Key Takeaways
- • Thirteen 2020 presidential candidates collectively received $230,900 in donations from individuals employed at fifteen hedge funds holding Puerto Rican debt, raising ethical concerns about campaign financing tied to vulture fund investments.
- • Bernie Sanders and Elizabeth Warren returned their contributions ($2,700 and $1,000 respectively) from hedge fund employees following pressure from progressive activist groups, citing opposition to Wall Street funding of campaigns.
- • Four major Democratic candidates—Joe Biden, Kamala Harris, Beto O'Rourke, and Pete Buttigieg—have not committed to returning donations from hedge fund sources, despite activist demands.
- • Sanders and Warren co-authored legislation to cancel outstanding Puerto Rican debt, which would eliminate returns on "vulture fund" investments purchased at distressed valuations, directly conflicting with hedge fund profit models in the territory.
- • The Center for Popular Democracy and allied activist organizations explicitly linked acceptance of hedge fund donations to complicity in austerity policies harming Puerto Rico's population.
Summary
A coalition of progressive activist groups has pressured 2020 presidential candidates to reject campaign contributions from hedge fund employees invested in Puerto Rican debt, framing the issue as a test of political commitment to Puerto Rico's economic recovery. According to The American Prospect, thirteen candidates received a combined $230,900 from individuals working at fifteen different hedge funds holding positions in Puerto Rican debt instruments.
Bernie Sanders and Elizabeth Warren responded by returning their contributions, though the dollar amounts were minimal. Warren returned a single $1,000 donation from a Taconic Capital employee, while Sanders returned one $2,700 contribution from a BlueMountain Capital employee. Given both candidates' public opposition to Wall Street funding and their advocacy for debt cancellation, the modest donation levels align with their established funding patterns. The two senators co-authored legislation targeting the outright cancellation of Puerto Rico's outstanding debt, a proposal that would directly eliminate returns on the so-called "vulture fund" investments—distressed debt purchased at steep discounts with expectations of high recovery rates.
Biden, Harris, O'Rourke, and Buttigieg have not publicly committed to returning comparable donations, according to the activist pressure campaign. Julio López Varona, co-director of community dignity campaigns at the Center for Popular Democracy, framed the issue as a litmus test for genuine solidarity with Puerto Rico, stating that candidates cannot claim to be "friends of Puerto Ricans while taking money from hedge funds driving austerity on the island." The activist coalition's position reflects broader concerns about hedge fund restructuring agreements imposed on Puerto Rico following the territory's fiscal crisis, particularly regarding the Puerto Rico Electric Power Authority (PREPA) and other essential services facing service cuts tied to debt servicing obligations.
Bernie Sanders and Elizabeth Warren responded by returning their contributions, though the dollar amounts were minimal. Warren returned a single $1,000 donation from a Taconic Capital employee, while Sanders returned one $2,700 contribution from a BlueMountain Capital employee. Given both candidates' public opposition to Wall Street funding and their advocacy for debt cancellation, the modest donation levels align with their established funding patterns. The two senators co-authored legislation targeting the outright cancellation of Puerto Rico's outstanding debt, a proposal that would directly eliminate returns on the so-called "vulture fund" investments—distressed debt purchased at steep discounts with expectations of high recovery rates.
Biden, Harris, O'Rourke, and Buttigieg have not publicly committed to returning comparable donations, according to the activist pressure campaign. Julio López Varona, co-director of community dignity campaigns at the Center for Popular Democracy, framed the issue as a litmus test for genuine solidarity with Puerto Rico, stating that candidates cannot claim to be "friends of Puerto Ricans while taking money from hedge funds driving austerity on the island." The activist coalition's position reflects broader concerns about hedge fund restructuring agreements imposed on Puerto Rico following the territory's fiscal crisis, particularly regarding the Puerto Rico Electric Power Authority (PREPA) and other essential services facing service cuts tied to debt servicing obligations.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.