampa, Fla., emails obtained by The Times show. But the plan was scuttled, two former aides said, when economic turmoil in China sent stock markets tumbling globally and Mr. Grayson had to turn his attention to the fund.
The funds have created headaches for Grayson, who has seen ethics complaints filed against him for their operation as a sitting member of Congress. Until recently, the funds carried his name but were changed once pressure mounted from the actions.
Grayson’s own staff saw the funds as a problem that would continue for some time, according to emails obtained by the Times.
Last summer, employees within his main office pleaded with him to discontinue their operation due to inquiries coming into the office from reporters. The staffers, the emails show, feared the story would not go away. Grayson responded to their worries by saying that he believed closing the funds would look worse than keeping them open.
Despite the concern from some of the congressman’s staffers, the Washington Free Beacon previously discovered that one member of his Washington, D.C. office was shown to be a part of their management.
Carla Coleman, who began working as Grayson’s scheduler and office manager in January 2013, first appeared on a SEC filing that was submitted on Nov. 24, 2014, in which she was listed as a director alongside Grayson of the Grayson Fund (Cayman) Ltd., which has since been moved to the United States and has undergone a name change. Another filing, also submitted on Nov. 24, 2014, lists both Grayson and Coleman as executive directors.
The hedge funds have turned into an issue for Grayson, who is currently running for Senate in Florida.