A New York billionaire whose hedge fund made an estimated $2 billion profit at the conclusion of a more than decade-long dispute with Argentina donated $250,000 to support Sen. Mark Kirk’s re-election after Kirk’s intervention on the businessman’s behalf.

Kirk’s opponent, U.S. Rep. Tammy Duckworth, received more than $125,000 from employees of a downstate law firm which she helped by voting to protect its lucrative asbestos-injury business.

In both cases, the donations show how the candidates for the U.S. Senate in Illinois use their official positions to boost campaign donors’ narrow agendas, according to public records and interviews.

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The Kirk-Duckworth race also illustrates the growing influence of wealthy donors and corporations that take advantage of recent court rulings such as Citizens United to infuse political campaigns with unlimited sums of money.

A Better Government Association investigation analyzed candidate donor lists, super PAC records, and “dark money” organization expenditures, to reveal a pattern of financial and ideological interest funding for both candidates. As of June 30, Kirk raised a total of $11.3 million and Duckworth collected $10.1 million, making the Illinois contest one of the most expensive Senate races this year. That total only accounts for funds raised by candidates themselves and does not include the millions of dollars raised and spent by outside groups such as super PACs and dark money groups.

“A lot  of outside money is being spent on Senate races for control of the Senate — Illinois is one of those states” drawing special interest money, said Sheila Krumholz, executive director of Washington-based Center for  Responsive Politics.

The related court rulings, she said, allow groups “to raise  unlimited  donations from unlimited sources.”

Duckworth and Kirk declined requests for interviews.

Kirk’s campaign also declined to answer specific questions about donations, but said the Republican senator votes his conscience.

“Our campaign fully complies with the law … we believe the voters of Illinois deserve a level playing field. Despite the overwhelming money of big labor and an array of special interests attempting to defeat Sen. Kirk, we are confident he will once again defy expectations and win in November,” campaign spokeswoman Eleni Demertzis said.

Duckworth’s campaign said the Democratic congresswoman is concerned about the influence of large donations in elections.

“It’s clear that money plays too large a role in our politics,” said campaign spokesman Matt McGrath. “Citizens United gives out-of-state billionaires and corporations an unfair advantage over Illinoisans when it comes to electing our leaders.”

 

Asbestos

The partners and employees of an Alton law firm make up one of the largest  financial backers for Duckworth’s Senate race, donating more than $125,000.

Simmons Hanly Conroy LLC promotes itself as “one of the nation’s largest mass tort law firms and a leading voice for victims of mesothelioma and asbestos exposure.”  Mesothelioma is a deadly respiratory disease caused by exposure to asbestos.

The firm boasts winning more than $5 billion for victims, including a record-breaking $250 million for one client.

But Republicans, including Kirk, pushed to rein in asbestos awards by funneling claims through a federally administered court or office staffed by experts, replacing a system that Kirk has said is profitable for attorneys but isn’t fair to victims.

More recently, Duckworth and other Democrats in Congress twice voted against Republican backed bills that Perry Browder, a Simmons shareholder, says would “delay, and in some cases, deny justice and badly needed compensation to people suffering from asbestos-related diseases.”

A spokesman for Duckworth said there was no connection between the Simmons donations and her votes and asserted that the candidate’s position is intended to help veterans.

Perry Browder

Since January 2015, Simmons law firm employees donated $638,490 to Democratic federal candidates. The law firm employees were the largest single group of donors to Sen. Dick Durbin’s 2014 campaign. Durbin takes a lead role in beating back limits on asbestos awards. A Durbin spokesman said the senator’s only motivation is helping victims and there is no connection between his position on the issue and the donations.  

The Simmons law firm did not respond to multiple requests for comment.

Argentina connection

Kirk donor Paul Singer, the New York billionaire and co-owner of Elliott Management, which manages hedge funds, was locked in the middle of a 13-year legal battle with Argentina over payments on defaulted bonds, when the Senator took his side. Kirk wrote a letter to then U.S. Treasury Secretary Timothy Geithner, trying to apply pressure on the government of Argentina.

In 2001, around the time Argentina defaulted on its bonds, Singer, pictured above, and his hedge fund invested heavily in bonds originally worth $617 million upon maturity. At the time of Singer’s investment, the bonds traded at a steep discount.  

Later on, Argentina offered to pay investors about 30 cents on the dollar, a price the vast majority of bondholders accepted. But Singer and a few other hedge funds held out for more — they wanted to be paid the full value of the bonds plus interest.

The holdout investors filed a flurry of lawsuits, winning favorable rulings in some.  Singer used one  judgment  to  get a court order to take  possession of an Argentine Navy ship docked in Ghana.

Singer and the other holdouts also formed a lobbying organization, American Task Force Argentina (ATFA), spending $7.8 million since 2007 to persuade Congress as well as the Obama Administration to pressure Argentina to resolve its differences with the bondholders.

Singer also donated to Kirk’s successful 2010 race and made another donation in 2014. The donations of $4,800 and $5,200 were the maximum direct-to-candidate contributions allowed by federal law at the time. Some of his employees gave as well.

In June 2011, Kirk intervened. He wrote Geithner urging him to instruct America’s representative to the World Bank to suspend loans to Argentina until it paid the bondholders.

“Despite Argentina’s failure to repay United States creditors in accordance with court judgments, Argentina has continued to receive loans from the World Bank,” Kirk wrote.

ATFA, the hedge funds’ lobbying organization, made the letter public and praised Kirk’s actions, prompting Argentina’s Ambassador to the U.S., Alfredo Chiaradia, to write Geithner saying: “The letter from Senator Kirk is clearly part of a campaign by vulture funds attempting to discredit Argentina  in order to further their ‘raison d’etre,’ i.e. sovereign debt profiteering.”

Finally, in December 2015, a newly elected president took office in Argentina, and decided to negotiate with Singer and the other holdouts.

The new government paid the hedge funds $4.65 billion, including interest — of that $2.4 billion going to Singer’s fund. The payouts were 10 to 15 times what the hedge funds paid for the bonds, according to a Congressional Research Service report. Using that calculation, the profit for Singer’s hedge fund was about $2 billion.

Around that time, Singer’s money began to flow to Kirk’s re-election race. Singer donated $100,000 to Independent Voice for Illinois, a super PAC supporting Kirk, on December 31, 2015. Singer gave the PAC another $150,000 in June 2016.

A spokesman for Singer said that the billionaire has a long record of supporting Republican and conservative candidates and causes. Donations to Kirk, he added, relate to Singer’s policy interests such as maintaining Republican control of the Senate, same-sex marriage and foreign policy.

“Senator Kirk has been a leader on national security and he was one of the first Republican members of the U.S. Senate to support LGBT marriage equality, two areas that Mr. Singer cares deeply about,” Elliott Management spokesman Michael O’Looney said.

He denied any connection between Singer’s business interests and the donations, saying “dozens of members of Congress from both sides of the aisle spoke out against Argentina’s conduct toward its creditors … the majority of these members did not receive any campaign contributions from Mr. Singer.”

Murray energy

In June 2015, Murray Energy Corp. donated $100,000 to the super PAC supporting Kirk 12 days after the Senator cast a deciding vote that stalled an Environmental Protection Agency initiative to toughen rules on coal-fired power plants. The anti-environment vote was a departure for Kirk. But it was a boon to Murray, the largest underground coal mining corporation, which had filed seven lawsuits against the EPA and its new rules.

Robert Murray’s Ohio-based company is the largest coal producer in Illinois and  has accused the Obama administration and “radical environmentalists” of trying to kill the coal industry.

Murray Energy is the largest corporate donor to Independent Voice for Illinois. A Murray spokesman said the company  was  proud to support Sen. Kirk who  had worked  to defend coal jobs and “reliable, low cost electricity for people on fixed incomes and our poor.”

A few months after that donation came in, Kirk and fellow Republicans again sided with Murray, voting to roll back a federal environmental safeguard known as the Clean Water Rule. The roll-back did not pass.

Kirk later reverted to his pro-environment posture, more popular in Illinois, and joined Democrats in a vote that favored new power plants regulations.

In an emailed response to questions, a spokesman said the company was “disappointed” in that vote, “however we have not discussed it with the Senator.” Nor, he said, had Murray Energy talked about the donation with Kirk.

Kirk and his super PAC

Super PAC rules allow outside groups to collect unlimited donations as long as there is no coordination with the candidates they support.

If the candidate did call the shots, the super-funding would be a clear violation of the federal limits that still exist on direct contributions to candidates.

And yet, Kirk’s former chief of staff and one of his current fundraisers played leading roles in the political committee, Independent Voice for Illinois, which supports him.  

Eric Elk, the former chief of staff, is currently the political strategy consultant for the committee, earning $60,000.

Caryn Eggeraat, Kirk’s longtime campaign fundraiser, also raised funds for the super PAC. In a brief phone call, Eggeraat said she has left the committee, where she earned $72,500.

In her role as campaign and leadership PAC fundraiser for Kirk, Eggeraat collected more than $350,000 since January 2015.

Since the rules governing super PACs were first issued, the Federal Election Commission decided that fundraisers who work for a candidate as well as a super PAC are not necessarily breaking the rule banning coordination.

 The super PAC has spent $1,112,079 so far on ads attacking Duckworth and her position in favor of lifting sanctions on Iran, which the ads call the “leading state sponsor of terrorism.” The super PAC also spent $55,639 on ads supporting Kirk.

Duckworth does not have a super PAC and has no plans to create one, her spokesman said.

Elk did not respond to requests for comment.

Dark money

Of even more concern is the flow of so-called dark money because donors’ names are kept secret.

Like super PACs, dark money organizations accept donations of any amount, including corporate money, but unlike super PACs, they are set up as nonprofits, which are not required to reveal donors’ names.

The biggest source of dark money supporting Duckworth is a group with the benign name “VoteVets Action Fund,” suggesting a politically active group of war veterans who have pooled resources.

While omitting donor names, the group’s latest tax return contains clues as to their wealth. The average donation in 2014-2015 was $106,000. The largest donation was $805,000. The smallest was $5,000.

Other publicly filed reports reveal some of VoteVets’ funding sources. A 2010 tax return filed by the Alliance for Climate Protection, chaired by Al Gore, reports it donated $2.6 million. In 2014 and 2015 labor unions representing grocery store, food processing plant, laborers, and government workers donated $1.3 million, according to U. S. Department of Labor reports.

So far, VoteVets Action Fund has spent $623,000 on television ads slamming Kirk’s positions on veterans’ benefits and military expenditures. The Senator’s campaign manager called one such ad “blatantly false.”

VoteVets has not responded to requests for comment. Duckworth’s spokesman had no comment on the group, but said the candidate supports changes to limit the role of “dark money.”

“Current policies make it too easy for dark money to flood into campaigns,” spokesman Matt McGrath said.

 Kirk has his own source of dark money. The U. S. Chamber of Commerce, which does not disclose donors, spent $550,150 on television ads that promote him as fighting for Illinois and job creation. Kirk and the Chamber are both active supporters of the Trans-Pacific Partnership trade deal and the reauthorization of the Export-Import Bank.