Election 2016

Ted Cruz Wouldn't Have Won Iowa Without This Secretive Computer Scientist-Turned-Hedge Fund CEO

Meet the extremist, reclusive billionaire who made Cruz’s candidacy possible.

Photo Credit: CJ Hanevy/Shutterstock

When Bernie Sanders rails against Wall Street’s economic and political power, and says that Supreme Court decisions such as Citizens United have opened the door to billionaires poisoning American democracy, he isn’t talking about Donald Trump, whose exploits have filled tabloids for years. He is referring to men more like Robert Mercer, the secretive computer scientist-turned-hedge fund CEO without whom Ted Cruz would be another backbench crank, not the winner of Iowa’s GOP presidential caucus.

Mercer, 69, who has never given an interview about his politics, and is famously tight-lipped in public settings, caught the Washington media’s attention last year when he gave $11 million to the Keep The Promise super PAC supporting Cruz, along with a handful of other billionaires. But he’s not just Cruz’s biggest donor. One of this life-long data analysts’ firms, Cambridge Analytica, has been at the center of the Cruz campaign psychologically profiling and targeting voters.

If that sounds a bit spy movie-like, where the super rich make and play by their own rules, have bottomless resources, respect only those in similar unchartered waters, well, it is. And it also is an apt description of Mercer and the high stakes political games this reclusive but extremely smart billionaire is now playing.

That’s the takeaway from a series of recent profiles from Bloomberg.com, The Daily Beast, and The Washington Post. What emerges is not a calculating but off-the-cuff narcissist like Trump, but a disciplined outside-the-box thinker who embraces virtually every draconian ultra-right wing posture; from backing the most ardent climate-change deniers to reviving the gold stadard behind U.S. currency. These, and many other anti-government beliefs are made possibly because Mercer’s computer-powered hedge fund made billions for itself—it stopped taking outside investors. In 2014, it was singled out by Senate Democrats for evading billions in taxes in an ongoing IRS dispute.

What follows are snapshots from the recent Mercer profiles, emphasizing his relationship to Ted Cruz, but also glimpsing inside the bubble of where the wealthiest right-wingers are unduly influencing a presidential election.

1. The temple and the money changers. Cruz, of course, is outspoken and uncompromising and staunchly anti-abortion, anti-reproductive choice, anti-gay, and loud defender of Christian religious liberty. But the very day he announced his candidacy at evangelical Liberty University in Virginia, he quickly departed for a fundraising dinner at the lavish Manhattan home of Robert Mercer’s politically active daughter, Rebekah Mercer, where the first issue concerning taxation in his speech pledged abolishing the IRS. Mercer’s firm and the IRS are still fighting over $3 billion in taxes, The Daily Beast reported, although other reports have said the sum is twice that. Mercer personally skipped Cruz’s party, which the profiles say is typical for him as a man who likes to watch from the margins.      

2. Deep pockets for a who’s who of the right. Cruz is said to have caught the attention of Mercer several years ago, when both attended a meeting of the free-market advocacy group, Club for Growth. Mercer’s family foundation, which press reports suggest is run by his daughter, have been large donors to a range of far-right groups: from the climate science-denying Heartland Institute; to the Center for the Defense of Free Enterprise; gold-standard embracing American Principals Project; and out-there enterprises such as Doctors for Disaster Preparedness—which encourages physicians to stockpile drugs in response to Obamacare; and Oregon Institute of Science and Medicine, whose founder’s unsuccessful bid for U.S. House was aided by $600,000 in negative ads later traced to Mercer.

In a recent interview, progressive author and anti-corporate activist Naomi Klein told BillMoyers.com about her candid discussions with the Heartland Institute’s director about why they’re so vehemently anti-science on climate change. Klein said Joseph Bast replied, “We realized that if the science was true that would allow liberals to justify pretty much any kind of regulation, so we took another look at the science.” In World War II, the government quickly restructured the biggest U.S. industries for the war effort. That fear—of federal intervention—appears to a major driver behind Mercer’s career path and political activism.

3. Wealth has its privileges and then some. The profiles show that Mercer, like many of the richest Americans, not only marches to his own beat but has no shortage of personality quirks. Beyond being notoriously publicity averse and known for speaking as little in public as possible, he’s an exacting kingmaker in his domain. The Daily Beast recounted that he was sued in 2013 by household help at his Long Island estate for forcing them to work 65 hours a week without overtime, including docking their pay for infractions such as “failing to replace shampoos and other toiletries if there was an amount of less than one-third of a bottle remaining; failing to properly close doors; failing to leave extra towels in the bathroom; failing to change the razor blades in the shaver; failing to level pictures; leaving cleaning items out; leaving items in the refrigerator; and improperly counting beverages.”

Mercer, apparently a model train fanatic, sued a contactor when he discovered that he had been overcharged for building a massive HO model railroad room at his mansion. “Mercer said he had contracted to pay $119,200 but had been billed for $2,694,833. He seems to have paid the bill before he noticed that he had been overcharged to the tune of $1,990,164,” they reported. Bloomberg.com’s profile gave another example. “Through Centre Firearms, a gun dealership he owns with a group of investors, he recently acquired one of the country’s largest collection of machine guns and historical firearms.” But he is said to be a fierce defender of his family, citing one daughter’s desire to play college football after a notable career in high school. She sued Duke University in federal court and won a gender discrimination judgement in 1997.

4. A government-hating computer programming pioneer. Mercer’s career as a pioneer computer programmer and then math whiz who outsmarted Wall Street with his computer-generated hedge fund bets was propelled by a deep disrespect for the federal government job, even though it was the military who gave him his first job where he could work on advanced computers. He explained that bias in 2014 when accepting a lifetime achievement award from the Association for Computational Linguistics—apparently his longest public statement.

When he went to work at a federal nuclear weapons lab in New Mexico after college, his discovery of ways to improve computing speed was squandered by government bureaucrats. “Instead of running the old computations in one-hundredth of the time, the powers that be at the lab ran computations that were 100 times bigger,” Mercer said. “I took this as an indication that one of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget. Which has left me ever since with a jaundiced view of government-financed research.”

Mercer went onto work at IBM, where his statistical analysis of language is seen as the precursor to today’s Google translation tools. In his 40s, he was among a few IBM computer programmers who were recruited to work for the hedge fund, Renaissance Technologies. “The hedge fund was the brainchild of James Simons, a former military codebreaker and math professor who has an important theory named after him,” Bloomberg wrote. “Renaissance operates more like a university math department than a Wall Street trading shop. Dozens of math and physics Ph.D.s work on a 50-acre campus complete with a library, a gym, and tennis courts, using computers to crunch market data and spot patterns a human trader would overlook... He and a colleague from IBM, Peter Brown, rose quickly through the ranks, and when Simons retired in 2009, they became co-CEOs.”

5. Reading Ayn Rand and Seeing Themselves.

At Renaissance, according to Sebastian Mallaby’s book, More Money Than God, its main investment fund averaged earnings of 39 percent per year between 1989 and 2006. Bloomberg reported that Renaissance and the IRS are still fighting in proceedings over $6.8 billion in unpaid taxes, noting that “because the Medallion fund is open only to Renaissance employees, it’s likely that most of the tax savings went to the firm’s top executives.” That, of course, includes Mercer.

Business careers like that is a common feature among arch-libertarians, who feel they have accomplished what then did in life without any help from anybody else, especially the government. They become vociferously anti-government, opposing all forms of regulation and public responsibility, whether paying taxes or bowing to science that finds harmful effects from the business activities led by men like themselves. This is what Mercer shares with the Koch brothers and others in the anti-regulatory right wing of the Republican Party. And it perfectly explains the causes and candidates that Mercer backed before Ted Cruz. As the Washington Post noted, “Groups he funds have attacked the science of global warming, published a book critical of Hillary Clinton, and bankrolled a documentary film celebrating Ayn Rand.”

6. Before Ted Cruz, Dr. Art Robinson?It’s no surprise that outside-the-box achievers like Mercer would be drawn to others who don’t fit into the mainstream. The Oregon Institute of Science and Medicine, created by Dr. Art Robinson, has received large sums from Mercer’s foundation, which, as the Daily Beast put it, “‘compiles ‘metabolic profiles’ with what may be the world’s biggest collection of urine samples.” The newsletters from Robinson, now 73, say this profiling will diagnose disease and prolong life, but he also touts the benefits of radiation exposure, praises nuclear power, rails against climate change science, and derides public school education and the medical establishment.

When Robinson decided to run for Congress against the Democratic incumbent, Rep. Peter DeFazio, Bloomberg.com said Mercer anonymously spent $600,000 of dollars on attack ads. “They [Mercer and the attack ads] are both radical anti-tax, anti-regulation, rabidly anti-abortion and absolute climate-change deniers,” DeFazio told the Post. “It came out of nowhere, and in the end it went nowhere.” Bloomberg reported that “Robinson knew Mercer slightly, as a donor to his research projects and a subscriber to his newsletter. Once, he’d even visited Mercer at his extravagant mansion on Long Island Sound. He says they’ve never discussed politics.”

7. Onto other far right wing crusades, including Ted Cruz. Mercer developed a taste for edgy and fringe political causes, the profiles say, such as backing a campaign for the death penalty in Nebraska, ads in New York City opposing the so-called ground-zero mosque near the 9/11 site, Idaho activist Fred Kelly Grant, who travels the county saying environmental laws are part of a United Nations plot to empty rural America, and reviving the gold standard. These strands all underscore why Mercer would be drawn to Ted Cruz, who is as outspoken as Mercer is circumspect, but constantly talks about freedom and liberty.

“Mercer may have even taken it as a positive sign that Cruz was distrusted and generally reviled by his own colleagues in the Senate,” the Daily Beast reported. “Cruz echoed his backer’s views on everything from guns to the gold standard to scrapping the EPA as well as the IRS.” Meanwhile, Cruz’s campaign has given a Mercer investment, the psychological profiling and data-mining firm Cambridge Analytica, a seat in his campaign’s inner circle—where it is targeting supporters, who have been sent mailings citing and grading their voting histories.

Bloomberg.com called Mercer “one of the most enigmatic and powerful forces in U.S. politics” and gave some statistics. “Beginning around the time of Robinson’s race, Mercer has put at least $32 million behind conservative candidates for office, including $11 million for a group supporting Texas Senator Ted Cruz’s campaign for the Republican presidential nomination. So far, Mercer is the biggest single donor in the race. Working with his daughter Rebekah, he’s spent tens of millions more to advance a conservative agenda, investing in think tanks such as the Heritage Foundation and the media outlet Breitbart.com.”

Billionaires And American Democracy

Nobody should be surprised that men who spend their lives making vast sums of money see political power as something they can also acquire. But it’s one thing to give the maximum legal donation as individuals to candidates under federal law—several thousand dollars—and another to take advantage of loophole-creating Supreme Court decisions to single-handedly propel a demagogue like Cruz who otherwise would never be a viable presidential candidate.

But that’s what has happened with Mercer and Cruz, even if the Texas senator flames out in coming weeks as the 2016 nominating season continues. When the United States was founded and Constitution drafted, the framers only gave voting rights to property owners who were men. The history of American democracy is a slow arc toward inclusion, including democratizing the right to select candidates and to vote. But what’s happened today, as presidential candidates like Bernie Sanders point out, is the wealthiest Americans are colonizing the process.

There’s no denying that Mercer’s accomplishments in business are impressive, but that doesn’t mean that his fringe right-wing political beliefs should gain fast-track entry into a presidential campaign. But that’s what has happened with Cruz’s candidacy, the most dangerous demagogue in the 2016 GOP field.  

 

 

 

Steven Rosenfeld covers national political issues for AlterNet, including America's democracy and voting rights. He is the author of several books on elections and the co-author of Who Controls Our Schools: How Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter School Industry (AlterNet eBook, 2016).

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