The Wall Street Journal - 30.07.2019

A6|Tuesday, July 30, 2019 **** THE WALL STREET JOURNAL.

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Others

Buttigieg

Warren

Sanders

Harris

Biden

June July

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10

20

30

40

Polling Averages

KamalaHarris’spollingaverageskyrocketedafterthe
firstroundofdebatesbuthasfallenoffslightlyrecently.

Real Clear Politics’ polling average for Democratic candidates

Note: Moving average of several major polls
Source: Real Clear Politics

DEMOCRATIC DEBATES

Split in two groups over
two nights, 20 Democratic
presidential candidates are
poised to debate in Detroit,
following several polls and re-
cent fundraising reports that
show the top five candidates
separating themselves from
the pack.
Former Vice President Joe
Biden, Massachusetts Sen.
Elizabeth Warren, Vermont
Sen. Bernie Sanders, California
Sen. Kamala Harris and South
Bend, Ind., Mayor Pete Butt-
igieg have consistently led in
national and early state sur-
veys. They also reported rais-
ing the most money—by far—
in the second quarter.
Those same five candidates
sat atop the polls heading into
the first pair of debates in Mi-
ami in June, though that
showdown did give Ms. Harris
a boost.
They will be joined in De-
troit by several other candi-
dates who are struggling to
gain traction and have only a
month left to meet the
tougher thresholds set by the
Democratic National Commit-
tee for the September debate.
Here are some key ques-
tions that could be answered
Tuesday and Wednesday
nights:

Will the “less polite” Biden
deliver?
Mr. Biden has promised he
will be “less polite” during
Wednesday’s debate. He will
be on stage with not just Ms.
Harris, who targeted him dur-
ing the first set of debates,
but also with New Jersey Sen.
Cory Booker, who has called
Mr. Biden an “architect of
mass incarceration” for his
role in the passage of the 1994
crime bill.
Mr. Biden, whose lead has
slipped in surveys, has indi-
cated he will return the fire
this time.
“If they want to argue
about the past, I can do that,”
he said at a recent fundraiser
in Detroit. “I got a past I’m
proud of. They got a past
that’s not quite so good.”
Both Ms. Harris and Mr.
Booker will be looking for mo-
ments to bring up Mr. Biden’s
record, especially on race.

Which flank of the party—lib-
eral or moderate—will make a
stronger argument?
The first night of the de-
bates will bring together the
two most prominent progres-
sive candidates—Mr. Sanders
and Ms. Warren—and a hand-
ful of centrists who are look-
ing to define themselves as
the pragmatic choice.
Mr. Buttigieg, former Texas
Rep. Beto O’Rourke, Minnesota
Sen. Amy Klobuchar, former
Colorado Gov. John Hicken-
looper, former Maryland Rep.
John Delaney, Montana Gov.
Steve Bullock and Ohio Rep.
Tim Ryan have all been critical
of at least some policies pro-
posed by Ms. Warren and Mr.
Sanders, such as Medicare for
All and student-debt cancella-
tion. Yet so far, none of them
have been able to break into

BYTARINIPARTI
ANDELIZACOLLINS

U.S. NEWS

the top tier.

Mr. Bullock, who wasn’t on

stage during the June debates,

will get his first opportunity

to offer an alternative to some

of his liberal opponents.

Mr. Sanders and Ms. War-

ren will be forced to defend

their policy platforms, includ-

ing their calls to abolish pri-

vate health insurance, but it

remains to be seen if they will

team up to do so, or try to dis-

tinguish themselves from one

another.

Will this be the last debate

spread over two nights?

The next debate gathering—

held in Houston in Septem-

ber—is unlikely to include as

many candidates, and so could

end up being just a one-night

event.

To qualify for this week’s

debates, candidates had to hit

a 1% threshold in at least three

preapproved polls or get dona-

tions from 65,000 people. In

September, those require-

ments will increase to a 2%

threshold in four qualifying

polls and 130,000 donors.

Ahead of Tuesday’s debates,

seven candidates had qualified

for the stage in September.

For many candidates who have

struggled to break out, this

week’s debates could be their

last chance to get the fund-

raising boost and polling

bump needed to stay in the

race.

Can the last debates’ breakout

candidates repeat a strong per-

formance?

Ms. Harris and former

Housing Secretary Julián Cas-

tro were the breakout candi-

dates during the June debates.

Their campaigns saw a surge

in fundraising and interest af-

ter they both targeted other

candidates on stage.

It helped Mr. Castro meet

the donor threshold for the

September debate, but he still

needs to meet the polling cri-

teria.

This time, he will be on the

stage the same night as Ms.

Harris, and they both will have

higher expectations and more

prepared opponents.

Ms. Harris has already se-

cured a spot for the Septem-

ber debate, but another strong

performance would help give

credibility to her campaign’s

message that she’s the most

qualified candidate to, in her

words, “prosecute the case

against President Trump.”

Will the younger candidates

clash?

Messrs. O’Rourke and Butt-

igieg—younger candidates

who have made an argument

centered on generational

change—have seen their for-

tunes diverge.

Mr. O’Rourke, who entered

the Democratic primary as a

political celebrity, has been

struggling in the polls. He has

lost some of his supporters

and donors to Mr. Buttigieg,

who started his campaign as a

small-city mayor with little

name recognition. Mr. Butt-

igieg has now been consis-

tently polling in the top five

and raised the most money in

the second quarter.

The two will be on stage to-

gether for the first time

Wednesday night, with Mr.

O’Rourke searching for a

standout moment and Mr.

Buttigieg trying to solidify his

support.

Candidates

Look to Break

From Pack

Debates could solidify

top tier of Democrats,

prompt others to drop

out of crowded race

The Education Department

is looking at such transfers

through its investigative arm,

its Inspector General Office,

said a person familiar with the

matter. The office has sug-

gested that the Education De-

partment add clarifying lan-

guage to the Federal Student

Aid handbook. The suggested

language, this person said, is:

“If a student enters into a le-

gal guardianship, but contin-

ues to receive medical and fi-

nancial support from their

parents, they do not meet the

definition of a legal guardian-

ship and are still considered a

dependent student.”

The Journal’s review of

more than 1,000 probate court

cases filed in 2018 in Lake

County, Ill., turned up 38 cases

in which a judge granted the

transfer of guardianship to a

teenager in his or her junior or

senior year of high school.

Most of the families live in

homes valued at around

$500,000. Several of those

homes were valued at more

than $1 million, according to

property sites including Zillow.

In court documents, a peti-

tioner is asked why he or she

should become a guardian.

Nearly all of the 38 cases use

some version of this language:

“The guardian can provide ed-

ucational and financial support

and opportunities to the minor

that her parents could not oth-

erwise provide.”

Mari Berlin is one of the at-

torneys at the Chicago firm of

Kabbe Law Group who has

represented about 25 families

who have transferred guard-

ianship for the purposes of se-

curing independent student

status, which can generate

more financial aid.

“The guardianship law was

written very broadly,” Ms. Ber-

lin said. “Judges were given an

immense amount of discretion.

The standard is, best interest

of the child, and I think it’s

hard to argue that this is not

in the student’s best interest.”

The University of Illinois

notified the Education Depart-

ment last year after a teenager

mentioned the strategy to her

high-school guidance coun-

selor in suburban Chicago. The

counselor notified the Univer-

sity of Illinois, where the stu-

dent had applied, Mr. Borst

said.

On her admissions applica-

tion, the student indicated she

lived with her parents in an af-

fluent Chicago suburb, but on

her financial-aid application

she said she was independent,

a university financial-aid offi-

cer discovered. That made the

student eligible for thousands

of dollars in need-based aid

from the federal government,

the state of Illinois and the

university, Mr. Borst said.

Admissions officers found

15 students whom they had ac-

cepted who had recently le-

gally transferred guardianship.

The school said it would likely

withhold institutionally funded

need-based aid “until we are

satisfied that students who

have transferred guardianship

don’t have other financial re-

sources available,” Mr. Borst

said.

Apart from the university

aid, the students each are re-

ceiving up to $11,785 in state

and federal aid, he said.

“They are gaming the sys-

tem, whether it is legal or not

doesn’t make it any less unsa-

vory,” said Justin Draeger,

chief executive and president

of the National Association of

Student Financial Aid Admin-

istrators.

A man who says he is a cli-

ent of Destination College said

his mother became the guard-

ian of two of his daughters, in-

cluding one who will attend

college this fall. His daughter

received need-based aid at

some schools but not at oth-

ers, he said.

The issue of gaming college

admissions entered the public

realm this year when William

“Rick” Singer, CEO of an ad-

missions consulting firm, was

charged for running a scam in

which he helped students

cheat on their college-entrance

exams and bribed college ath-

letic coaches to get students

into elite universities. Mr.

Singer has pleaded guilty to

four felonies and is cooperat-

ing with the case that includes

charges against 51 total, in-

cluding 34 parents.

Mr. Steyer had been a reli-

able Democratic donor since

the 1980s, according to a re-

view of Federal Election Com-

mission reports. He stepped up

his involvement as a fundraiser

during John Kerry’s 2004 pres-

idential campaign.

Though Mr. Kerry lost, the

experience sparked a growing

interest in politics in Mr.

Steyer, who colleagues said

seemed restless after nearly

two decades helming Farallon.

Inthe’90s,

Steyergave

lessthan

$40,

NextGendonations NeedtoImpeach Other

Thenhegave

threetimesthat

between

and

In2013,hegave$1.89million,

morethanhehadgiven

intotalupuntilthatpoint.

HealsostartedfundingNextGen,

agrouphefounded,givingit

$9.3millionthatyear.

Inthenext

5years,

hegave

$90,

1990-’99 2000-’04 ’05-’09 ’10 ’11 ’

2013

2014 2015

2016 2017 2018

$5.1million

toothercauses

$57.6million

toNextGen

$13.

million

$10.

million

$50.2million

In2016,hegave

$76.5million

toNextGen,while

reducingother

donationstoless

than$1million

DemocratTomSteyerincreasedhisgivingintheyearsbefore

runningforpresident.MostdonationsweretoNextGenClimate

ActionCommittee,whichworkstobuildyouthvoterturnoutand

backscandidateswhowanttoaddressclimatechange.

Federal campaign contributions reported

Source: Federal Election Commission

*Need to Impeach, which Tom Steyer founded, advocates impeaching President Trump

Note: Includes only contributions made for federal election purposes; some Need to Impeach

funding and state level giving aren’t reflected.

In2018,he

gavemore

than$12.

millionto

Needto

Impeach*

Advisers spent the next year

reviewing where Mr. Steyer

could have impact outside Far-

allon. They decided on found-

ing a community development

bank with his wife Kat Taylor, a

longtime liberal activist.

Around 2006, Mr. Steyer began

holding focus groups to evalu-

ate how he might be perceived

if he ever ran, one person fa-

miliar with the matter said.

Clients by then were asking

how long Mr. Steyer would re-

main involved at Farallon, said

people familiar with the firm.

The financial crisis put any

political aspirations on hold.

Farallon lost 36% in 2008 as

investments in real estate,

emerging markets like Turkey

and Russia, and other areas

soured. It was forced to set

aside and sell off about $6 bil-

lion in assets so it could return

cash to investors over time,

rather than immediately. Mr.

Steyer stayed on until Farallon

stabilized.

He wrote to clients in 2012

he planned to focus on giving

back and named as his succes-

sor Andrew Spokes, who had

headed the unit that financed

the coal projects. Mr. Steyer

averaged a strong 13.4% annual

return during his tenure, said

people familiar with Farallon.

People close to Mr. Steyer

said he had been increasingly

conflicted, wanting to invest in

a way that reflected his con-

cerns about climate change but

running a firm that invested ag-

nostically for clients. Mr. Steyer

had Farallon start a “green”

fund for his money that avoids

fossil-fuel investments.

His transition from donor

to full-fledged political bene-

factor had begun a few years

earlier, when San Francisco-

based Democratic operative

Chris Lehane asked him in

2007 to help kill a proposed

California ballot initiative to

apportion the state’s presi-

dential electors in a way that

would have benefited Republi-

can nominees.

Mr. Steyer spent $1 million

on that campaign, and two

years later $5 million to de-

feat a proposition that would

have overturned a California

law to reduce greenhouse-gas

emissions. He won those and

two later ballot-initiative bat-

tles, spending $50 million to-

tal.

Tom Steyer became a bil-

lionaire by managing a hedge

fund whose expansive portfolio

included investments in oil, gas

and coal companies. Then he

became one of the Democratic

Party’s most important donors,

pouring $350 million into

causes such as fighting climate

change.

Now, the 62-year-old who

built his fortune analyzing risk

and probability is mounting a

long-shot bid for president.

He plans to fund his White

House ambitions with $

million of his fortune, which

Forbes has estimated to be $1.

billion. The former Goldman

Sachs trader amassed his

wealth through Farallon Capi-

tal Management LLC, a hedge

fund he founded in 1986 and

ran for 27 years. That hasn’t

stopped him from decrying the

influence of big money in poli-

tics.

“I believe our democracy is

corrupted by corporate money,

and the only way to bring real

change is from the outside by

giving more power to the

American people,” Mr. Steyer

said in a statement. “That’s why

I’m running for President.”

Farallon started as a $9 mil-

lion risk arbitrage shop in San

Francisco, wagering on compa-

nies going through mergers

and takeovers. By 2007, it was

one of the biggest hedge funds

in the world, managing more

than $37 billion. Its portfolio

included billions in stocks and

debt, malls and housing devel-

opments in the U.S. and expo-

sure to other investment funds.

During Mr. Steyer’s tenure, it

also lent more than $1 billion

to coal-mining projects in Asia.

Those and other energy in-

vestments would bring nega-

tive media attention to Mr.

Steyer as he became a well-

known climate-change activist.

Several clients who are close

to Mr. Steyer said they didn’t

expect him to invest their

money according to his politics.

A former employee said Faral-

lon cast a wide net for profits

and “it would have to be pretty

exceptional in terms of its pejo-

rative impact for Farallon to

have avoided it.”

Farallon declined to com-

ment on that characterization.

BYJULIETCHUNG

ANDJULIEBYKOWICZ

Steyer Put Money Into Coal, Climate

Tom Steyer will fund his presidential run with his own fortune.

JOSH EDELSON/AGENCE FRANCE-PRESSE/GETTY IMAGES

about $600,000 putting sev-

eral older children through

college and have no equity in

their home, which is valued at

about $1.2 million, according

to the property website Zillow.

She said she has little cash on

hand and little saved for her

daughter’s education.

Transferring her daughter’s

guardianship was largely a

matter of paperwork, the

mother said. Her business

partner attended a court hear-

ing with an attorney. She, her

husband and her daughter

didn’t even need to show up,

she said. Once the guardian-

ship was transferred, the teen

only had to claim the $4,

in income she earned through

her summer job, the mother

said.

Today, her daughter attends

a private college on the West

Coast which costs $65,000 in

annual tuition, she said. The

daughter received a $27,

merit scholarship and an addi-

tional $20,000 in need-based

aid, including a federal Pell

grant, which she won’t have to

pay back. The daughter is re-

sponsible for $18,000 a year,

which her grandparents pay,

the woman said.

The woman and another

Chicago-area parent who

spoke to the Journal said they

followed the strategy laid out

by a college consultant com-

pany called Destination Col-

lege, based in Lincolnshire, Ill.

The company says on its web-

site it has saved families as

much $40,000 a year a stu-

dent. The website doesn’t

specify how.

The owner of the company,

Lora Georgieva, didn’t respond

to requests for comment.

Other people who said they

are clients of the firm and

spoke to the Journal said they

were asked to sign a confiden-

tiality agreement to not dis-

close her strategy of transfer-

ring guardianship.

Continued from Page One

Guardian

Ploy Gets

School Aid

The University of Illinois learned that some students obtained aid through the guardianship move.

JEFFREY GREENBERG/UNIVERSAL IMAGES GROUP VIA GETTY