A conservative political advocacy group attacking Obama for supposedly raising gas prices received a “seven-figure check” from a leading Wall Street oil speculator.
While conservative organizations — and even Murdoch’s Wall Street Journal – agree that presidents have no control over gas prices, excessive oil speculation has been blamed by economists for 15% of the increase in the price of crude oil over the last decade.
Crossroads GPS, a political organization run by strategist Karl Rove, has spent $1.7 million on a new national ad campaign blaming President Obama for making gasoline cost “too much.” But the organization has in the past received substantial funding from Paul Singer, manager of a hedge fund responsible for some of the highest volume of oil trading in the country.
I received a leaked document from the CFTC — the regulatory body that is set up to monitor commodity speculation — revealing the one day oil trading information from 2008. This list of speculators … shows that Elliott Management is among the top financial firms with the highest volume of trades in the country, up there with Goldman Sachs and Credit Suisse. Currently, most oil speculation is conducted on private exchanges and through investment banks, so the public left in the dark about who is trading the world’s oil supply. The document shows Singer’s firm with bets on over 50 million barrels of oil that particular day.
A blockbuster Wall Street Journal story in 2006 revealed that Singer’s firm was among several hedge funds that paid lobbyists to gain political intelligence on an asbestos bill working its way through Congress — with the hope of using inside information to profit off of asbestos-related companies. But what makes Singer interesting in the context of this latest attack ad is how his business interests conflict with the message about Obama causing high gas prices.
As a Super PAC, details of Crossroads’ donors is confidential. But Peter Stone of the Center for Public Integrity was able to get an inside look at leading GOP political operations in 2010,reporting that Singer had written a check to Crossroads for more than a million dollars to fund attack ads.
The New York Times recently profiled top GOP funders, calling Singer “among the most-sought-after Republican donors in the country.” He has also funded campaigns to tear down the 99% movement.
With the support of wealthy donors like Singer, conservative groups have undertaken an aggressive campaign to undermine Obama’s energy policies, claiming that he has limited oil production and driven up the price of gasoline.
And multiple analyses, including the most recent from the Associated Press, show zero correlation between increased domestic drilling and the price of gasoline over the last 30 years:
That’s because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline.
“Is President Obama responsible for spiraling price of gasoline? Republicans say yes, but the facts say no,” wrote Cato scholars in a recent analysis.
So what’s driving up prices? Global supply and demand is one.
Another factor experts are warning about is excessive speculation. Today, brokers betting on the price of oil — firms like Singer’s Elliot Management — represent about 70% of all crude purchases.
Michael Greenberger, a former regulator at the Commodity Futures Trading Commission (CFTC), recently called excessive speculation “a fancy word for saying that gamblers wearing Wall Street suits have taken these markets over.”
Bart Chilton, a current commissioner with the CFTC, said he believes Wall Street speculators areadding several hundred dollars to the gasoline budget of Americans each year.
Not only are the ads claiming Obama is driving up the price of gasoline completely false, they’re potentially being funded by people who actually do have a role to play in increasing prices at the pump.