Documents show Alan Grayson's company paid to manage hedge fund
Public records obtained by the Tampa Bay Times add ammunition to critics who say Democratic U.S. Senate candidate Alan Grayson’s use of a hedge fund in the offshore tax haven of Caymen Islands may have violated U.S. House ethics rules that ban receiving improper outside compensation.
“I haven’t gotten one penny of compensation,” Grayson said, when asked about his fund’s 2011 prospectus obtained by the Times and documents he filed with the Securities and Exchange Commission earlier this month referring to “ongoing” management fees and incentive payments,
The congressman’s argument? He may be manager of the company paid to manage the funds, but that does not mean he is being paid.
“Management fees go to a corporate entity, not Rep. Grayson,” his office said in an email.
“An LLC is the fund manager,” said Grayson, referring to a limited liability company.
Grayson, 57, is the only officer listed in that LLC’s corporate filings. He signs official paperwork as that LLC’s manager, and on his 2012 and 2013 congressional financial disclosure form he list the LLC as one of his assets, worth between $15,000 and $50,000.
“Alan Grayson and/or related family entities or persons are the sole members” of the LLC, stated a 2011 memo to investors filed with the New York Attorney General’s Office.
Sugata Ray, a lecturer at the University of Florida’s Warrington College of Business, reviewed Grayson’s hedge fund documents for the Times.
“Everything in these records suggests he’s getting compensated,” said Ray, adding that it’s possible the fund did not make any money.