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Ramaswamy’s Fyre Festival Campaign

Vivek Ramaswamy has built his entire campaign on the claim that he’s the honest outlier in a sea of political sharks, But a look at his past business dealings gives an entirely different picture, writes Pedro Gonzalez.

Vivek Ramaswamy wants to sell you a bridge. But it’s not just a structure intended to provide a more convenient commute. It’s much more than that. It is a megalithic talisman that conveys patriots over and above the sludge of wokeness, back in time to July 4, 1776, where the American Dream shall be discovered anew and ferried triumphantly into the future across that glorious red, white, and blue Bifrost, a marvel of excellence capitalism stretching from sea to shining sea.

Does that pitch sound like nonsense? It is. But that’s Ramaswamy’s modus operandi: selling gold-plated promises with titillating buzzwords and losing you in the jargon. It worked so well for him in business that he’s applying it to politics now. Like Donald Trump, he’s a talented marketer, and that’s the key to understanding Ramaswamy’s campaign. It’s a lot like Fyre Festival – a fake luxury music event conceived by con artist Billy McFarland and rapper Ja Rule.

Like Ramaswamy’s campaign, Fyre Festival was heavily promoted by influencers. Like Ramaswamy, McFarland believed in flooding social media with an endless stream of content. “The more footage, the better,” McFarland said in a Netflix documentary about the scam event.

Fyre was marketed as a cutting-edge affair with glamorous accommodations in the Bahamas. People – mainly millennials – paid thousands of dollars in advance based solely on the hype. But when they got to the island, they were greeted with FEMA disaster relief tents and no running water. Instead of opulent dinners they were served sad cheese sandwiches in Styrofoam boxes.

A lawsuit by the National Event Services against Fyre Media stated “that the accommodations were uninhabitable, including bug infestation, bloodstained mattresses, and no air conditioning.” When festival-goers tried to escape, they were locked for hours inside the Exuma Airport terminal without access to food or water. Fyre was a complete bust. In 2018, McFarland pleaded guilty to wire fraud for the scam and was sentenced to six years in prison.

Vanity Fair called McFarland “the poster boy for millennial scamming.” But I think there’s a new millennial on the scene who’s campaigning for that title.

Jeffrey Sonnenfeld, a management professor at Yale, where Ramaswamy studied, has debated him for years. Sonnenfeld likened him to an illusionist because everything about him is smoke and mirrors. Ramaswamy isn’t “grounded by facts and dignity,” Sonnenfeld wrote in Fortune. “Attention-seeking is core to the Ramaswamy playbook. He thrives on it – whether that attention is positive or negative.” In practical terms, that means Ramaswamy is very hard to beat in a debate because people who aren’t “grounded by facts and dignity” will say anything.

However, even a master of illusions is limited by reality.

It has been established that Ramaswamy made a fortune on a supposed wonder drug for Alzheimer’s that he promoted to high heaven. It turned out to be a dud – but a profitable one. “Axovant, which was 78% owned by Ramaswamy’s corporate holding company Roivant, blew up after failing FDA tests. with the stock crashing from $200 to 40 cents, fleecing thousands of mom-and-pop investors who bought into the hype,” writes Sonnenfeld, noting Ramaswamy walked away with a windfall thanks to the hype he sowed around the drug, which included promoting Axovant’s IPO on Mad Money with Jim Cramer. That should have been a red flag.

But it’s Ramaswamy’s other business, Strive Asset Management, that provides a snapshot of how things really work.

Strive presents itself as offering an alternative to the environmental, social, and corporate governance movement. Rather, Strive aims to “invest in excellence.” But two former employees recently filed lawsuits against Strive and Ramaswamy, along with his co-founder, Anson Frericks, who is also involved with Ramaswamy’s campaign.

Both Ramaswamy and Frericks are accused of aggressively pressuring employees to violate securities law. One of the plaintiffs, John Phillips, a former regional sales chief, said that “Ramaswamy misrepresented the company’s finances to employees and investors, exaggerating its growth when pitching venture capitalists and recruiting staff,” Bloomberg Businessweek reported.

Christopher Lenzo, a lawyer for plaintiff Joyce Rosely, said it appears Strive “was founded, in retrospect, largely as a PR mechanism for the presidential campaign of Ramaswamy.” It’s worth noting Sonnenfeld also wrote that, in the last two years, Ramaswamy “indicated a smoldering interest in running for president on the GOP ticket, according to emails I possess, by exploiting his anti-woke branding.”

Strive was founded in 2022. Ramaswamy stepped down as CEO in February to run for president, but Forbes reported he still owns at least 40 percent of Strive, worth an estimated $120 million.

Rosely claimed she was fired as co-head of institutional sales after raising the alarm about violations of securities laws, which she said Ramaswamy and Frericks pushed her to violate. “She says she was asked to use sales materials that improperly promised future returns and urged to allow employees who were not yet registered to sell securities to pitch clients,” Bloomberg Businessweek reported.

“Not a lot of thought was given to running it as an investment firm,” Lenzo said. Instead, the focus seemed to be more on appearances – on the illusion. A press release published in Business Wire is illustrative.

Strive claimed to have waged a successful pressure campaign against Exxon and Disney. It stated that it had met “with Exxon executives culminating in a meeting between Strive Executive Chairman Vivek Ramaswamy and Exxon CEO Darren Woods at Exxon’s headquarters,” suggesting that it alone had stormed the oil and gas giant’s corporate castle to land a fatal blow.

However, Exxon regularly meets with shareholders and their proxies.

“Every year, shareholders or their proxies may submit proposals regarding operations or governance,” the company said in a governance report a few days after Strive boasted about meeting with Exxon. “Company management and the Board consider each proposal and management seeks a dialogue with the proposal sponsor.” Exxon noted that in 2021 alone, it held approximately 145 sessions with shareholders and has more than doubled the number of such sessions since 2016.

Someone who didn’t know any better would assume that Strive had secured a rare audience with Exxon and scored a victory on its own. But that’s not really what happened. Ramaswamy just needs you to think that’s the case. He did the same thing with Disney.

“On October 25, Strive publicly identified Disney as one of its potential targets for the Spring 2023 proxy voting season,” the Strive press release said. Then Ramaswamy dramatically did the impossible, or so it seemed. “On November 20, Disney fired CEO Bob Chapek and appointed Bob Iger as its new CEO.”

“On November 22, Strive Executive Chairman Vivek Ramaswamy publicly praised this decision, noting that it was ‘time to restore excellence over politics at Disney’ and that “as shareholders, we’re happy with this outcome.’”

If you read carefully, you can see Ramaswamy’s political debate style in his business dealings. It doesn’t outright say his firm was responsible for Chapek’s firing. It dances around the edges, presenting the facts in such a way that points you to that conclusion – but it doesn’t overcommit, giving Ramaswamy room to wiggle free if you try to pin him down on it the time that he claimed he used Strive to get Bob Chapek fired. “I never said that,” he could say, and it would be both true and untrue. How much stock in Disney does Strive own anyway? As of January 31, 2023, less than $700,000, according to a semi-annual report. It is nowhere near the top.

Not that overcommitting to something wrong is a problem for Ramaswamy. See his interview with CNN’s Kaitlan Collins, who read an absurd quote about 9/11 back to him on air, and he simply told her she got it wrong. “I am telling you the quote is wrong, actually,” he said. It wasn’t. There was an audio recording.

But there’s another important element to the Strive story that punctures Ramaswamy’s façade of the self-made outsider who blazed his own way. A report by The Lever, an investigative news outlet, found “Ramaswamy blazing a more traditional path to power and wealth: using connections to help expand his fortune and facilitate his entry into the political world.”

The Lever discovered that Ramaswamy and Strive utilized connections with state officials affiliated with the State Financial Officers Foundation, a conservative nonprofit organization. The foundation was instrumental in legitimizing “Ramaswamy as an ‘anti-woke’ expert and provided Strive with behind-closed-door access to its most valued prospective clients: state pension funds,” Colette Rosenberg, a researcher with the watchdog group Documented, told The Lever. “Ramaswamy and Strive used that access to sell Strive to pension fund decision makers around the country.”

Some of this is unremarkable. People use professional and political networks to get ahead. What is unusual, however, is Ramaswamy insisting he is the only person who does not do it – for him to build his entire campaign against the very thing he has done and is doing.

I don’t blame people for believing the things Ramaswamy says. He’s got a silver tongue and he’s very good at getting you to believe that whatever he’s selling, it’s the best you could ever get. Just like the people who hyped Fyre Festival.