Paul Pelosi Jr’s Adventures in Pennyland

 

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In mid-January 2022, British tabloid the Daily Mail published a long story about U.S. House Speaker Nancy Pelosi’s son Paul Jr, in which it was alleged that he’d been involved in a number of shady businesses, some of them targets of Securities and Exchange Commission investigations and enforcement actions. The piece was subsequently picked up by the NY Post and several Republican political organs. We’ll take a look to see if there’s any fire to go along with all the smoke.

Paul Pelosi Jr is the only son of Nancy and Paul Pelosi; their other four children are daughters. (One of them, Alexandra, memorably said of her mother on CNN: “She’ll cut your head off and you won’t even know you’re bleeding.”) Like his siblings, Paul isn’t a kid; he’s 52 and has worked as an attorney and environmentalist since he was in his 20s. He graduated from Georgetown University and has been a member of the California Bar since 1996 and a California real estate broker since 2002. He’s been fairly low-profile in his business and personal life. His sisters Christine and Alexandra are better-known.

At LinkedIn, Paul lists Due Diligence, Corporate Finance, Start-ups, Corporate Development, Venture Capital, New Business Development, Investment Banking, and more as “skills” he possesses, and at which he presumably excels. Early in his career, he worked for Bank of America, but more recently, he’s been associated with smaller enterprises, some of them startups. As everyone who follows the OTC market knows, that choice can present its own dangers.

The Mail says that Paul “was involved in five companies probed by federal agencies—but has never been charged himself,” adding that “[a] shocking paper trail shows Paul Pelosi Jr.’s connections to a host of fraudsters, rule-breakers and convicted criminals.”

InfoUSA

In 2007, Paul had a full-time job working as a home loan officer at Countrywide Home Loans in San Mateo. He was nonetheless hired by data collection company InfoUSA as a senior vice president earning $180,000 annually, presumably in addition to his salary from Countrywide. InfoUSA was the creation of Vin Gupta, an Indian immigrant who’d become an enormous success in the ‘80s and ‘90s. Originally called American Business Information (ABI), by 1994, the company traded on the Nasdaq. In 1997, Gupta stepped down as CEO, saying he believed more experienced management was needed.

Nonetheless, he took over once again the next year and renamed the company InfoUSA. In 2008, the name was changed a third time to InfoGROUP. In 2010, Gupta sold the company for $680 million. By then, Gupta had acquired more than 45 companies to combine with InfoGROUP and had expanded operations worldwide.

But not all was sunny at the company. For years, Gupta had treated it as his own private property, arranging for very large amounts of money to be paid to him personally. On March 15, 2010, the SEC sued Gupta, a board member, and two company employees: Vasant H. Raval, former chairman of the audit committee, and Rajnish K. Das and Stormy L. Dean, each of whom had served as CFO of InfoGROUP at different times. How did the SEC become interested? Some shareholders became aware of Gupta’s “perks” and sued him in Chancery Court in Delaware, where InfoUSA/InfoGROUP was incorporated. The SEC learned of the action and opened its own investigation.

The SEC alleged that between 2003 and 2007, the company gave Gupta approximately $9.5 million in unauthorized and undisclosed perquisites. The cost was either billed directly to InfoGROUP or through Annapurna Corporation or Aspen Leasing Services, two entities controlled by him. According to the relative complaint:

Gupta’s expenses that were reimbursed by Info as business expenses included, among many others, costs related to private jet travel to Italy, the Virgin Islands, Cancun, Miami, and Las Vegas; travel and accommodations in South Africa; computers for his sons; 28 club memberships; over 20 automobiles; certain costs associated with a home in Aspen, Colorado and a winery in Napa Valley, California; and personal life insurance policy premiums.

Gupta agreed to pay disgorgement of $4,045,000, prejudgment interest of $1,145,400, and a penalty of $2,240,700 and consented to an order barring him from serving as an officer or director of a public company. Raval also settled with the SEC. At the time the complaints were filed, the case against Das and Dean was ongoing.

So then. What does all this have to do with Paul Pelosi, Jr? Nothing, really. Gupta’s been supportive of Democratic politicians for decades; he and Bill Clinton used to play golf together. He contributed to both Clintons’ political campaigns and hired Bill as a “consultant” once he’d left office. But the Mail cites an earlier investigation; one opened by Iowa Attorney General Tom Miller in 2005. It examined telemarketers who defrauded the vulnerable elderly. Two of the companies Miller considered of interest were InfoUSA and its subsidiary Walter Karl Inc. In 2007, running for the Democratic nomination for the presidency, Hillary Clinton was evidently aware of the investigation and made a point of warning older voters: “We’ve got to send out the alarm: Seniors should be extremely careful in buying anything that someone tries to sell you over the telephone.”

InfoUSA offered its own explanation:

“In response to the Iowa investigation, Walter Karl exited this business and the one sales representative involved in this area left the company,” the infoUSA statement reads. “While infoUSA can not manage what a client does with the publicly available information infoUSA provides, the company has a strict policy about not selling data to companies who act illegally.”

Ultimately, the company was not charged.

Again, all that has nothing to do with Paul Pelosi. He didn’t work for InfoUSA until after the investigation was closed. Probably Gupta admires Nancy Pelosi and was happy to have Paul come on board. But there’s no indication they were friends. According to the Mail, a Newsmax reporter asked Pelosi in 2007 whether Gupta had hired him to get access to his mother. Pelosi replied:

I don’t think that’s really what happens. I don’t see it that way, but I could see why you’d ask the question… I guess you always wonder why somebody hires you, right?

We wonder why he was talking to someone from Newsmax. And—flash forward—why did he spend New Year’s Eve 2018 at Mar-a-Lago, chatting with Ivanka Trump?

Done