{"id":1194419,"date":"2023-08-29T10:48:24","date_gmt":"2023-08-29T10:48:24","guid":{"rendered":"https:\/\/jacobin.com\/2023\/08\/vivek-ramaswamy-strive-pensions-ethics-esg-leo\/"},"modified":"2023-08-29T10:53:43","modified_gmt":"2023-08-29T10:53:43","slug":"vivek-ramaswamy-used-dark-money-connections-to-enrich-his-investment-firm","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2023\/08\/29\/vivek-ramaswamy-used-dark-money-connections-to-enrich-his-investment-firm\/","title":{"rendered":"Vivek Ramaswamy Used Dark Money Connections to Enrich His Investment Firm"},"content":{"rendered":"\n \n\n\n\n

GOP presidential candidate Vivek Ramaswamy has leveraged relationships in the right-wing dark money world to win lucrative public pension investments and consulting business from state financial officers \u2014 possibly violating ethics rules around lobbying.<\/h3>\n\n\n
\n \n
\n Republican presidential candidate Vivek Ramaswamy participates in the first debate of the GOP primary season hosted by FOX News at the Fiserv Forum on August 23, 2023, in Milwaukee, Wisconsin. (Win McNamee \/ Getty Images)\n <\/figcaption> \n<\/figure>\n\n\n\n\n \n

Billionaire GOP presidential contender Vivek Ramaswamy<\/a> bragged during last week\u2019s debate that he was the \u201conly person on the stage who isn\u2019t bought and paid for\u201d \u2014 even as he has brushed off concerns that the ultrarich have too much influence over politics and policy.<\/p>\n

But over the past few years, Ramaswamy leveraged relationships in the conservative dark money world in order to drum up lucrative public pension investments and consulting business from Republican state financial officers.<\/p>\n

Public employees and retirees, who depend on their pensions for retirement income, were largely kept in the dark about these relationships. Ramaswamy and executives at his \u201canti-woke\u201d asset manager, Strive Enterprises, did not register to lobby in any of the dozen states where they contacted state financial officers \u2014 even as Ramaswamy or other Strive employees met with government officials and sought pension business. In a couple of cases, local ethics lawyers said that Strive should have registered to lobby.<\/p>\n

On the 2024 campaign trail, Ramaswamy has pitched himself as a Trumpian outsider. He has made an\u00a0abrupt jump<\/a> in the polls, although former president Donald Trump remains the clear front-runner for the Republican presidential ticket. Corporate media has credited<\/a> Ramaswamy\u2019s \u201cmedia ubiquity\u201d (aka their own coverage of him) with his recent rise to prominence. But a Lever<\/em>\u00a0review reveals Ramaswamy blazing a more traditional path to power and wealth: using connections to help expand his fortune and facilitate his entry into the political world.<\/p>\n

To build their business, records show Ramaswamy and Strive have relied in part on relationships with conservative state officials who belong to the State Financial Officers Foundation (SFOF), a nonprofit organization that does not publicly disclose its donors and is closely linked to conservative activist Leonard Leo, architect of a\u00a0billion-dollar<\/a>\u00a0political influence machine. SFOF\u00a0bestowed<\/a>\u00a0Ramaswamy its lifetime achievement award in 2022, the year he launched Strive, and Ramaswamy has delivered speeches to the organization and other conservative groups that have worked with SFOF on financial issues in recent years.<\/p>\n

\u201cThe State Financial Officers Foundation helped legitimize Ramaswamy as an \u2018anti-woke\u2019 expert and provided Strive with behind-closed-door access to its most valued prospective clients: state pension funds,\u201d said Colette Rosenberg, a researcher with the nonpartisan watchdog group Documented, which has been tracking Strive\u2019s business across states. \u201cRamaswamy and Strive used that access to sell Strive to pension fund decision makers around the country.\u201d<\/p>\n

Ramaswamy stepped down as CEO of Strive in\u00a0February<\/a> to run for president, but he retains a stake,\u00a0estimated<\/a> at 40 percent of the firm, worth $120 million. His recent personal financial\u00a0disclosure<\/a>\u00a0values his stake in Strive Enterprises at more than $50 million, and lists additional Strive holdings worth up to $55 million. In June, Strive\u00a0announced<\/a>\u00a0that it had surpassed $750 million in assets under management.<\/p>\n

By the end of June, Ramaswamy had pumped more than $16 million of his own fortune into his presidential campaign \u2014 more than 80 percent of the total that he had raised.<\/p>\n

This summer, two former Strive employees filed separate lawsuits against the firm, Ramaswamy, and his cofounder. The lawsuits allege that Ramaswamy encouraged employees to violate securities laws and overstated the firm\u2019s growth potential.<\/p>\n

One of the former employee\u2019s lawyers\u00a0told\u00a0Businessweek<\/em><\/a>\u00a0that Strive \u201cwas founded, in retrospect, largely as a PR mechanism for the presidential campaign of Ramaswamy.\u201d<\/p>\n

\u201cValue maximization is our fiduciary duty as an asset manager,\u201d a Strive spokesperson told the Lever:<\/em><\/p>\n

Strive meets with the investment staff at public pensions and those that oversee the pensions on a regular basis, as well as every other type of asset manager and asset allocator. . . . Strive is educating the same pension funds on why shareholder capitalism outperforms, and we are having frank discussions about the fiduciary duties of asset managers and asset allocators.<\/p><\/blockquote>\n

The Ramaswamy campaign did not respond to a request for comment.<\/p>\n\n \n\n \n \n \n

\u201cA Warm Introduction\u201d<\/h2>\n \n

The thirty-eight-year-old Ramaswamy is one of the youngest billionaires in America. He largely got rich<\/a>\u00a0by founding a biotech firm that won backing from major investors and cashing out even when his ventures failed.<\/p>\n

But Ramaswamy rose to public prominence thanks to his interest in the culture war. In 2021, he published the book\u00a0Woke Inc.<\/em>, a screed against corporate social responsibility.<\/p>\n

Then, in May 2022, Ramaswamy launched Strive with\u00a0backing<\/a> from billionaire venture capitalist Peter Thiel and from Sen. J. D. Vance\u2019s (R-OH) venture capital firm<\/a>. He\u2019s used Strive as a podium from which to carry out his crusade against environmental, social, and governance (ESG) investing \u2014 which encourages investors to consider the environmental and social consequences of their investment decisions, and the governance of the firms in which they are investing.<\/p>\n

In an interview with\u00a0CNBC<\/a>\u00a0last year, Ramaswamy characterized the firm\u2019s business as \u201ca message to corporate America to focus on excellence over politics.\u201d<\/p>\n

The idea presented by Ramaswamy and conservatives is that, by considering potential social and climate impacts in their investments, these asset managers are failing to fulfill their obligations as fiduciaries to act in the best interest of their investors.<\/p>\n

\u201cWhat I think is happening today is a problem, where the biggest asset managers on the planet \u2014 BlackRock, State Street, Vanguard \u2014 I think they\u2019re using their clients\u2019 capital to advocate for viewpoints in the boardrooms of corporate America that most of their own clients disagree with,\u201d he said, arguing that this constitutes \u201ca sort of fiduciary breach.\u201d (Ramaswamy is\u00a0personally invested<\/a>\u00a0in corporations that have been outspoken on ESG issues.)<\/p>\n

Strive, for example, offers a \u201cU. S. Energy ETF,\u201d which is heavily invested<\/a>\u00a0in domestic fossil fuel companies. During the first GOP primary debate last week, Ramaswamy\u00a0claimed<\/a>\u00a0that \u201cthe climate change agenda is a hoax.\u201d<\/p>\n

Ramaswamy\u2019s grievances with the political establishment apparently have little to do with the corrupting influence of money in politics. A\u00a0New Yorker<\/em>\u00a0profile last year said that \u201cthe issue\u201d of how money compromises the political and policymaking processes \u201cseemed to bore him.\u201d<\/p>\n

While the issue may bore Ramaswamy, political influence was foundational to his work with Strive.<\/p>\n

Last spring and summer, Ramaswamy or Strive executives contacted financial officers in at least twelve states \u2014 Alaska, Florida, Indiana, Missouri, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Utah, and West Virginia \u2014 to pitch Strive\u2019s exchange traded funds, bundles of securities such as stocks and bonds that are traded on exchanges, and in some cases its advisory services, according to records obtained by Documented.<\/p>\n

In all twelve of those states, the top financial officer was a member of the dark money nonprofit, SFOF. The State Financial Officers Foundation works with CRC Advisors, a consulting firm chaired by Leo, the conservative activist and Trump judicial adviser who helped build the Supreme Court\u2019s conservative supermajority.<\/p>\n

Ramaswamy also\u00a0sits on the board<\/a>\u00a0of the Leo-backed Philanthropy Roundtable and is a member of two Leo-backed groups, the young conservative network\u00a0Teneo<\/a> and the conservative lawyers’ network, the Federalist Society.<\/p>\n

\u201cThe creation of Strive was part of Ramaswamy\u2019s strategy to capitalize on the culture war issue du jour,\u201d said Rosenberg of Documented:<\/p>\n

Ramaswamy used Strive to boost his image and connections with the movers and shakers of Republican politics while using those new connections to profit from his relentless campaign against ESG by driving state funds out of companies like BlackRock into his asset management firm.<\/p><\/blockquote>\n

For example, in August of 2022, Strive cofounder Anson Frericks had lunch<\/a> in Austin, Texas, with a fossil fuel billionaire and Texas comptroller Glenn Hegar, a member of SFOF. Weeks earlier, Hegar had introduced<\/a>\u00a0Ramaswamy for a talk he was giving on\u00a0Woke Inc.<\/em><\/p>\n

The following month, Hegar obliged when Frericks\u00a0requested<\/a>\u00a0\u201ca warm introduction\u201d to Texas officials overseeing an \u201cemerging managers fund.\u201d Records show the Texas Employees Retirement Fund has\u00a0invested<\/a>\u00a0$100 million in Strive\u2019s \u201canti-China\u201d exchange traded fund.<\/p>\n

This winter, Strive moved to pitch another product to the State of Texas: Strive Advisory, a proxy advisory firm that sits under the same parent company as Strive\u2019s asset manager, and shares some employees. Proxy advisors give investors \u2014 such as pension funds \u2014 advice on how to vote on shareholder resolutions.<\/p>\n

In February, a Strive executive requested a meeting with the Texas Teacher Retirement System to pitch the firm\u2019s proxy advising services. In advance of the meeting, Dale West, senior managing director for the Teacher Retirement System,\u00a0wrote<\/a>\u00a0to the Strive executive in a confirmation email, \u201cBe sure to bring us some \u2018Vivek for Prez\u2019 bumper stickers. (Too soon?)\u201d<\/p>\n

Officers of Strive also met with top financial officers from other states. In West Virginia, state treasurer Riley Moore met<\/a>\u00a0with<\/a>\u00a0Strive officials<\/a>, including at an SFOF event, according to records obtained by Documented.<\/p>\n

\u201cTreasurer Moore first met Mr. Ramaswamy when he spoke as part of the National Review Institute\u2019s Ideas Summit at The Greenbrier here in West Virginia during May 2021,\u201d his office told us.<\/em><\/p>\n

In June 2022, the Missouri State Employees\u2019 Retirement System set up a meeting on ESG, and then treasurer (now auditor) Scott Fitzpatrick suggested Ramaswamy present to the pension board. Fitzpatrick is an SFOF member and outspoken critic of BlackRock and ESG investing; his spokesperson confirmed that Fitzpatrick had been connected with Ramaswamy through SFOF. Pension fund staff suggested<\/a>\u00a0that the meeting be kept to \u201ceducation\u201d and \u201cnot include someone who is actively recruiting investors for a fund.\u201d<\/p>\n

A spokesperson for Fitzpatrick said in an email that Ramaswamy launched Strive after his meeting with the Missouri State Employees\u2019 Retirement System had been scheduled. \u201cWith that development, there was a discussion about whether he should still attend the conference,\u201d they noted:<\/p>\n

The decision was made that Fitzpatrick would reach out to Ramaswamy to explain that if he spoke at the conference, his talk would need to be educational and not a Strive pitch. Fitzpatrick had that conversation with Ramaswamy and he agreed.<\/p><\/blockquote>\n

Just after the meeting, the pension fund\u00a0tried to stop<\/a>\u00a0BlackRock from proxy voting on its behalf \u2014 before ultimately\u00a0pulling their money<\/a>\u00a0from the firm.<\/p>\n

Ramaswamy\u00a0later reached out<\/a>\u00a0to Missouri retirement fund officials offering to \u201cassist with proxy voting and shareholder engagement needs.\u201d<\/p>\n\n \n \n \n

\u201cThey Definitely Should Have Registered\u201d<\/h2>\n \n

Despite its contacts with state officials, Strive never registered any lobbyists in Texas \u2014 nor in other states where employees of the firm met with pension officials in order to seek out business.<\/p>\n

Under Texas law, meeting with pension officials to seek business counts as lobbying, according to Andrew Cates, a government ethics lawyer in the state. But the registration requirement is only triggered when the person attempting to influence public officials has been paid more than $1,760 in a calendar quarter for their activities.<\/p>\n

While it\u2019s entirely plausible that Strive officials reached this compensation threshold, it\u2019s difficult to verify without looking under the hood.<\/p>\n

\u201cIt\u2019s really hard to prove,\u201d said Cates. \u201cIt all really comes down to doing that calculation\u201d \u2014 figuring out how much a Strive employee makes in a year, calculating the average hourly rate, and looking at how much time they spent meeting with government officials \u2014 \u201cand it sucks because it\u2019s hard to get those numbers to make it. The only way you\u2019ll really get it is in discovery and a trial.\u201d<\/p>\n

Still, Clay Robison, a spokesperson for the Texas State Teachers Association, the state\u2019s biggest teachers union, said the lack of registration raises transparency and accountability concerns.<\/p>\n

\u201cOur view is that anybody trying to advise the teacher retirement system on where to make their investments should be registered as a lobbyist, so the public can have access to their registration,\u201d Robison told us,\u00a0pointing out that in Texas, most retired teachers\u00a0don\u2019t<\/a>\u00a0get<\/a>\u00a0Social Security, making them dependent on the retirement fund.<\/p>\n

\u201cTransparency is very important in these types of transactions \u2014 they definitely should have registered as lobbyists, and if it\u2019s not the law it should be,\u201d said Robison.<\/p>\n

The State of Indiana has also entered a formal business relationship with Strive to take advantage of the firm\u2019s advisory services. Last November, the Indiana Public Retirement System signed a contract with Strive\u2019s advisory arm to review the state\u2019s investment policies, according to<\/a>\u00a0the\u00a0Indiana Capital Chronicle<\/em>. The contract listed Ramaswamy\u2019s rate at $4,000\u00a0an hour<\/a>, with a total cap of $150,000. Two other Strive officials were also listed on the contract.<\/p>\n

The contract says that Strive Advisory \u201cmay be asked to advise\u201d \u2014 or give its opinion \u2014 on asset managers that compete with Strive Asset Management. According to Jesse Coleman, a researcher at Documented, the metrics listed in Strive Advisory\u2019s pitch materials would favor investments offered by Strive Asset Management.<\/p>\n

\u201cThat raises a lot of questions because with all of the other proxy advising services, there\u2019s a firewall\u201d between the advisory service and the asset manager, Coleman\u00a0told<\/a>\u00a0the\u00a0Indiana Capital Chronicle.<\/em><\/p>\n

\u201cStrive is making recommendations about services they offer \u2014 if you know that the advice you are giving could make you more money, you will change your advice,\u201d said Abe Schwab, an Indiana ethics expert and member of the Allen County Ethics Commission. \u201cWhy would we want state taxpayer dollars going to a business that is obviously not following best practices?\u201d<\/p>\n

Emails obtained by Documented show that, in February, Strive executives pitched the firm\u2019s proxy advisory services to officials at the Florida State Board of Administration, which manages retirement savings for public employees.<\/p>\n

It\u2019s not clear if the agency ultimately hired the firm, though Florida State Board of Administration\u00a0records<\/a>\u00a0from June include a corporate governance item listed as \u201cNew Proxy Research \u2014 Strive Advisory LLC.\u201d<\/p>\n

The Florida agency did not respond to an immediate request for comment. Strive has not registered to lobby in Florida.<\/p>\n

In South Carolina, Ramaswamy met with state house Republicans and pension officials \u2014 a meeting facilitated by SFOF member and state treasurer Curtis Loftis. Local ethics lawyer John Crangle told the Post and Courier<\/em>\u00a0that Ramaswamy\u2019s activity\u00a0raised<\/a>\u00a0\u201ca question of whether he\u2019s engaged in unregistered lobbying.\u201d<\/p>\n

\u201cMr. Ramaswamy cold-called Treasurer Loftis about engaging in business, much like vendors do every week,\u201d a spokesperson for the Loftis told\u00a0The Lever.<\/em>\u00a0\u201cThe state treasurer\u2019s office has not made any investments in Strive funds nor entered into any contracts for advisory or consulting services.\u201d<\/p>\n

Two recent lawsuits against Strive cast a shadow over the firm\u2019s business practices. Both allege that Ramaswamy and cofounder Frericks pressured employees to violate securities laws \u2014 by using pitch materials that promised future returns and by asking employees who weren\u2019t registered to sell securities to peddle them anyways.<\/p>\n

One suit, brought by a former employee in Kansas in June, says that Ramaswamy \u201cmisrepresented the company\u2019s finances to employees and investors,\u201d\u00a0according to<\/a>\u00a0Businessweek<\/em>.<\/p>\n

The second suit was brought by a former employee in New Jersey this August. That employee, Joyce Rosely, alleges that in addition to pressuring employees to violate securities laws, both Frericks and Ramaswamy \u201cunlawfully engaged in securities sales activities despite the fact that neither has a securities license.\u201d<\/p>\n\n \n \n \n\n \n \n

You can subscribe to David Sirota\u2019s investigative journalism project, the\u00a0Lever<\/i>,\u00a0here<\/a>.<\/p>\n\n\n\n

This post was originally published on Jacobin<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

Billionaire GOP presidential contender Vivek Ramaswamy bragged during last week\u2019s debate that he was the \u201conly person on the stage who isn\u2019t bought and paid for\u201d \u2014 even as he has brushed off concerns that the ultrarich have too much influence over politics and policy. But over the past few years, Ramaswamy leveraged relationships in [\u2026]<\/p>\n","protected":false},"author":1641,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1194419"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/1641"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=1194419"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1194419\/revisions"}],"predecessor-version":[{"id":1194420,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1194419\/revisions\/1194420"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=1194419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=1194419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=1194419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}