Earlier this summer, Democratic U.S. Rep. and U.S. Senate candidate Alan Grayson acknowledged that he was managing three hedge funds in his own name, but denied that he was violating congressional ethics rules that prohibit sitting legislators from managing self-named investment entities.
But documents filed with the Florida secretary of state’s Division of Corporations earlier this month show that he has submitted the paperwork to take two of those funds out of his name.
One form shows that he has requested that the Delaware-based Grayson Fund General Partner, LLC be changed to the Sibylline Fund General Partner, LLC. Another form shows that he submitted paperwork to change the Cayman Islands-based Grayson Fund Management Co. LLC to the Sibylline Fund Management Company, LLC.
House rules and federal law state a member of Congress “may not permit [his or her] name” to be used by an entity that provides professional services involving a fiduciary relationship. But Grayson has maintained the funds offerings are exempt because all the funds’ investors are “qualified investors” and he has no “fiduciary responsibility” over the funds. Some attorneys who specialize in securities law severely questioned that assertion in a story written in POLITICO back in June.
Two ethics complaints against Grayson were filed with the Office of Congressional Ethics in the wake of the initial reporting on the issue. One was filed by the Foundation for Accountability & Civic Trust (FACT) in early July. The other was by St. Lucie County Democratic Party chairwoman Celeste Bush, an avowed supporter of Patrick Murphy, the South Florida congressman who is battling Grayson for the Democratic nomination for Senate in 2016. Bush accused Grayson of failing to properly disclose details of three hedge funds, including their investors and his income from them.
When asked for comment, Grayson spokesman Kevin Franck directed Florida Politics to the response he gave the Tampa Bay Times‘ Alex Leary on Sunday night. “There’s nothing wrong with the investor partnership using ‘Grayson’ in their name, but at this point, it’s simply easier to change the name than to argue about it,” Franck said in a statement.
Joshua Karp, a spokesman for U.S. Rep. Murphy, said the campaign won’t comment at this time.
Last month, however, Murphy did respond, issuing a statement in which he challenged Grayson about the hedge funds that he controls, and listed a series of questions that he called on the congressman to respond to.
