http://www.politico.com/story/2014/02/matt-bevin-tarp-kentucky-senate-race-2014-103351.html?hp=r8Kentucky Senate race 2014: Matt Bevin, Mitch McConnell and TARP
By JOHN BRESNAHAN | 2/11/14 12:09 AM EST
Matt Bevin, who is challenging Sen. Mitch McConnell in a Republican primary, calls the 2008 federal bailout of banks and Wall Street giants “irresponsible” and says he would have opposed it as a senator.
Yet back in 2008, as an investment fund president, Bevin backed the $700 billion Troubled Asset Relief Program, as well as the government takeover of troubled mortgage giants Fannie Mae and Freddie Mac. McConnell supported TARP, and the Bevin campaign repeatedly reminds voters that the Senate minority leader calls that vote “one of the finest moments in the history of the Senate.”
Bevin also supported the Federal Reserve’s decision to begin buying commercial paper issued by banks.
The widespread government intervention in U.S. financial markets during the economic crisis — and the debt shouldered by the federal government as a result — is a sore point for conservative groups, some of which are supporting Bevin’s challenge to McConnell in this year’s Kentucky Senate primary.
A Bevin spokeswoman said the GOP candidate has not changed his position on these issues, although Bevin’s statements from that time are different from what he is saying now. Bevin campaign spokeswoman Rachel Semmel said, “Matt has always opposed the TARP bailout and similar misuses of taxpayer dollars” in a statement to POLITICO.Bevin has made McConnell’s support for TARP the centerpiece of his challenge to the powerful incumbent senator. It was part of Bevin’s first campaign ad, and he raises McConnell’s views repeatedly in stump speeches and media interviews.
“It was the government picking winners and losers. It was an abdication of free market principles. I had a problem with how it went down,” Bevin said in an interview with Breitbart in late November.
A former U.S. Army officer, Bevin opened an investment fund when he moved to Louisville, Ky., in 1999. The businessman has since sold several of his investment companies, reaping millions of dollars in profits. He is currently CEO of a Kentucky-based hedge fund, according to media reports.
An Oct. 28, 2008, report for investors of Veracity Funds obtained by POLITICO — signed personally by Bevin as president of the fund — praised the federal government’s unprecedented intervention in the U.S. financial markets at that time.
“Most of the positive developments have been government led, such as the effective nationalization of Fannie Mae and Freddie Mac, the passage of the $700 billion TARP (don’t call it a bailout) and the Federal Reserve’s intention to invest in commercial paper,” wrote Bevin and Daniel Bandi, chief investment officer and vice president of the fund. “These moves should help to stabilize asset prices and help to ease liquidity constraints in the financial system.”
Bevin and Bandi added: “The government actions to date have been reasonably swift and substantial. The Federal Reserve seems to understand the magnitude of the problem and the underlying issues involved.”
A Bandi-signed report from April 10, 2009, praised the Democratic-backed $787 billion stimulus bill — which McConnell opposed.
“Some of the positive developments include the numerous programs from stimulus to the various Treasury acronyms (TARP, TALF, PPIP) to the Fed’s aggressive balance sheet growth. To what degree is open to some debate, but our government has taken the challenge head on and has responded like no other country,” Bandi wrote.
Bevin later filed a Securities and Exchange Commission certification — as required by law — saying he had reviewed both reports and that they were accurate.
Semmel said Bandi, as the chief investment officer, was responsible for what was said in both documents, although Bevin was president and founder of the investment fund.
“The investment commentary in the Veracity prospectuses were always written by the Chief Investment Officer of the sub-advisor to the Veracity funds,” Semmel said in a statement. “In his role as President of Veracity, Matt signed every prospectus. Matt’s signatures were a formality that were not intended to be an endorsement of the opinions of others.”
Semmel added: “Accusations like these are ironic given that Sen. McConnell has been one the biggest champions of bailouts and misuse of taxpayer dollars in the U.S. Senate.”
A Michigan firm purchased Veracity Funds — controlled by a Bevin-founded holding company — in 2010, according to media reports. Bevin had assets in Munder Capital Management, worth between $1 million and $5 million, according to a financial disclosure report he filed last year. As part of the sale agreement, Bevin was made a partial and passive owner of Munder, meaning he has no say in how the company does business.
A McConnell campaign spokeswoman blasted Bevin for his apparent TARP reversal, arguing it was part of a general pattern of Bevin misrepresenting his record in order to try to score political points.
“This is nothing short of a con man being caught red-handed in the middle of a sale,” said Allison Moore, McConnell’s spokeswoman. “If it wasn’t clear that Matt Bevin isn’t who he says he is after his MIT debacle, it sure is now.”
Bevin’s now-revised LinkedIn biography once implied that he attended MIT, but the candidate took part in only a three-week seminar there.
McConnell has hit back hard, asserting that Bevin tells different stories about his past and positions on issues depending on the audience and the day.
McConnell tried to paint his rival as “Bailout Bevin” for obtaining $200,000 in Connecticut state grants to help his companies rebuild after a 2012 fire. McConnell has also slammed Bevin for eight local tax liens his company was assessed with for failing to pay $116,000 in taxes in recent years.
Yet neither of these attacks, or the news that Bevin backed TARPwhen he was running an investment fund, has shaken the support of some conservative groups.
“Mitch McConnell is trying to smear Matt Bevin because he’s terrified of losing the Republican primary,” said Matt Hoskins, executive director of the Senate Conservatives Fund, which is backing Bevin.
“Mitch McConnell helped pass the Wall Street bailout and has requested stimulus funds from President Obama at least a dozen times. He can’t defend his record so he’s trying to confuse voters about where his opponent stands. Mitch McConnell is a fraud and Kentucky voters know it.”