A part­ner­ship that shaped pop­ulism

Mercers, Bannon col­lab­o­rated on sev­eral ven­tures

The Washington Post Sunday - - FRONT PAGE - BY MATEA GOLD

The cham­pagne was flow­ing as hedge fund ex­ec­u­tive Robert Mercer and his daugh­ter Re­bekah hosted a re­cep­tion dur­ing the Cannes Film Fes­ti­val last May to pro­mote “Clin­ton Cash,” a film by their po­lit­i­cal ad­viser Stephen K. Bannon and the pro­duc­tion com­pany they co­founded, Glit­ter­ing Steel.

The Mercers, Repub­li­can megadonors who had spent mil­lions on the failed pres­i­den­tial bid of Sen. Ted Cruz of Texas, and Bannon, then ex­ec­u­tive chair­man of Bre­it­bart News Net­work, were still weeks from for­mally align­ing with Don­ald Trump’s cam­paign. But the fes­tiv­i­ties that balmy even­ing aboard the Sea Owl, the Mercers’ lux­u­ri­ous yacht, marked the grow­ing in­flu­ence of their fi­nan­cial and

po­lit­i­cal part­ner­ship in shap­ing the 2016 cam­paign — and in en­cour­ag­ing the pop­ulist surge now re­ver­ber­at­ing around the world.

The Mercers’ ap­proach is far dif­fer­ent from that of other big donors. While bet­ter-known play­ers such as the Koch brothers on the right and Ge­orge Soros on the left fo­cus on mo­bi­liz­ing ac­tivists and vot­ers, the Mercers have ex­erted pres­sure on the po­lit­i­cal sys­tem by help­ing erect an al­ter­na­tive me­dia ecosys­tem, whose sto­ry­lines dom­i­nated the 2016 race.

Their al­liance with Bannon pro­vided fuel for the nar­ra­tive that drove Trump’s vic­tory: that dan­ger­ous im­mi­grants are ru­in­ing the coun­try and cor­rupt power bro­kers are sab­o­tag­ing Washington.

The wealthy New York fam­ily and the former in­vest­ment banker-turned-me­dia ex­ec­u­tive col­lab­o­rated on at least five ven­tures be­tween 2011 and 2016, ac­cord­ing to a Washington Post re­view of pub­lic fil­ings and mul­ti­ple peo­ple fa­mil­iar with their relationship. The ex­tent of their part­ner­ship has not pre­vi­ously been re­ported.

Through those projects, the Mercers and Bannon, now chief White House strate­gist, qui­etly built a power base aimed at sow­ing dis­trust of big gov­ern­ment and erod­ing the dom­i­nance of the ma­jor news me­dia.

The Mercers pro­vided the money, while Bannon, work­ing in tan­dem with Re­bekah, acted as busi­ness part­ner and po­lit­i­cal guide. The fam­ily’s over­ar­ch­ing strat­egy, ac­cord­ing to peo­ple fa­mil­iar with their giv­ing, is to test var­i­ous tac­tics to see which is most ef­fec­tive.

“The Mercers have a Sil­i­con Val­ley ap­proach to pol­i­tics: Let a thou­sand en­ti­ties bloom, and let’s see what works,” said one as­so­ciate, who, like oth­ers close to the Mercers, spoke on the con­di­tion of anonymity to dis­cuss the pri­vate fam­ily.

The Mercers poured money into Bre­it­bart News, the me­dia out­let they now partly own that un­der Bannon’s lead­er­ship gave voice to the na­tion­al­is­tic fer­vor Trump em­braced. The fam­ily helped fi­nance an in­ves­tiga­tive think tank that Bannon co-founded, the Gov­ern­ment Ac­count­abil­ity In­sti­tute, whose pres­i­dent wrote “Clin­ton Cash.” Glit­ter­ing Steel, the Mercer film pro­duc­tion com­pany, then brought the book’s find­ings to the screen, por­tray­ing Demo­cratic pres­i­den­tial can­di­date Hil­lary Clin­ton to a mass au­di­ence as a cap­tive of wealthy in­ter­ests.

The al­liance con­tin­ued with Cam­bridge An­a­lyt­ica, a data science com­pany that did work for the Trump cam­paign, with the Mercers as in­vestors and Bannon on the board. And they joined forces on a non­profit watch­dog group that is putting the spot­light on how pub­lic money is spent in the Mercers’ home state of New York.

While other donors gave more to sup­port Trump’s pres­i­den­tial bid last year, the Mercers are now ar­guably the most in­flu­en­tial fi­nanciers of the Trump era. Bannon, who went on to man­age the fi­nal months of Trump’s cam­paign be­fore join­ing the White House, is the se­nior ar­chi­tect of the pres­i­dent’s pol­icy vi­sion. He is joined in the West Wing by coun­selor Kellyanne Conway, a friend of Re­bekah Mercer who led the fam­ily-funded su­per PAC that backed first Cruz and then Trump in the 2016 race.

Peo­ple who know them say the Mercers, who soured on tra­di­tional po­lit­i­cal op­er­a­tives, ap­pre­ci­ated Bannon’s busi­ness savvy and share his be­lief that the con­ver­sa­tion around pol­i­tics must be changed for their ideas to pre­vail. For all of their power and priv­i­lege, both the fam­ily and their long­time ad­viser see them­selves as out­siders, fight­ing the grip of elite in­sti­tu­tions.

Driv­ing the Mercers is a be­lief “that there is too cozy a relationship be­tween the es­tab­lished me­dia and the po­lit­i­cal class, and that there needs to be more ac­count­abil­ity,” said Peter Sch­weizer, pres­i­dent of the Gov­ern­ment Ac­count­abil­ity In­sti­tute and au­thor of “Clin­ton Cash.” “They loathe the fact that Washington has be­come a very wealthy town be­cause of gov­ern­ment power, at the ex­pense of the Amer­i­can peo­ple.”

The Mercers de­clined to com­ment. Bannon de­clined to com­ment through a White House spokes­woman.

Trump him­self paid homage to the fam­ily in De­cem­ber, weeks be­fore mov­ing into the White House, when he at­tended the Mercers’ elab­o­rate an­nual cos­tume party at their Long Is­land man­sion. In a nod to the “Vil­lains and Heroes” theme, Re­bekah Mercer dressed like the Black Wi­dow and her father as Man­drake the Ma­gi­cian, a comic-book su­per­hero known for hyp­no­tiz­ing his tar­gets.

Trump — who did not wear a cos­tume — told the crowd that when the fa­mously tac­i­turn Robert Mercer urged him to hire Bannon and Conway last Au­gust, he knew he should lis­ten be­cause Mercer so rarely speaks, ac­cord­ing to peo­ple in at­ten­dance.

A decade ago, few could have pre­dicted the Mercers’ swift as­cent in the money world. In the 2006 midterms, the fam­ily con­trib­uted only $37,800 to fed­eral can­di­dates and po­lit­i­cal com­mit­tees — in­clud­ing $4,200 that Robert Mercer’s wife, Diana, gave to Clin­ton’s Se­nate re­elec­tion cam­paign, fed­eral records show. The fam­ily’s foun­da­tion was sim­i­larly low key, giv­ing away $292,000 in 2007, with nearly half go­ing to a non­profit math foun­da­tion started by one of Robert Mercer’s hedge fund col­leagues, tax doc­u­ments show. But, af­ter the elec­tion of Barack Obama, the fam­ily started to in­crease its po­lit­i­cal giv­ing, tap­ping into new­found wealth.

In 2010, Robert Mercer was el­e­vated to co-chief ex­ec­u­tive of the hedge fund Re­nais­sance Tech­nolo­gies, whose closely held quan­ti­ta­tive for­mu­las have gen­er­ated stag­ger­ing re­turns. The fol­low­ing year, he be­gan draw­ing an­nual earn­ings of $100 mil­lion and up, ac­cord­ing to In­sti­tu­tional In­vestor’s Al­pha list.

Mean­while, the Supreme Court’s Cit­i­zens United de­ci­sion in 2010 paved the way for new forms of un­lim­ited po­lit­i­cal spend­ing — an open­ing seized upon by megadonors on the right op­posed to the Obama ad­min­is­tra­tion.

Be­tween 2008 and 2016, they pumped at least $77 mil­lion in po­lit­i­cal do­na­tions and gifts from their fam­ily foun­da­tion into a vast uni­verse of causes across the con­ser­va­tive land­scape, ac­cord­ing to cam­paign fi­nance re­ports and tax fil­ings. Their foun­da­tion fi­nanced groups fo­cused on in­ter­na­tional af­fairs, re­li­gious free­dom, state poli­cies, ju­di­cial is­sues and free en­ter­prise. They poured mil­lions into the Koch net­work and su­per PACs that pro­moted Repub­li­can can­di­dates across the coun­try.

Much of the Mercers’ po­lit­i­cal spend­ing came in 2016 alone, when they funded a fam­ily su­per PAC with $15.5 mil­lion, in­clud­ing $2 mil­lion to sup­port Trump once he se­cured the GOP nom­i­na­tion, ac­cord­ing to Fed­eral Elec­tion Com­mis­sion fil­ings.

The Mercers’ ide­ol­ogy re­sem­bles that of many con­ser­va­tive donors and opin­ion lead­ers. They be­lieve in lim­ited gov­ern­ment and free mar­kets, ac­cord­ing to peo­ple who know them. They both have a staunch an­tipa­thy to the Clin­tons. Re­bekah Mercer, who home­schools her four chil­dren, is strongly an­tiabor­tion, as­so­ciates said.

But what sets the Mercers apart is their in­ter­est in find­ing new ways to shape the en­vi­ron­ment in which pol­icy is­sues are de­bated, an im­pulse driven by their back­ground in tech­nol­ogy and fi­nance.

Robert Mercer is a renowned com­puter pro­gram­mer who helped pi­o­neer the field of ma­chine trans­la­tion. He made his for­tune af­ter leav­ing IBM for the hedge fund Re­nais­sance Tech­nolo­gies in the early 1990s. He bought an es­tate with a har­bor view on Long Is­land and a 203-foot yacht, which in­cludes flour­ishes such as a four-deck-high tree carved from Peru­vian ma­hogany and a rose­wood self-playing Stein­way baby grand pi­ano.

Re­bekah Mercer, 43, a former Wall Street trader, lives with her fam­ily in a sprawl­ing triplex in a Trump-branded con­do­minium on Man­hat­tan’s Up­per West Side and sits on the boards of the Amer­i­can Mu­seum of Nat­u­ral His­tory and the Her­itage Foun­da­tion. She and her two sis­ters also run an on­line gourmet cookie com­pany.

She is the most po­lit­i­cal of Mercer’s three daugh­ters, largely di­rect­ing where the fam­ily puts its re­sources, and is known in con­ser­va­tive cir­cles for her un­yield­ing and skep­ti­cal ques­tion­ing of can­di­dates and es­tab­lished po­lit­i­cal op­er­a­tives.

“They are right-wing nerds,” said Ge­orge Gilder, an economist and former Ron­ald Rea­gan ad­viser who met Robert Mercer when the hedge fund ex­ec­u­tive be­gan at­tend­ing speeches Gilder has given tout­ing bit­coin and a re­turn to the gold stan­dard.

“[Robert Mercer] be­lieves in free mar­kets, and he be­lieves that tech­nol­ogy is a pos­i­tive force and that a lot of gov­ern­ment is over­reg­u­lat­ing and sup­press­ing eco­nomic cre­ativ­ity,” Gilder added.

One of the big­gest ben­e­fi­cia­ries of the Mercers’ do­na­tions over the past eight years has been the con­ser­va­tive watch­dog Me­dia Re­search Cen­ter, which col­lected $13.5 mil­lion from the Mercer Fam­ily Foun­da­tion be­tween 2008 and 2014, tax records show.

The cen­ter’s projects in­clude a web­site called CNSNews.com that pub­lishes sto­ries it says are ig­nored by the main­stream me­dia — an early pre­cur­sor to Bre­it­bart News.

L. Brent Bozell III, founder of the Me­dia Re­search Cen­ter, did not re­turn re­quests for com­ment. But in an in­ter­view with The Post last year, he called the fam­ily “vi­sion­ar­ies” when it comes to rec­og­niz­ing new ways to com­mu­ni­cate with the pub­lic.

“What they are look­ing to do is build a move­ment, not just fund a move­ment,” Bozell said. “I don’t know where it is all lead­ing, but I can tell you they are in it for the long haul.”

The Mercers’ part­ner­ship with Bannon be­gan in 2011, thanks to an en­counter that Robert and Re­bekah had with An­drew Bre­it­bart.

Dur­ing a spring meet­ing of Club for Growth donors at the Ritz-Carl­ton in Palm Beach, Fla., the Mercers sought out Bre­it­bart af­ter watch­ing him de­liver a talk about how to co-opt the po­lit­i­cal strate­gies used by lib­er­als.

The con­ser­va­tive me­dia en­tre­pre­neur, who liked to de­nounce the main­stream press as the Democrats’ “dom­i­nant part­ner in crime,” was ar­gu­ing at the time that gov­ern­ment poli­cies could not be changed un­til con­ser­va­tives seized con­trol of the me­dia nar­ra­tive. The mes­sage res­onated with the Mercers, ac­cord­ing to a per­son fa­mil­iar with their views.

Bre­it­bart in­tro­duced them to Bannon, then a screen­writer and pro­ducer in South­ern Cal­i­for­nia who was di­rect­ing a movie called “Oc­cupy Un­masked” that fea­tured Bre­it­bart. It was co-pro­duced by the con­ser­va­tive ad­vo­cacy group Cit­i­zens United, whose al­lied foun­da­tion would later re­ceive Mercer funds.

Bannon, whose peri­patetic ca­reer had taken him from Wall Street to Hol­ly­wood, was at the time in­creas­ing his po­lit­i­cal fo­cus, di­rect­ing and pro­duc­ing a slate of con­ser­va­tive doc­u­men­taries.

He had grown close to Bre­it­bart and was urg­ing the writer to ex­pand his web­site, which orig­i­nally op­er­ated out of Bre­it­bart’s base­ment. As part of that ef­fort, the Mercers in­vested $10 mil­lion in the en­ter­prise in the sum­mer of 2011, ac­cord­ing to a per­son fa­mil­iar with the trans­ac­tion. When Bre­it­bart died of a heart at­tack the fol­low­ing March, Bannon be­came ex­ec­u­tive chair­man of the news out­let. The Mercers’ co-own­er­ship of Bre­it­bart News, along with chief ex­ec­u­tive Larry Solov and Bre­it­bart’s wi­dow, Su­san­nah, was con­firmed by the com­pany last month.

The site was an early cham­pion of Trump and the anti-es­tab­lish­ment, pop­ulist move­ment that buoyed his cam­paign. It has also fielded in­tense crit­i­cism for air­ing in­flam­ma­tory sto­ries about im­mi­grants, refugees and rad­i­cal Is­lamists. Bannon once touted it as a “plat­form” for the alt-right, a small, far-right move­ment that seeks a whites-only state and whose ad­her­ents have es­poused racist, anti-Semitic and sex­ist points of view.

Bre­it­bart of­fi­cials have dis­puted charges that their con­tent pro-

motes racism or Is­lam­o­pho­bia. Solov did not re­spond to re­quests for com­ment.

Ac­cord­ing to a per­son fa­mil­iar with her views, Re­bekah Mercer has taken pride in the fact that Bre­it­bart’s sto­ries have af­fected the po­lit­i­cal de­bate by fil­ter­ing into the main­stream me­dia — an im­pact that has been af­firmed by some in­de­pen­dent re­searchers.

“They view Bre­it­bart as a busi­ness and as a brand that gets a lot of traf­fic that is steer­ing and shift­ing the way other out­lets are cov­er­ing th­ese is­sues,” the per­son said.

While he was run­ning Bre­it­bart News, Bannon was also serv­ing as the fam­ily’s po­lit­i­cal ad­viser, as­sess­ing the im­pact of think tanks, pol­icy groups and su­per PACS they were con­sid­er­ing fi­nanc­ing, ac­cord­ing to mul­ti­ple peo­ple fa­mil­iar with his role.

For Bannon, the part­ner­ship with the Mercers proved prof­itable.

In 2013, he re­ported earn­ing $750,000 a year as chair­man of Bre­it­bart News, ac­cord­ing to a rental ap­pli­ca­tion pre­vi­ously re­ported by The Post. He also re­ceived about $100,000 in salary that year as part-time chair­man of the Gov­ern­ment Ac­count­abil­ity In­sti­tute, ac­cord­ing to fil­ings with the In­ter­nal Rev­enue Ser­vice, first re­ported by The Post.

A strate­gic turn­ing point came in 2012. The Mercers put $3 mil­lion be­hind su­per PACs that backed GOP pres­i­den­tial nom­i­nee Mitt Rom­ney, fil­ings show, and when he lost, they be­came dis­en­chanted with the Washington po­lit­i­cal class, ac­cord­ing to mul­ti­ple peo­ple fa­mil­iar with their think­ing.

Bannon urged them to take a dif­fer­ent ap­proach: In­stead of help­ing con­sul­tants get rich, they should cre­ate their own net­work, ac­cord­ing to as­so­ciates.

In 2013, the Mercers be­came the prin­ci­pal in­vestors in the data science firm Cam­bridge An­a­lyt­ica, which says it can tar­get vot­ers based on their per­son­al­ity types. It was spun out of a British com­pany that ad­vises gov­ern­ments around the world on how to con­duct ef­fec­tive psy­cho­log­i­cal oper­a­tions.

Bannon served as vice pres­i­dent and sec­re­tary of Cam­bridge’s board, cor­po­rate fil­ings in Delaware show, and was in­stru­men­tal in push­ing its ex­pan­sion into the U.S. mar­ket, ac­cord­ing to peo­ple fa­mil­iar with his role.

Other Mercer-Bannon projects had nar­rower aims. To­gether, Re­bekah Mercer, her sis­ter Jen­nifer and Bannon started a watch­dog group in 2013 called Re­claim New York, which is us­ing the state’s free­dom-of-in­for­ma­tion law to try to dis­close ev­ery lo­cal pub­lic ex­pen­di­ture.

One of the fam­ily’s most ef­fec­tive plays was help­ing fi­nance the or­ga­ni­za­tions that pro­duced “Clin­ton Cash.”

The Mercer foun­da­tion gave $2 mil­lion be­tween 2013 and 2014 to the Gov­ern­ment Ac­count­abil­ity In­sti­tute, the Tallahassee-based in­ves­tiga­tive think tank founded by Bannon and Sch­weizer.

Sch­weizer be­gan writ­ing “Clin­ton Cash” in late 2013, us­ing the in­sti­tute’s re­search about Clin­ton Foun­da­tion donors, much of the ma­te­rial plumbed from ob­scure for­eign web­sites. The book was re­lease in 2015, just as the pres­i­den­tial race was heat­ing up.

That same year, the Mercers set up a pro­duc­tion com­pany called Glit­ter­ing Steel, which Bannon co­founded, ac­cord­ing to peo­ple fa­mil­iar with his role.

At the Cannes screen­ing of the “Clin­ton Cash” doc­u­men­tary, which kicks off with the im­age of a blood-stained $100 bill, Bannon told re­porters that he en­vi­sioned the tar­get au­di­ence to be lib­er­als who might grow dis­en­chanted with Clin­ton.

“I want as many pro­gres­sives to see this as pos­si­ble, be­cause I think you have to un­der­stand how the Clin­tons, who pro­claim that they sup­port all your val­ues, es­sen­tially have sold you out for money,” Bannon told Reuters.

The 2016 race of­fered an op­por­tu­nity for the Mercers to de­ploy the net­work of groups they built with Bannon.

Bre­it­bart News, whose cov­er­age echoed Trump’s dark warn­ings about il­le­gal im­mi­grants and rad­i­cal Is­lam, helped shape the cam­paign cli­mate. A new study by a team of Har­vard and MIT re­searchers, funded by a Soros­backed foun­da­tion, found that Bre­it­bart drove cov­er­age of the elec­tion in the con­ser­va­tive me­dia and in­flu­enced main­stream news or­ga­ni­za­tions.

Glit­ter­ing Steel pro­duced videos for the Mercer-funded su­per PAC Make Amer­ica Num­ber 1, which paid the pro­duc­tion com­pany about $700,000, ac­cord­ing to cam­paign fi­nance fil­ings.

The su­per PAC di­rected an­other $5.5 mil­lion to Cam­bridge An­a­lyt­ica for con­sult­ing, data and ads. Cam­bridge was also paid at least $6 mil­lion for the work it did help­ing the Trump cam­paign iden­tify and tar­get vot­ers, fi­nance fil­ings show. Since the elec­tion, its par­ent com­pany, SCL Group, has stepped up its pur­suit of U.S. gov­ern­ment con­tracts.

Bannon’s as­cen­sion last Au­gust as Trump’s chief ad­viser forced him to walk away from the Mercer op­er­a­tion. He stepped down from the Gov­ern­ment Ac­count­abil­ity In­sti­tute last sum­mer when he joined the cam­paign and for­mally re­signed his post at Bre­it­bart af­ter the elec­tion, ac­cord­ing to in­for­ma­tion Solov gave a panel of con­gres­sional jour­nal­ists last month.

In his ab­sence, the Mercers are forg­ing ahead. Re­bekah Mercer is spear­head­ing a new group called Mak­ing Amer­ica Great to sup­port Trump’s agenda, ac­cord­ing to peo­ple fa­mil­iar with the plans and cor­po­rate doc­u­ments filed in Vir­ginia. It re­mains un­clear what relationship that group will have with an en­tity called Amer­ica First Poli­cies that has already been launched by other former Trump ad­vis­ers.

The Mercers are look­ing to pro­duce more film projects through Glit­ter­ing Steel, as well as graphic nov­els. The graphic novel based on “Clin­ton Cash” was a New York Times best­seller.

And down in Tallahassee, one of their ma­jor causes, the Gov­ern­ment Ac­count­abil­ity In­sti­tute, is press­ing for­ward with in­ves­tiga­tive projects.

Over­see­ing the ef­fort as the group’s new chair­woman and Bannon’s suc­ces­sor: Re­bekah Mercer.

Re­bekah Mercer and her father, Robert Mercer, cen­ter, have aligned them­selves with Trump strate­gist Stephen K. Bannon.

SYL­VAIN GABOURY/PA­TRICK MCMUL­LAN VIA GETTY IM­AGE

LEFT: Stephen K. Bannon, chief strate­gist for Don­ald Trump, ar­rives for the pres­i­dent-elect’s in­au­gu­ra­tion on Jan. 20 at the U.S. Capi­tol. RIGHT: Re­bekah Mercer, left, shown with her par­ents Robert and Diana Mercer, at­tend the World Science Fes­ti­val Gala at the Jazz at Lin­coln Cen­ter in New York in 2014. The Mercer fam­ily and Bannon col­lab­o­rated on at least five ven­tures be­tween 2011 and 2016.

WIN MCNAMEE/GETTY IM­AGES

EVAN VUCCI/AS­SO­CI­ATED PRESS

Don­ald Trump ar­rives for a party at Robert Mercer’s home in Head of the Har­bor, N.Y., in De­cem­ber.

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