Skip To Content
JEWISH. INDEPENDENT. NONPROFIT.
News

Seth Klarman Secretly Holds Puerto Rican Debt, Supported Charter Schools

This week an online investigative magazine revealed that Jewish mega-donor Seth Klarman owns nearly $1 billion in Puerto Rican debt, a fact he tried to hide by holding the asset in layers of shell companies. Klarman has also made some secretive political donations, using “dark money” groups to support charter schools and fight teachers’ unions.

Klarman, 60, founded The Baupost Group in 1982 and since has gained a reputation as one of the most successful investors in America. His personal fortune is estimated at $1.55 billion. He supports various philanthropic causes, such as Boston’s Combined Jewish Philanthropies, Birthright-Israel and media watchdog group CAMERA, through the Klarman Family Foundation, which he established with his wife Beth. In 2012 he entered the media business, co-founding the Times of Israel, an independent pro-Israel online publication, with centrist journalist David Horovitz as founding editor.

His firm hid its investments in Puerto Rico’s distressed debt, the Intercept showed.

“What’s incredible about this is these people were actually hiding,” an anti-hedge fund activist, Julio López Varona, told The Intercept. “Our work right now will be about activating our community in Boston, letting them know this person has been hiding and making sure we go to his houses and his companies to hold them accountable.”

Likewise, Klarman supports political groups that are legally allowed to conceal their backers — earning them the descriptor “dark money” — which means their funders can maintain their anonymity while shaping the public debate.

Klarman has a special interest in charter schools, which he sees as a solution to the public education system’s problems. Klarman grew up in the Pimlico neighborhood of Baltimore, a majority African-American area with a struggling school system. He attended a magnet school before attending Cornell University and Harvard Business School.

University of Massachusetts professor Maurice Cunningham, who keeps tabs on the role Klarman’s dark money plays in the state’s education debates, wrote on the website of local public TV station WGBH that Klarman was the largest donor to the pro-charter group Families for Excellent Schools, giving $3 million for its Massachusetts campaign. Cuningham knew this only because a Massachusetts regulator forced Families for Excellent Schools to disclose its donor list.

He also helped support the group’s efforts in New York state, according to a list of donors the Nation magazine published in 2015.

However, Klarman has been open about other donations. The 2016 election cycle saw donations of over $3.2 million from Klarman and his investment firm. Most donations supported the presidential runs of Republicans Jeb Bush, Chris Christie and Carly Fiorina. Notably, Klarman was one of few top GOP donors who persisted in their opposition to Donald Trump even after Trump won the nomination. Calling Trump “unqualified” to serve as president, Klarman made a point of writing a $100,000 check for a pro-Hillary Clinton PAC.

Trump’s qualifications were not the only issue on which Klarman has broken with the Republican Party. He has also sometimes supported Democratic members of Congress known for their pro-Israel positions, such as Cory Booker, Steve Israel, Brad Sherman and Eliot Engel. And he has provided financial backing to pro-gay marriage initiatives, describing Republicans who opposed equal marriage rights as “neanderthals.” Most of Klarman’s work on LGBT issues was done with fellow Republican Jewish billionaire Paul Singer.

Contact Nathan Guttman at [email protected] or on Twitter @nathanguttman

I hope you appreciated this article. Before you go, I’d like to ask you to please support the Forward’s award-winning, nonprofit journalism during this critical time.

Now more than ever, American Jews need independent news they can trust, with reporting driven by truth, not ideology. We serve you, not any ideological agenda.

At a time when other newsrooms are closing or cutting back, the Forward has removed its paywall and invested additional resources to report on the ground from Israel and around the U.S. on the impact of the war, rising antisemitism and the protests on college campuses.

Readers like you make it all possible. Support our work by becoming a Forward Member and connect with our journalism and your community.

Make a gift of any size and become a Forward member today. You’ll support our mission to tell the American Jewish story fully and fairly. 

— Rachel Fishman Feddersen, Publisher and CEO

Join our mission to tell the Jewish story fully and fairly.

Republish This Story

Please read before republishing

We’re happy to make this story available to republish for free, unless it originated with JTA, Haaretz or another publication (as indicated on the article) and as long as you follow our guidelines. You must credit the Forward, retain our pixel and preserve our canonical link in Google search.  See our full guidelines for more information, and this guide for detail about canonical URLs.

To republish, copy the HTML by clicking on the yellow button to the right; it includes our tracking pixel, all paragraph styles and hyperlinks, the author byline and credit to the Forward. It does not include images; to avoid copyright violations, you must add them manually, following our guidelines. Please email us at [email protected], subject line “republish,” with any questions or to let us know what stories you’re picking up.

We don't support Internet Explorer

Please use Chrome, Safari, Firefox, or Edge to view this site.