Omega Advisors Chairman Lee Cooperman Responds to Elizabeth Warren

CNBC Transcript: Omega Advisors CEO and Chairman Lee Cooperman Speaks with CNBC’s Scott Wapner on CNBC’s “Fast Money Halftime Report” Today

CEO and Chairman Lee Cooperman

Image source: CNBC Video Screenshot

WHEN: Today, Thursday, November 14, 2019

WHERE: CNBC’s “Fast Money Halftime Report

The following is the unofficial transcript of a CNBC interview with Omega Advisors CEO and Chairman Lee Cooperman and CNBC’s Scott Wapner on CNBC’s “Fast Money Halftime Report” (M-F 12PM – 1PM) today, Thursday, November 14th. The following is a link to video from the interview on CNBC.com:

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Watch billionaire Omega Advisors Chairman Lee Cooperman’s full response to Elizabeth Warren’s CNBC campaign ad

 

SCOTT WAPNER: Mr. Cooperman joining us live by phone. Lee, are you there?

LEON COOPERMAN: Yeah, I am. Thank you.

SCOTT WAPNER: You’ve seen the ad. You wanted to respond to it. Now is your chance.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: Well, I don’t know if I should respond. Because I’m just giving here more credibility by speaking out. But anyway, that’s my nature. Let me first thank you for the opportunity to set the record straight, even though, frankly, you’re indirectly responsible of my emergence on the political scene. As you know, at the recent Delivering Alpha conference you asked me what effect a Warren victory in November of next year would have on the market and I responded down 25%. I notice that Paul Tudor Jones had a similar view, Steven Cohen had a similar view. They’re much more astute traders than me. Okay.

I’m told by many that I’m too optimistic. And what followed tells me that Senator Warren is a politician in the worst sense of the word. And let me explain. The next day she responded with one of her pithy Tweets, and I quote, Leon, you were able to succeed because of the opportunity this country gave you. Now, why don’t you pitch in a bit more so everyone else has a chance at the American dream, too?

Okay. That shows to me, demonstrates to me that she knows as much about me as she knows about the wealth tax. I agree I’ve lived the American dream, okay? And my family and I and grandchildren included are all about helping out. When I took the Giving Pledge, the Buffett Gates Giving Pledge nine years ago, I told Warren Buffett it was the plan with the agreement of my family to give away all of my money at death.

Along the way, we’ve created the Cooperman College Scholarship in Newark, New Jersey where we established a fund to pay college tuition for 500 worthy kids in Newark. We’ve made similar large gifts to established programs at Hunter College and the City University of New York. Right. And the Columbia Graduate School of Business. Two institutions from which I hold a degree. Those three programs alone exceed $100 million support. I consider myself extremely lucky to be able to do this. And I’m a philanthropist with a small. When I think about other wealthy people like Bernie Marcus, Ken Langone, Mike Bloomberg, Jeff Bezos, you know, on and on and on, you know --

SCOTT WAPNER: Let me say this. So, let me just maybe just counter with what someone on the other side or in agreement with the Senator may say. That this overall issue, Lee, is not so much about your generosity. Everybody agrees --

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: I agree.

SCOTT WAPNER: Everybody agrees that you’re a generous man. You’ve done a lot about the wealth and the success that you’ve had.

LEON COOPERMAN: It’s not about me. Forget about me.

SCOTT WAPNER: I’ll say – I’m just saying, in general, this is not about those who are philanthropic. It’s about a system that has enabled people of your level of wealth to get that wealthy in and of itself, when those at the -- either at the middle or at the bottom can’t seem to grow their own wealth in any substantial way. And that those at the top are growing theirs exponentially larger than those at the bottom are. Their wages are stagnant. Their ability to –

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: Is that the result of wealthy people? Or is that the result of problems in the system? Is it a result of a poor educational system? What are the causes? I don’t know. You’re raising issues that are beyond my scope. All I know, in any society, okay, unless you hit the lottery or unless you inherit a lot of money, the only way you became a billionaire is by providing a product or service that the world found valuable. And so, do we want to penalize success? Is the world a better place because of Bill Gates, because of Jeff Bezos, because of Michael Bloomberg, because of Bernie Marcus, because of Ken Langone?

I say unequivocally, yes. So, you know, I’m not saying we don’t have problems. Okay. But what I’ve said repeatedly is that I’m prepared to work for the government six months of the year of every year and work six months for myself. That’s a 50% tax rate. I believe in my heart in the progressive income tax structure and that the richer people should pay more. Raise the tax rate and get rid of the loopholes, get rid of carried interest. I said that on your program seven years ago, actually it was on "Squawk Box,” to get rid of Section 10.31 of the IRS code that allows these real estate guys to indefinitely roll forward capital gains tax liability.

You know, do something with the overall tax rate. Wealth tax makes no sense. It would bring unnatural actions, be near impossible to police and is probably unconstitutional. Think about it in the real world. You’re a farmer. You’re a manufacturer. Okay. You have your own business. All of your wealth is tied up in your business. Are you going to hide off 2% of your business, your farm, every year to pay the wealth tax? It doesn’t make any sense.

I think the main beneficiary of this will be gold. Gold because people will hide their wealth by doing unnatural things. I determined – now let me just go on because I really want to set the record straight. I determined it would be helpful to explain my issues with her advocacy, and I wrote her a five-page letter that has received near universal acclaim. An old professor of mine said it was an a-plus letter. Her response, nothing about the letter.

Prior to that I owned stock in Navient, a student loan company which she is constantly bashing without any proven documentation to the claims. She probably would be upset to hear I have a profit on the investment, despite her constant unfair jabs to the company. My letter was respectful and hopeful that we could work together to deal with the many serious problems our nation faces: income disparity, student loan debts, health care coverage, crumbling infrastructure, et cetera. Let me read for your viewers, your audience, my concluding paragraph of my letter:

I am a registered independent who vote the issues and the person, not  party. The fact is, Senator Warren, despite our differences we should be working together to find common ground in this vital conversation. Not firing off snarky tweets that stir your base at the expense of accuracy. Let’s elevate the dialogue and find ways to keep this a land of opportunity where hard work, talent and luck are rewarded and everyone gets a fair shot at realizing the American dream. Okay. Hardly combative, very conciliatory. What was the response? Basically, the Navient response. Okay.

SCOTT WAPNER: You know, this is stirring her base. You, I know, as you referenced at the top, have been urged by some of your friends, very prominent people, I’m not going to mention any names, to not engage in this back and forth.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: Yeah, absolutely. I get emails on both sides.

SCOTT WAPNER: I know.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: I have emails – no, no, look, it’s my nature. I got an email from somebody I respect and it says do not let her get away with what she said about this inside trading crap, okay. You know, her response raises some old inside trading allegations I want to address, by the way, which was settled some time ago with no admission of guilt and played a videotape that I got emotional on one of your recent programs because I was so upset about the destructive dialogue she was pursuing. Nothing to do with paying more in taxes. As regards to the SEC, I’m limited to what I can say. But let me tell you what my attorney said, okay, I entered into what is called a No Admit and No Deny agreement.

That means I can’t say I’m innocent, they can’t say I’m guilty. My attorney said to me, and this is – I’m quoting my attorney now, not me -- my attorney said, congratulations, you won. Anytime the SEC goes along with a No Admit and No Deny agreement with no time-out, the defendant won. Personally, I didn’t feel I won anything. My attorney encouraged me to accept the agreement because if I didn’t it would tie me up for about two years and cost 20 million in legal fees. This compares to the settlement cost of under 5 million.

Believe me, if America had a judicial system like the UK where the losing party pays, I would never have settled. If Senator Warren wants to do something constructive, tackle the legal system and the SEC. Her vilification of the wealthy is totally uncalled for, and her wealth tax idea is totally misguided. Read the letter. She criticized the wealthy because she understands there are more poor people than wealthy people.

So, she appeals to very base instincts. That is not the America or the leader of America that I want. Okay. 25 years ago, I was honored by a charity. And the guest speaker was Jack Kemp. And at that dinner, he said the America I grew up in, people don’t hate the wealthy. They wanted to be them, okay. Her idea to come under heavy criticism, forget me, heavy criticism that’s been totally unrealistic. “The Wall Street Journal" ran an editorial page comment, Warren has a Fantasy Plan. That’s regarding healthcare.

Steven Rattner, a Democrat, recently in "The New York Times": the Warren way is the wrong way. Lawrence Summers, a Democrat with outstanding credentials, he’s forgotten more about the economy than I know, and I quote him: her numbers don’t add up or make sense. These comments remind of the comment made by Will Rogers, the famous satirist and political commentator. If we got one-tenth of what was promised to us in the State of the Union speeches there wouldn’t be any inducement to go to heaven. Because she is peddling a story that makes no sense whatsoever.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: "The New York Times" today, the Wharton School of the University of Pennsylvania have both come out that their analysis show that a wealth tax would cut growth by about an average of two-tenths of 0.1%. So, there certainly are those who believe it’s not a good idea, that it would hurt the economy. You have people on your side who agree with you –

LEON COOPERMAN: -- you who’s on my side, and who is against me. What I’m worried about is what’s equity. The people that accumulate this wealth, they pay their taxes along the way. I think currently the federal income tax rate is 37%. The tax on investment and dividends interest income is 3.6% on Obamacare. Then you have another Medicare tax, I think 90 basis points. Then you have FICA, 6.65%. We’ve paid tax along the way. We’ve obeyed the law. Basically. She wants to change the law. Okay. I don’t think it’s constitutional, by the way. And I’m not worried about it. Whatever happens, happens. It’s just the wrong thing. It’s going to lead to unnatural actions by people.

SCOTT WAPNER: Let me ask you this, so, she’s not obviously the only one who has engaged in this debate, back and forth, what some want to call a war on wealth. Robert Rice, Former Labor Secretary –

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: Another -- let me tell you if I told you some of the things he said, I can’t find the quote.

SCOTT WAPNER: I’m going to say – I’m going to say it for you. He Tweeted the other day, and I’m quoting here--I want your response to it: There are basically five ways to accumulate a billion dollars in America. One, profiting from a monopoly. Two, insider trading. Three, political payoffs. Four, fraud. Five, inheritance. None of these has anything to do with being successful in the supposed free market. That’s what he said.

LEON COOPERMAN: I don’t want to be derogatory. But I happen to be very friendly with Bernie Marcus. The hardware business is very get competitive. Lowe’s is a very competitor to Home Depot. Home Depot happens to out execute them. But basically – in my opinion. Is Home Depot a monopoly? No. There are very few monopolies in America. Okay. There are good businesses and there are bad businesses. But what he says is totally -- it’s ignorant to the facts.

And this is a Professor of Harvard. That’s probably part of the problem, 40% of the millennials, to my understanding, think that socialism is a period of capitalism. The reason they’re exposed to all of this crap at the college campuses is from these left leading professors. Okay, so, you know, okay, so I don’t know, I’m Uncomfortable in this position. I think her ideas are wrong. But, I was really addressing the approach she takes. I don’t even think she’s read my letter.

She’s never responded in any substantive fashion to what I wrote to her. And I spent a lot of time with some additional help of my firm to write that letter. And I have a few questions for the good Senator. How many months a year do you want to work for the government? And how many months do you want to work for yourself? Secondly, what is your effective tax rate last year? Third, I congratulate you on your financial success but I wonder how a college professor and a politician can accumulate an $18 million net worth.

I’m interested in learning, explain it to me. I repeat what I said in the closing paragraph I sent to you, let’s work together to solve our problems and stop with these pithy, nonsensical Tweets. You should know better than that. As our former classy first lady Michelle Obama said, when they go low, we go high. I try to stay on the high road. If you keep up with this baloney that you’re putting out there, I may be forced to go on the low road. I’ll ask you, why did you lie on your Texas bar application in 1986?

Okay. Why did you lie on your application to Harvard and University of Pennsylvania when you applied for employment saying you were American-Indian heritage? We don’t need another fabricator in the White House. What we have to do is work together, be serious students and understand. I have no problem paying higher taxes. You want to move me from 50% from 37, and that’s the will of the country, then that’s fine.

There’s no better place to live than America. And I’ll pay whatever taxes are asked of me, and I’ll do whatever I have to do. You -- but your attacks are directed to the wrong person and on the wrong issues. And as you said, Scott, I’m not there alone. I have a lot of company and I really don’t relish being in this position. I don’t need the notoriety, I don’t need the visibility and I want to be left alone and I got one genius sent me an email -- I got 400 something emails, 399 favorable. One guy said, if I knew where you lived I’d put a bomb in your car. You know. That’s what we’re dealing with, Scott.

SCOTT WAPNER: Look, I mean, you have gotten some threats, since all of this started.

LEON COOPERMAN: It’s your fault. It’s your fault.

SCOTT WAPNER: Well, I didn’t put words in your mouth at Delivering Alpha. I just asked you a question.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: No. You asked me a question. Let me tell you something, I think if Elizabeth Warren wins or Bernie Sanders wins, the market goes down more than 25%. Okay. And the market is assuming that the current President wins again. I don’t think it’s a shoo-in nor should it be a shoo-in and I have issues and I have plenty of issues. You got me until trouble with Warren, and now you’re going to get me in trouble with the President. I talk what I believe, you know, and that’s it. I’m sorry, you go ahead. Thanks for being gracious in giving me time.

SCOTT WAPNER: I’m certain she’s going to, if she’s not watching this live, she’s going to find it and she’s going to see it and she’s going to respond to it. And then what are you going to do?

LEON COOPERMAN: I’m going to do nothing. I’ve said my peace. I’ve said my peace. Listen, I’ve said this before, I’m a philanthropist with a small p. There are so many guys out there, and ladies, that I admire for what they’ve done. But, I’m very lucky. You know, I went to public school, ’75 in the South Bronx. The largest high school in the South Bronx. Hunter College in the West Bronx – I went West. Okay. I was the first generation of my family born in America. My father came to America from Poland at the age of 13 as a plumber’s apprentice. He died carrying up a sink in a tenement building in Florida where he was working.

And basically, in retirement. And I’ve done very, very well. I’m very lucky. And I’m going to give it all back. She has fault with that, that’s her problem. Not my problem. I’m at peace with myself. And that’s it. I’m done. No more -- you know, what’s happened -- actually, I fill a nice news hole. I work for free. People don’t pay me. So whether it’s CNBC, Bloomberg, CNN, Fox News, they’re all calling me.

You know, I don’t need it, I don’t need it. I don’t need the visibility. I tell everybody I’m like the guy in "Godfather" Hymen Roth, right before they shot him at the airport. He said I’m a retired, I’m a retired executive living on a pension. I’m a retired money manager living on investment income. My greatest pleasure in life is seeing my kids and my grandkids grow old, living purposely and giving away my money. That’s it.

SCOTT WAPNER: Well, we understand. Lee, let’s just leave it there. Let’s leave it there.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: And I appreciate the time you’ve given me. And I promise you, this is the last thing. Next time we talk, we’ll be talking about the market and we’re going to talk about the stocks we like. We’re not going to talk about politics. But I’ll go on record, if this lady wins, we’re in big trouble.

SCOTT WAPNER: I’m going to make that the last word. Lee, thanks for the time.

LEON COOPERMAN: My pleasure.

SCOTT WAPNER: I’m sure we’ll talk to you soon.

OMEGA ADVISORS CHAIRMAN LEE COOPERMAN: Alright. Bye bye.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver