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Cantor: Little Faith in Investing in This Economy

Wednesday, 15 Jun 2011 06:00 PM

 

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House Republican leader Eric Cantor speaks from personal experience when he says that economic uncertainty is keeping large amounts of investment capital on the sidelines.

Cantor, 48, lists cash holdings with a value ranging from $452,000 to $1.03 million in bank, money-market and credit-union accounts on his annual financial disclosure statement.

“One of the reasons why we continue to see an ailing economy is that people have very little confidence” and feel “very little certainty” and that “negatively impacts their willingness to put capital to work and create jobs” Cantor said at a June 13 news conference.

The Virginia lawmaker’s disclosure report ranked him as the wealthiest among the new House Republican leadership. A one-time Ohio small business owner, House Speaker John Boehner listed assets ranging from about $1.97 million to $5.8 million.

House Republican Whip Kevin McCarthy of California listed assets valued at between $114,016 and $485,000 that included a mix of mutual fund and stock investments.

In the Senate, Majority Leader Harry Reid, a Democrat, reported assets ranging from about $2.9 million to $9.4 million, with much of his net worth tied up in real estate holdings in his home state of Nevada and in Arizona. He also disclosed a personal loan of between $50,001 and $100,000 to his re-election campaign last year.

McConnell’s Assets

Senate Minority Leader Mitch McConnell, a Kentucky Republican, reported assets ranging in value from $4.8 million to $19.8 million -- most of them held by his wife, former Labor Secretary Elaine Chao.

In addition to cash, Cantor listed financial assets, including stocks and holdings on bond funds, that he valued between $2.6 million and $6.75 million.

He and his wife, Diana, a former Goldman Sachs & Co. vice president who is now a partner in Alternative Investment Management LLC, also own an Arlington, Virginia, condominium valued between $500,001 to $1 million.

The unit produces rental income ranging from $15,001 to $50,000 annually, the statement said.

A major theme of the Republican critique of President Barack Obama’s policies is that economic doubts due to spiraling government deficits and the fear of higher taxes has stifled job growth.

Expanding Production

That is because investors and small businesses won’t commit capital needed to expand production and services that leads to more hiring, Republicans argues.

Cantor repeatedly makes the pitch that deficit reduction through spending cuts, not higher taxes, is needed to encourage business investment to lower the U.S. jobless rate of 9.1 percent.

“You do that by creating an environment for the private sector to put capital at risk and to grow,” Cantor said at an April 12 news conference.

The Cantors’ cash is held in accounts at Bank of America Corp., BB&T Corp. and the Virginia Credit Union, the statement said. He also listed $100,001 to $250,000 from an individual retirement account in the Goldman Sachs Financial Square Money Market Fund, which invests in U.S. government securities.

To be sure, the Cantors’ investments include stock and corporate bond holdings, such as stock in Qualcomm Inc., a maker of digital wireless communications equipment that is valued from $100,001 and $250,000.

Real Estate Venture

They also listed a note in a commercial real estate venture called Richmond Resources Hickory Park LLC, valued between $500,001 and $1 million and another note, valued between $250,001 and $500,000 in Richmond Resources Ltd., a real estate development firm.

The couple also held stock valued between $250,001 and $500,000 in another Richmond real estate venture called Water Tower Associates LLC.

Financial disclosure forms filed by members of Congress require lawmakers to state the value of holdings in broad ranges. Precise figures aren’t made public.

The Cantors also held $50,001 to $100,000 worth of Schlumberger Ltd., an oil-services company and $15,001 to $50,000 worth of Royal Dutch Shell PLC, Europe’s largest oil company.

Mrs. Cantor, who heads the Virginia State Retirement System, is a director of Media General Inc., a Richmond-based newspaper and broadcast company and Domino’s Pizza Inc. Cantor lists his wife’s Domino’s stock options at more than $100,001. Mrs. Cantor also received as deferred compensation stock in Media General valued between $250,001 and $500,000.

Retirement Account

Boehner’s report showed that a portion of his holdings was in an Individual Retirement Account that owns shares in companies such as Decatur, Illinois-based Archer Daniels Midland and JPMorgan Chase & Co. of New York.

Boehner reported cash balances in bank accounts ranging from $51,000 to $115,000.

The House speaker, who sold his plastics packaging-sales company while he was still in the minority leadership, also reported that he and his wife, Debbie, jointly own more than a dozen mutual funds. Boehner also disclosed he has at least $500,001 in an Ohio public employee retirement pension plan.

Leading sources of Boehner’s unearned income included $15,001 to $50,000 in dividends and capital gains from American Funds’ Growth Fund of America and $15,001 to $50,000 in similar investment income from the Davis New York Venture fund.

Outside Group

Boehner, 61, also reported that he took a paid trip from an outside group in the spring of last year. He received a one-way trip to Palm Beach, Florida, From the Club for Growth, a group that supports low taxes and government spending and gives to Republican candidates that support its agenda. Boehner spoke at an event hosted by the group, said Mike Steel, the speaker’s spokesman.

McCarthy owns shares in companies that include Alexander and Baldwin Inc., a Honolulu-based freight and property management company, and Duke Energy Corp., the Charlotte, North Carolina, power utility.

McCarthy, 46, also reported a March 2010 publishing deal for the book “Young Guns” that he co-wrote with Cantor and House Budget Committee Chairman Paul Ryan. The book, produced last year before the elections in which Republicans gained control of the House, laid out elements of the Republican agenda.

Amassed a Fortune

The son of a Nevada hard-rock miner, Reid has amassed a fortune with vast holdings in bonds and stock mutual funds and other investments. His largest sources of unearned income last year stemmed from bonds that matured during 2010.

Reid also disclosed that he got a free trip back to Nevada on Dec. 23 on a jet plane thanks to Senator Dianne Feinstein, a California Democrat. Reid disclosed the gift was worth $14,500, according to a value established by the Senate Ethics Committee.

In his report, McConnell disclosed that Chao, his wife, is largely invested in stock mutual funds, although the disclosure form shows she sold as much as $100,000 in restricted stock in Dole Food Co. Inc. She has served on the company’s board of directors since 2009.

Chao earned income from about half a dozen speeches to groups including the American Chamber of Commerce. She also spoke at events at Corning Inc., Dole Foods and Vanguard Group Inc. The couple jointly owns shares in some Vanguard mutual funds.

--Editors: Jeanne Cummings, Jim Rubin.

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.netnd Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at Msilva34@bloomberg.net.

© Copyright 2014 Bloomberg News. All rights reserved.

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