John Paulson of Paulson & Co. may have lost billions of dollars for investors this year, but he’s still the personification of hedge fund excess to the Occupy Wall Street movement.
||Ann Valdez and Kflu Kflu at John Paulson's home|
On Tuesday afternoon, Ann Valdez and Kflu Kflu were ready to tell the world why. Representatives from New York City non-profit advocacy group Community Voices Heard, the middle-aged pair stood in front of Paulson’s $14 million-plus beige stone mansion at 9 East 86th Street in matching blue tee-shirts, press materials in hand. Protesters were coming to visit the townhouse as part of an Upper East Side "Millionaire's March and Billionaires Tour" to the homes of Paulson and such ultra wealthy financiers as David Koch and Rupert Murdoch to demand “accountability for Wall Street crimes” and higher taxes for the rich.
Media helicopters hovered above. Two bulky men in dark suits stood by to “monitor the situation” according to one who declined to say who he was working for. And Valdez, an out-of-work mother from Coney Island, had a page full of talking points ready on the hedge fund manager who made $4.9 billion last year. “He has 28,000 square feet! And we, the 99% of NYS, are giving him a tax cut!” read one. “He even helped Goldman Sachs form bonds HE KNEW were going to fail!” exclaimed another.
“Paulson is worth $15.5 billion on the backs of the poor,” said Valdez as the crowd approached from Park Avenue. “These millionaires and billionaires need to pay their fair share of taxes.”
The protestors eventually came. They took a brief detour to visit JPMorgan Chase chief executive Jamie Dimon’s home, but made it to Paulson's to chant and leave a big mock check for $5 billion. It was made out to “the top one percent” from the “99 percent” for a “Five billion dollar state tax cut,” a reference to a soon-to-expire New York State tax surcharge on those making $200,000 or more.
Neighbors had mixed feelings. Linda Heller, who lives next door to Paulson at 7 East 86th Street, said she supported the protest. Paulson having such an opulent residence, she said, was like “building the czar’s winter palace while the country goes to hell.”
Another, who asked not to be identified, said the protestors had no right to attack Paulson and hedge fund managers who often earn returns for institutional investors. “I have a pension—I want it to do well,” he said. “The protestors don’t know what they want.”
Paulson, almost certainly not at home, responded to the protestors with a statement: “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.”
The Queens-born hedge fund manager also noted that “The top 1% of New Yorkers pay over 40% of all income taxes, providing huge benefits to everyone in our city and state;” that “Paulson & Co. and its employees have paid hundreds of millions of dollars in New York City and New York State taxes in recent years and have created over 100 high paying jobs in New York City since its formation;” and “New York currently has the highest income taxes of any state in the country and thousands of businesses have fled New York to states with no income taxes such as Florida, Texas and Nevada, or moved offshore.”
Occupy Wall Street wasn’t paying attention. The march began around noon at 59th Street and Fifth Avenue, far uptown from the movement’s base in the financial district’s Zuccotti Park. Protestors held signs like “Tax the millionaires” and “Tax Wall Street transactions and heal America.” They chanted “We are the 99%” and “We got sold out, the banks got bailed out” as they began their march uptown, which was tightly but peacefully controlled by the New York City Police Department.
||Protesters gather at 59th Street and Fifth Avenue; one holds the check that would be delivered to John Paulson's home|
Between several hundred and one thousand marched, but the stunt attracted hoards of journalists and photographers. In certain areas, it seemed that there was one member of the media for every two or three protestors.
Organizers joining Occupy Wall Street included liberal advocacy groups UnitedNY, the Strong Economy for All Coalition, the Working Families Party and New York Communities for Change. Demands were two-fold. For Albany, they asked to “stop the $5 billion tax break for New York’s richest families and reinvest the money to create jobs, save schools and services, fight poverty and rebuild a stronger New York,” according to a flyer. For Washington, they called for the passage of President Obama’s jobs bill and “fair-share” tax laws, including the Buffett Rule. (Some hedge fund managers, like George Soros and Dinakar Singh, recently said they would be open to higher tax rates—see The tax bite looms—again from AR’s October issue.)
Some protestors didn’t know who John Paulson was or where he lived (“Whose place is this again?” said a man playing a drum to a fellow marcher, who shrugged). The motivations for some members of the crowd were unclear: One woman was topless; another sold American flags for a dollar.
But others were well informed. “Why do I pay more in taxes as a working New Yorker than a hedge fund manager?” said marcher James Mumm, director of organizing with National People’s Action, a national network of “community power” organizations, according to the group’s website. “All we’re demanding is fairness—we could open a few new schools if Paulson paid 35%.”
Mumm explained that a change to carried interest treatment, the Buffett rule, and various other tax measures would go a long way. Besides, he added, John Paulson and other hedge fund managers won’t be too hurt from a small tax increase.
“They can do with one less Rolex.”
A taxi passenger flashes her approval to the marchers on Park Avenue