Top Democratic congresswoman has up to $1 million in fund tied to Cayman Islands

Rep. Suzan DelBene, D-Wash., who is slated to assume a top House Democratic position in early 2023, invested up to $1 million in a multibillion-dollar fund tied to the Cayman Islands, a popular tax haven for wealthy investors and hedge funds.

DelBene invested between $500,001 and $1 million in Alkeon Growth Partners — a "feeder fund" for a Cayman Islands "master fund" managed by the U.S. hedge fund manager Alkeon Capital Management — on Dec. 29, 2020, according to her financial disclosures. The "master fund" is located in the Cayman Islands, one of the highest-profile tax havens in the world since it has no corporate tax rate.

According to 2022 filings with the Securities and Exchange Commission (SEC), Alkeon Capital Management uses a master-feeder structure, a tool commonly used to avoid paying U.S. taxes. Delaware-based Alkeon Growth Partners, the fund listed in DelBene's disclosures, is one of several feeder funds that push money from American investors to the Alkeon Growth Master Fund based in the Cayman Islands. 

The master fund is ultimately tasked with executing all investments and trading activity.

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"The feeder funds invest all of their assets in the master fund which, in turn, conducts all trading activity," Cayman Islands financial services firm Bell Rock stated in a blog post in May 2021. "Through their investments in the master fund, the feeder funds participate in the profits of the master fund on a pro-rata basis, in proportion to the amount invested in the master fund."

"The principal advantage of utilizing a master-feeder structure is that it allows U.S. taxable investors to invest in an offshore hedge fund in a tax efficient manner that does not compromise the tax position of other non-U.S. or U.S. tax-exempt investors," it continued.

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DelBene, meanwhile, currently serves as the vice chair of the House Ways and Means Committee, a powerful panel that oversees tax and revenue policy. During her tenure in the position, she has repeatedly criticized Republicans for backing policies she argues would raise taxes for on the middle class and cut taxes for corporations and wealthy Americans.

"Republicans have no plan to fight inflation & want to raise prices for middle-class families, while giving tax breaks to the wealthy," DelBene tweeted in November.

"Asking the wealthy to pay their fair share means more enforcement in the tax system & ending loopholes that only benefit the rich," she said in a tweet in May 2021.

DelBene also chairs the New Democrat Coalition, a pro-business caucus made up of centrist Democrats. The New Democrat Coalition favors simplifying the tax code to "give middle class families tax relief before the wealthy."

Overall, Alkeon Growth Partners has an estimated value of $4.5 billion, while the Alkeon Growth Master Fund is worth about $12.8 billion.

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Although DelBene's disclosure forms show she has invested up to $1 million in Alkeon Growth Partners, the fund's SEC filings state that the minimum investment commitment required of an investor is $10 million. 

Former Sen. Claire McCaskill, D-Mo., came under fire in 2018 after it was revealed that her husband invested $1 million in Matrix Capital Management, a hedge fund tied to the Cayman Islands. The revelation came years after McCaskill co-sponsored legislation targeting tax havens, The Associated Press reported at the time.

Meanwhile, Rep. Hakeem Jeffries, D-N.Y., the incoming House Democratic leader, selected DelBene last week to chair the Democratic Congressional Campaign Committee (DCCC) during the next Congress, which begins in January. In the role, DelBene will lead House Democrats' effort to win the majority in 2024.

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"Suzan is a battle-tested, former Frontline member who brings to the DCCC role a sharp political instinct, proven fundraising ability as well as serious management and operational experience inside and outside government," Jeffries said in a statement on Dec. 20.

"Democrats are dedicated to showing Americans that governance can work, advancing the policies that will make a difference to families, workers and communities, and pushing back against MAGA Republican extremism and chaos," DelBene added in a statement of her own.

However, DelBene is among the wealthiest members of Congress and had an estimated net worth of $79.4 million in 2018, according to watchdog group Open Secrets. She is also among the most prolific stock traders in the House, regularly buying and selling assets worth millions of dollars.

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DelBene received criticism last year after she reported her husband's sale of Microsoft stock worth up to $25 million six weeks after the transaction, a potential violation of a federal law that regulates lawmakers' trading activity, Business Insider reported. The Stop Trading on Congressional Knowledge Act of 2012 introduced a requirement that members of Congress disclose trades within 30 days.

Delbene's office did not respond to a request for comment.