Powell says Cantor bet against economy; but Cantor bet a lot more on it succeeding
The campaign of Democrat Wayne Powell says Republican House Majority Leader Eric Cantor bet against the U.S. government by holding several thousand dollars in investments whose return is predicated on the downturn of the U.S. economy.
But Cantor’s camp says the six-term congressman from the 7th District is betting much more heavily on the government to succeed through the substantial, six-figure U.S. Treasury investments in his federal pension.
Specifically, Powell points to Cantor’s investment in ProShares Trust Ultrashort Lehman 20-year fund in Dec. 2009. The fund seeks investment returns by taking what is known as a “short” position on long-dated U.S. Treasury bonds. Cantor is believed to have invested around $3,300 in the fund.
The campaign charged that Cantor’s position in the fund presented a conflict for him in mid-2011 when he was intimately involved in bipartisan budget and debt ceiling talks. Cantor later walked out of the talks in a dispute over tax hikes.
“Cantor bet against his own team,” said Powell campaign strategist Dave “Mudcat” Saunders, likening the Henrico Republican to Pete Rose, the baseball player who was banned from the game for life after it was revealed he bet on baseball and the Cincinnati Reds, major league team he was managing.
The story first broke in 2010 with a Wall Street Journal report that saw the investment listed on Cantor’s 2009 disclosure statement. The online magazine Salon wrote about it after Cantor walked out of debt talks in June 2011. The story included a Cantor spokesman saying that the investment was meant to balance his portfolio given the substantial portion of the congressman’s pension that is invested in U.S. Treasury bonds.
Cantor campaign strategist Ray Allen said Wednesday that Cantor’s federal pension holds roughly $270,000 in Treasury debt, compared to the much smaller amount the congressman invested in ProShares, which reportedly has lost nearly two-third of its original purchase price.
The ProShares investment “didn’t have anything to do” with Cantor’s position during the debt talks, said Allen, who called the resurrection of the issue a sign of “a desperate campaign.”
Powell, out-polled and underfunded, is seeking to unseat the powerful Cantor from the 7th District seat he has held since 2000 with a bare-knuckled campaign of pointed public accusations attacking Cantor’s campaign and personal finances, as well as clever commercials questioning Cantor’s accountability to the district and his position on women’s reproductive issues.
Cantor has responded with ads of his own trumpeting his efforts for small business and accusing Powell of supporting higher taxes. He’s also launched with a withering direct mail campaign challenging Powell’s ethics that stems from a Virginia State bar complaint over his handling of a workman’s compensation case in Virginia beach several years ago.