Democrat Super Donor Tom Steyer Tied to Supermall 'Ponzi' Suit

Image: Democrat Super Donor Tom Steyer Tied to Supermall 'Ponzi' Suit

Monday, 21 Apr 2014 11:18 AM

By Drew MacKenzie

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Billionaire Democratic benefactor Tom Steyer was linked through a hedge fund he founded to an alleged scheme to defraud foreign investors of $60 million, according to legal documents filed in a Texas court.

The connection surfaced at the same time the National Review concluded that the environmental activist’s pledge to donate $100 million to Democratic candidates in the midterm elections influenced President Barack Obama’s decision to delay action on the Keystone XL pipeline project until after November.

The Washington Free Beacon reported that Farallon Capital Partners L.P., a fund run by Farallon Capital Management, the multibillion-dollar hedge fund created by Steyer, joined a project to build a shopping mall near Seattle, Wash., in the 1990s as a limited partner.

In the Texas lawsuit, it was alleged that Farallon conspired with foreign-owned corporations in Texas "to defraud a group of over 300 German investors out of approximately sixty-million dollars."

The Asshauer group claimed that it was a "Ponzi scheme" and alleged that the companies planning to build the "Washington Supermall" transferred "millions of dollars in funds through 'loans' and 'advances' to other unrelated entities."

The plaintiffs allege, "At the end of the scheme, after the money-drained Supermall project was sold in 1998, the remaining funds were distributed to the entities that had assisted the entities in their scheme, including Farallon Partners, in improper preferential distributions that ultimately left the German investors with nothing to show for their $60 million investment."

The case was dismissed on jurisdictional grounds, with the court stating that Farallon didn’t operate in Texas and thus could not be sued in the Lone Star State, according to the Free Beacon.

The lawsuit was revealed as Steyer’s life came under a microscope after it was disclosed that he had agreed to donate $100 million to Democratic candidates in the upcoming elections who are opposed to the construction of the Keystone XL oil pipeline from Canada to Texas.

Noting that the State Department had found that the project would have no significant impact on the environment, National Review’s Tom Rogan claimed that Obama had deferred his decision on whether to approve the pipeline to appease super donor Steyer.

"The motivation for this latest deferral is obvious," Rogan said. "It’s a midterm election payoff, intended specifically for Tom Steyer. In short, facing the prospect of a Republican Senate, Obama has decided that governance can wait until November. Thus we find ourselves left with a stellar example of Democratic campaign-finance hypocrisy."

Rogan cited comments Senate Majority Leader Harry Reid had made earlier this year about billionaire conservatives Charles and David Koch, saying they were "un-American" and were trying "to buy" the election results by donating vast sums to Republican causes and candidates.

Rogan added, "What about Steyer? By Reid’s standards, Steyer’s $100 million purchase would surely represent a moral horror. Except that Steyer is a Democrat, which changes everything, because Democrats are the enlightened ones. This is liberal hypocrisy at its insufferable worst."

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