Page 55 - Bloomberg_Businessweek

If You Need a Friend in Washington ...

Don’t get a dog. Get James Glassman, whose writing often lines up with paying clients of DCI Group
Year 2006-16 2009 2013-present 2014 2015-present 2016-17
Place

Campaign Argentine bonds General Fannie Mae and Puerto Rico Puerto Rican Icelandic bonds
Motors bonds Freddie Mac Electric Power general obligation (and other assets)
shares Authority bonds bonds
Hedge fund Elliott Paulson & Co. BlueMountain Multiple hedge Autonomy
Management ? Capital funds Capital
Manager
Paul John Andrew Robert
Singer ? Paulson Feldstein Gibbins

DCI

Front group Investors Action World Growth Public Affairs Public Affairs Public Affairs
Alliance Institute Engagement Engagement Engagement
Op-ed Argentina “willfully “The Obama “In a breathtaking “The Recovery Act … “Bankruptcy may “Iceland was moving
incurred a massive administration display of greed, the strips basic rights look tempting as a in the right direction,
bond default in reminds me of an Treasury and the from creditors … way to zap public but degrading a major
2001 and still owes irresponsible third- FHFA changed the including many small employee unions. But asset—respect for
Americans more than world regime, skirting terms of the original U.S. investors with it’s a trap, with serious the rule of law—will be
$10 billion.” the rule of law and agreement that money in mutual consequences.” certain to discourage
handing economic accompanied the funds—while giving future investment.”
James prizes to political 2008 bailout.” continued protection James
Glassman, cronies.” to other bondholders, Glassman, James
James many of them hedge Glassman,
Washington Washington
James Glassman, funds.”
Times Examiner Wall Street
Glassman, Bloomberg Journal
View James 53
New York
Glassman,
Times
Roll Call
at the time, DCI was representing BlueMountain Capital treatment of foreign investors. Institute for Liberty, the Tea
Management, an owner of the utility’s bonds. A year later, Party-aligned group that previously advocated on Argentina,
he reversed himself, declaring that a Puerto Rico bankruptcy set up a website and a Facebook page called Iceland Watch
would be a “disaster.” Not long after, DCI started a campaign that advocated for the funds’ position. Glassman hosted a
for bondholders that would lose value in such a bankruptcy. panel discussion in New York and attacked Iceland’s position
(In his statement, Glassman said that “we all strive for consis- in the Journal and Bloomberg View. (Bloomberg LP, which
tency, but the facts on the ground in Puerto Rico changed.”) owns that site and this magazine, said it requires op-ed
Thanks to a string of court victories, Singer prevailed writers to disclose relevant financial interests.) More voices
against Argentina in 2016, earning his fund more than $2 bil- piped up, most of them recognizable from the Argentina
lion in profit. (In a statement, Elliott noted that thousands of campaign. DCI operatives began showing up at Reykjavik’s
bondholders and pensioners also benefited.) Other DCI proj- swankiest hotels and hiring local consultants for political
ects haven’t gone so well. Congress allowed Puerto Rico to guidance. Before a 2016 parliamentary election, Iceland
declare bankruptcy, and Fannie Mae shareholders have failed Watch bought full-page ads in Reykjavik newspapers hint-
to get the government to come to their aid. A major obstacle ing at misconduct by a central bank official.
has been Senator Bob Corker, who wrote a bill that would The ads, translated poorly, may have done more harm
wind down the company. Through a shareholder group that than good. (The only wrongdoing they revealed, one wag
it helped set up, DCI has promoted reports of ethical lapses commented online, was “a crime against the Icelandic lan-
by the Tennessee Republican. “It’s been pretty shocking to guage.”) But in the end, Iceland settled with the foreign funds
me,” Corker said at a 2016 hearing, “to see the lengths that last year on more favorable terms. Autonomy, which took
some hedge funds will go to try to shape public policy in a the improved deal, declined to comment, and Institute for
manner that might reap huge benefits.” Liberty didn’t respond to inquiries.
Glassman and the other pundits didn’t take a victory lap.
Thanks to DCI—and a lack of rules around disclosure— They simply went silent. A Reykjavik reporter noticed his
there are few limits to how far hedge funds can take this DCI contact suddenly stopped returning calls. The Iceland
practice. One of the company’s more incongruous assign- Watch website disappeared, and its social media accounts
ments to date was the case in Iceland, where Autonomy were erased. The money had done its work, and DCI was off
Capital went to court in 2016 to challenge the government’s to its next assignment.