Renaissance Technologies is a “quant hedge fund”, an investment firm which trades on quantitative models. Founded in 1982 by James Simons (Wikipedia describes him as “an award-winning mathematician and former Cold War code breaker”), the New York company’s day-to-day operations are split between Robert Mercer and Peter Brown, who share co-CEO title. Mr. Simons now serves as Board Chair.
OpenSecrets.org reports Simons has donated “about $11.5 million” in the 2016 election cycle, while Mercer “has spent upwards of $18.5 million. The organization also notes “Renaissance is a house politically divided.”
According to federal data, Renaissance Technologies has contributed $11,500,000 to outside groups supporting Hillary Clinton (D) for president, and $15,500,000 to outside Republican groups supporting Donald Trump’s bid for the White House.
Ignoring for a moment that Renaissance’s Robert Mercer has donated heavily to conservative organizations including Breitbart.com (Breitbart’s former head, Stephen Bannon, was named Trump’s campaign manager in August 2016; and, Kellyanne Conway, who has close ties to Mercer and his businesses, provides campaign services to both Trump, and GOP PACs.), the Heritage Foundation, and the Media Research Center; devaluing the impact this type of conservative influence would have on U.S. domestic policy; side-stepping the big elephant in the room that a hedge fund with positions in finance and banking (17.32%), technology (17.27%), and consumer cyclicals (12.68%) is the leading contributor in the 2016 election cycle, – there is the more serious question of Renaissance’s larger positions in Russian telecommunication firms, and, the type of information Renaissance is afforded as an investor in Russian firms with ties to Russian government.
Renaissance holds 866,100 shares in a class of stocks known as Sponsored American Depository Receipts (ADR) in a corporation named Vimpelcom LTD (VIP), a telecommunication firm incorporated in Bermuda with headquarters in Amsterdam.
VIP is a holding company for telecommunication providers in Russia.
Renaissance’s shares in VIP represents .01% of its portfolio or about $3,360,000, according to its most recent SEC filings. (Abram’s Capital Management, L.P., a firm with its largest holdings in Wells Fargo, has approximately $72 million invested in the company. Wells Fargo has shares with a market value of $ 1,344,000 invested in VIP as of its June 2016 filings.)
An SEC Investor’s Alert describes Sponsored ADRs as instruments which allow a non-U.S. company to enter “agreement directly with a U.S. bank”, at which time the U.S. bank may “arrange for record keeping, forwarding of shareholder communications, payment of dividends, and other services.”ADRs are issued by banks “on behalf of the foreign company whose equity serves as the underlying asset.”
PJSC VimpelCom, the first Russian company to trade on the U.S. stock exchange, is a telecommunication corporation founded in 1992, with headquarters in Moscow.
In 2008, OJSC merged with Golden Telecom (a provider of internet and communication services in Russia), and acquired a 50% stake in Euroset, Russia’s largest mobile phone retailer.
Prior to 2009 (the year the Russian firm fully merged with Vimpelcom LTD), it was this Russian version of the firm which traded on NASDAQ as VIP.
The most recently incorporated VIP has investments in telecommunication and technology products in Russia, the Ukraine, Italy, Greece, Algeria, Pakistan, and Bangladesh. In September, 2016, the company announced a partnership with Cisco Jasper (Cisco acquired Jasper for $1.4 billion dollars in March 2016), to expand B2B services. Jasper is an IoT technology firm with U.S. firms Ford, Amazon Kindle, Boston Scientific, and numerous cloud-based service providers.)
A 2014 CNNMoney article, “Who’s scared of a little geopolitical risk?”, made note Renaissance was “doubling down” in Russia, a region of the world which was not generating confidence from other analysts, skittish of the political and State unrest occurring in the Ukraine.
The reporter described Renaissance’s investment in Russia as one in which the hedge fund “may be betting that tension won’t escalate to dangerous levels.”
In August 2016, Bloomberg reported VimpelCom and MegaFon had “signed an agreement” in the development and operation of “new base stations with 4G support” to be deployed in “10 regions” in Russia. Bloomberg added the operation costs and profit would be divided between the companies.
According to an anonymous Russian blog, Sergey Vladimirovich Soldatenkov, MegaFon’s Chief Executive Officer, graduated in 1986 from the Saint Petersburg State University of Aerospace as a radio engineer, and served as an Aerospace engineer in the Russian army.
VIP has several new positions are U.S. telecommunication firms, including Yahoo Inc. (total shares held 1,313,700), COMCAST (total shares 827,238), ORACLE (1,809,132 total shares), Apple (1,096,033 total shares), and Palo Alto Networks, an enterprise provider offering security and firewall protection to corporations.
The hedge fund also holds positions in energy and casino gaming.
The other Russian firm mentioned in CNNMoney’s report on VIP’s position in Russia is Mobile TeleSystems OJSC (MBT), Russia’s largest mobile provider.
To describe these entangled corporations and subsequent volumes of records as transparent is to naively minimize the obliqueness which occurs when hedge funds and corporations are free to breed like Gremlins, and, when these funds are able to do so without transparency to either the government or investors as to how each of the funds and investments relate to another.
Renaissance, with between 11-25 total clients, has three funds totaling $71,839,022,318 (Form ADV from 2016-03-30) in assets under management.
In a July 5, 2016, Bloomberg noted the “Renaissance Institutional Equities Fund was up 4.6 percent last month” and that Renaissance Technologies, a $32 billion fund, also saw gains. The information was provided by an anonymous source.
It may be that analysts at Renaissance were relying on DNC leaks, which were released by Gufficer 2.0 in June in their models. However, since Bloomberg’s July article, Donald J. Trump has all but assured his loss in the Presidential election.
Looking forward, one question becomes how secure Americans feel in the validity of the information they have been provided by Trump and his surrogates, as to his campaign’s relationships with Russia, albeit technology firms or government.
Another curious thought might be how confident Donald Trump is in the information he has been provided by his advisers about Eastern Europe, the region and Putin. Mr. Trump has proven to be an ill-judge of character and has not demonstrated any sense of concern to the reputation of his own. Mr. Trump appears highly persuadable on matters, and he does not demonstrate a need for opinion outside his closely knit group of advisors, and fans.
It’s interesting to ponder how vulnerable the Republican party might be, if it is discovered Russia has influenced the U.S. presidential election (by financial or other means), and if it is somehow demonstrated that Russia’s ability to do so was influenced in some by way of a connection to the GOP candidate for presidential office.
From here, things go from bad to worse.
The U.S. government has escalated the tone in its alerts of Russia’s involvement in the U.S. presidential election.
The Department of Homeland Security has grown so alarmed, that the agency issued an August 2016 advisory notice offering the federal government’s assistance in aiding states in securing state voting machines and networks.
Georgia’s Secretary of State Brian Kemp rejected DHS’s offer and was quoted in a NextGov article as saying, “The question remains whether the federal government will subvert the Constitution to achieve the goal of federalizing elections under the guise of security.” The irony of this hubris is that NextGov reports Georgia utilizes Windows 2000 in its election machines.
The question also remains whether a state government’s or lawmaker’s ignorance will subvert the Constitution under the guise of state’s rights.
The United States lacks a quorum on the Supreme Court. If a hanging chad were to occur during this election cycle, the battle to the court the country goes. But this time, the Justices will be tasked with weighing national security interests against democratic processes.
This version of a court deciding an election because a government could not do its job would involve issues of federal versus state authority.
Which, is really what it has only been about for the last 50-years or so.
Does the Federal government have the power to decide in the interest of all Americans, when a state or local government is unable or incapable of ensuring the federal rights of those Americans who are at the mercy of ill-informed, or self-interested, governors and attorney generals?
Voting rights are a bedrock of American democracy.
For Southern states with ties to Donald’s Trumps brand of conservatism to not meet federal standards in concern to securing voting systems; with growing alarm over Russia’s attack on U.S. networks and databases; and, with open questions as to Donald Trump’s business and political connections in Russia, it is in the federal government’s interest to begin containing the problem, which will grow far more serious as we near the November 8 election.
Questions of the validity of a U.S. election will have ramification throughout the world, ensuring both instability on our streets and throughout the world.
The instability (unnecessary at its core) is unfathomable: Americans will be forced to withstand days, weeks and potentially months of attorneys filing motions; the news will run on 24-hour cycle reminding everyone the Republican Senate Judiciary Committee announced in February 2016 it would not hold hearings on any Obama Supreme Court nominees for the remainder of the year; and, constituents will be asking why a Supreme Court lacks a quorum, and therefore, cannot legally or practically provide assistance if the cases before the high court were to resolve in tie.
There is also a human component, as millions of Americans suffer under the uncertainty of a vulnerable and unstable government.
The question hinges on whether the federal government still maintains the constitutional power of war granted it following September 11, 2011.
If not, there may be a light: the court wrote in New York Times Co. v. United States, the U.S. has been granted “inherent power:
“So any power that the Government possesses must come from its “inherent power.” The power to wage war is “the power to wage war successfully. But the war power stems from the declaration of war.”
In the matter of NYTs v. U.S., the Court’s primary area of focus was whether the first amendment rights of the New York Times had been violated by a government with no constitutional authority (on merit), to abridge the freedom of the press.
As the press of 2016 is as curious as any entity as to what might be found in a trove of Trump documents, it isn’t likely the DOJ would face a first amendment challenge from respected media outlets.
If a United States intelligence community has reasonable suspicion the voting process in the U.S. is under imminent threat of foreign attack, it is bound by powers outlined within the U.S. Constitution. President’s Obama’s authority and power begin to take shape in Article II, Section I and Article VI.
A Southern Republican governor has refused the expertise of the greatest (to everyone but Donald Trump) spy agency in the world.
This seems (to the non-deplorable among us) to poorly reflect on the Governor’s ability to process relevant national security information against irrelevant (in the face of things) party interests.
Meanwhile, the Russian hack-a-thon continues unabated. In August 2016, NBC News reported that Russian hackers had broken into two U.S. voter databases. A breach occurred in Arizona’s voting system, and over 200,000 Illinois voter records were stolen.
Polls collected by Real Clear Politics i has Clinton leading Trump in Illinois between 6% – 13% in a two-way race. These numbers change in a 4-way race.
Let’s hope the records of all deceased have been purged from state voting databases, especially those databases which do not provide a print-out to voters.
As any good leader, executive or parent knows, there comes a time when the adult in the room must take charge.
In the matter of federal rights versus state’s rights, the adult in the room will be the branch of government who acts in the immediate and best interests of all Americans, and visitors.
To the victor goes the spoils (or the oil, if Trump has much to say about the outcome.)