If Alan Grayson were a Republican, the press would be all over him like a bad hairspray.
One of the richest men in Congress is defrauded out of $18 million -- snared in a felonious investment scheme not just this once, but for the second time -- and he's more cheesed off because the court didn't keep his name out of it than he is in how he lost the money.
They should have been more careful, should have used my initials throughout rather than using my name, said Rep. Grayson after fraudster William Dean Chapman was sentenced to 12 years in federal prison.
Apparently Grayson believes the federal government keeps its documents secret.
In court papers, where he expected his identity to be protected with the use only of his initials A.G., twice he is mentioned by name. So, the story of his victimization came out, as it was bound to do on Monday -- albeit softly, in mainstream media that mostly lean his way.
Here's how Chapman's scheme worked:
Clients would turn over their stocks to him as collateral for a loan. Then Chapman would let the clients borrow about 90 percent of the stocks value.
If the stocks bombed, borrowers could walk away and keep the money they were loaned. But if they did well, borrowers would repay the loan with interest. Chapman then was supposed to return the stocks to the investor at their increased value.
Chapman instead sold the stocks. He had no way to fulfill his obligations if a clients stock portfolio did well.
Apparently Grayson's stocks performed astronomically well while they were entrusted to Chapman and his company, Alexander Capital Markets.
In 2007, Grayson had $9.35 million in a stock portfolio that Chapman was supposed to be holding as collateral. In that year alone, the portfolios value increased by 147 percent, to $23 million, according to a chart in the court documents.
It didn't go sour for Chapman overnight. You have to wonder why none of it rang a bell with Grayson. Why? Because it wasn't the first time the congressman has lost tens of millions of dollars in a fraud scheme.
According to the New York Daily News, in 2009, Grayson won a $34 million judgment after he filed a lawsuit in South Carolina under federal racketeering laws against a company called Derivium Capital. Deriviums business plan for hedging an investors stock profile was almost identical to Chapman's plan outline.
This story should scare Americans and certainly Floridians just a little. Grayson, who represents the 9th District in Central Florida, has a vote in the Congress of the United States. He makes value judgments for We the People every day. He invests our money ... with what risky philosophy? What scruples?
This is not a question of his intelligence. Grayson is bright as a button. He graduated from Harvard and Harvard Law School summa cum laude and magna cum laude respectively. He gained fame long before his election, in a case against a company called Custer Battles -- conducting the only successful prosecution of a contractor profiting illegally from the war in Iraq.
Check out Grayson's background. His entire law career has been a lesson in how the racketeer's mind works. Chapmans firm was drawing regulatory scrutiny as early as 2007 -- you mean a smart guy like Grayson, a professional investor and student of the criminal mind -- a guy who had been burned before -- was totally clueless? His gut didn't tell him a thing? Not a dickey-bird of a hint?
Whatever the answer, it begs more questions of a United States congressmanlisted as one of the 20 wealthiest members of Congress with assets of more than $20 million.
His ethics, his instincts, the scale of risk he employs in the decisions he makes -- all at issue, or should be.
Reach Nancy Smith at nsmith@sunshinestatenews.com or at 228-282-2423.
