Ted Cruz’s Sugar Daddy Has a $2 Million Toy Railroad

A crucial fundraiser at the home of a billionaire programmer’s daughter—in a building with Donald Trump’s name on it, no less—may have given the Texas senator the keys to his Iowa win.

Photo Illustration by Emil Lendof/The Daily Beast

Sen. Ted Cruz had no sooner declared his candidacy for president than he dashed from Liberty University in Virginia to a fundraiser at the Manhattan home of a hedge fund billionaire’s daughter.

The billionaire is 69-year-old Robert Mercer, a onetime computer programmer who applied his smarts to the markets and is now the big money man behind the Cruz campaign. Mercer is also likely the inspiring spirit behind the high-tech Cruz campaign. Mercer is said to have a financial interest in a firm that is seeking to use such voter data as Facebook likes to boost even a candidate as widely disliked as Cruz.

A reminder of just how badly Cruz needs such cyber magic was provided by a brass plaque at the high-rise where Mercer’s daughter, Rebekah, resides. The plaque identifies the building as The Heritage at Trump Place, part of a bigger than big project that Donald Trump undertook only to find himself in impossible debt. Trump was rescued in two other predicaments by a Saudi prince, but in this instance he was saved by a group of Chinese investors.

Trump had retained a minority interest and squawked when the Chinese investors sold it to an American consortium without bothering to consult him. Trump sued, insisting that he could have obtained a better price. The case was dismissed, and it seemed that Trump was a Chinese synonym for loser.

But none of that seemed to matter. Nor did Trump’s multiple bankruptcies, nor his dealings with organized crime, nor his employment of undocumented immigrants, nor his outsourcing of his clothing line to China and Lesotho, nor his bigoted remarks about Muslims and Mexicans, nor his crude comments about women, nor his myriad exaggerations and his outright fibs.

Trump was still widely seen as The Donald, the yuge winner portrayed on the reality TV show The Apprentice. His name was still considered such an asset that it adorned numerous properties that he did not own. That included The Heritage at Trump Place, where Rebekah Mercer is said to have an upper-floor, 13,000-plus-square-foot amalgamation of six apartments, all with herringbone mahogany floors.

The very fact that Trump’s name was still on this building signaled that Cruz was going to need more than some campaign cash to win. He would need to translate to the electorate the same kind of computer power that made Mercer a billionaire.

The Data versus The Donald.

Robert Mercer was not present at the fundraiser in his daughter’s apartment, but he certainly would have approved of the talk Cruz gave to those who were in attendance. Cruz proposed tax reform that would begin with getting rid of the IRS altogether. Mercer is co-CEO of Renaissance Technologies, which is engaged in a protracted dispute with the IRS over $3 billion in taxes.

Mercer also shares Cruz’s views about global warming. The Mercer Family Foundation, which is run by Rebekah Mercer, is a major supporter of the Heartland Institute, once a leading opponent of smoking bans as well as a denier of the dangers of secondhand smoke, and now one of the foremost deniers of climate change.

Robert Mercer avoids public attention, and comparatively little is known about him considering his wealth and his outsize influence in the Cruz campaign. A lawsuit filed by his household help would seem to suggest that he can be as unlikable as his preferred candidate. The 2013 suit alleges that the servants worked as many as 65 hours a week without overtime and had their compensation cut for such infractions as “failing to replace shampoos and other toiletries if there was an amount of less than one-third of a bottle remaining; failing to properly close doors; failing to leave extra towels in the bathroom; failing to change the razor blades in the shaver; failing to level pictures; leaving cleaning items out; leaving items in the refrigerator; and improperly counting beverages.”

In another lawsuit, Mercer alleged that he had been vastly overcharged for the construction and installation of a HO scale model railroad at his home. Mercer said he had contracted to pay $119,200 but had been billed for $2,694,833. He seems to have paid the bill before he noticed that he had been overcharged to the tune of $1,990,164.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

By clicking “Subscribe,” you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

But if the two suits suggest that Mercer is a rich jerk, it is hard not to like him for being so supportive of another of his three daughters, who was an all-state placekicker and sole girl on her high school football team. Heather Sue Mercer had gone on to Duke University only for the football coach to bar her from the team because of her gender. She filed a discrimination suit in federal court in 1997 and won.

The man now championing the unlikable Cruz is also surprisingly appealing in a 2014 video of him delivering a rare public address. Robert Mercer gave the talk—titled “A Computational Life”—upon receiving a lifetime achievement award from the Association for Computational Linguistics. He began by saying he had been somewhat daunted when told the honor was accompanied by the expectation that he would give an “oration” for an hour.

“Which by the way is more than I typically talk in a month,” Mercer said.

He succinctly described himself.

“What I am is simply a computer programmer,” he said. “I’ve taken great pleasure in writing programs that do remarkable things.”

The passion went back to his boyhood in New Mexico. He had walked around with a big notebook filled with programs he wrote.

“It’s very unlikely any of them actually worked because I never had a computer to run them on,” he allowed.

He had finally gotten a chance to work on one at a three-week national science summer camp. He went on to the University of New Mexico and would have taken computer science courses, but there were none in those days. He went to work at a government weapons lab that was doing computerized studies of the electromagnetic pulse generated by fusion bombs.

“I loved everything about computers,” he said. “I loved the solitude of the computer lab late at night. I loved the air-conditioned smell of the place. I loved the sound of the disks whirring and the printers clacking.”

His passion was accompanied by a gift as he devised a way to speed up the computer 100-fold.

“Then a strange thing happened,” he recalled. “Instead of running the old computations in one-hundredth of the time, the powers that be at the lab ran computations that were 100 times bigger.”

He continued, “I took this as an indication that one of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget. Which has left me ever since with a jaundiced view of government-financed research.”

He had gone on to become a researcher at IBM, where he was part of a team that did pioneering work in statistical approaches to speech recognition and to translating from one language to another.

Only in his forties did he leave IBM and go to work for Renaissance Technologies. His gift with computers translated information into money, money, money.

Now a hedge fund billionaire, he had a Long Island mansion he dubbed the Owl’s Nest, not to be confused with Hitler’s Eagle’s Nest. His investments included a firearms company that provides guns to law enforcement and the military, as well as to the movie and TV industry. His family foundation subsidized research such as the government was not likely to finance, notably the Oregon Institute of Science and Medicine, where Dr. Art Robinson compiles “metabolic profiles” with what may be the world’s biggest collection of urine samples. Mercer also made unsolicited contributions to Robinson’s two unsuccessful runs for Congress.

Mercer’s jaundiced view seems to have extended to government in general, and he decided to bankroll a presidential candidate whose stated views fit with his own. Mercer may have even taken it as a positive sign that Cruz was distrusted and generally reviled by his own colleagues in the Senate. Cruz echoed his backer’s views on everything from guns to the gold standard to scrapping the EPA as well as the IRS.

Mercer retained his faith in computers and is said to have invested in Cambridge Analytica, which grew out of a British firm that helped various governments and armies conduct psychological operations. Cambridge Analytica contracted with the Cruz campaign to conduct “psychographic targeting” of individual voters.

Other campaigns past and present have used “big data,” but the Cruz campaign now made it bigger than big. Operatives collected vast amounts of data and composed profiles based on as many as 50,000 variables ranging from voting histories to favorite websites to automobile ownership to Facebook likes. The results were used to divide voters into what are known as the Big Five personality traits: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism. Digital ads, emails, phone calls, even personal visits were all adjusted to a particular individual. Websites were “geo-fenced” so they would only be accessible in a discreet area, sometimes as small as a single building.

The test came with the approach of the Iowa caucuses. The Donald was said to be ahead, but then The Data went to work. The magic of computers set to translating Likes into votes for the guy nobody likes.

In the immediate aftermath of the Cruz victory, Trump was remarkably gracious. The uncontestable fact of the loss then seemed to work on this man who is so accustomed to declaring himself a winner, no matter what the truth. He became all the more agitated because one of Cruz’s targeted mailings had mixed high tech with the kind of low blows that have helped make the senator so widely scorned.

Apparently sent to nudge likely Cruz supporters into caucusing, this mailing had been made to look like an official government document, complete with the words “VOTING VIOLATION” in red.

“You are receiving this election notice because of low expected voter turnout in your area,” the recipient was informed. “Your individual voting histories as well as your neighbors’ are public record. Their scores are published below, and many of them will see your score as well. CAUCUS ON MONDAY TO IMPROVE YOUR SCORE and please encourage your neighbors to caucus as well. A follow-up notice may be issued following Monday’s caucuses.”

The mailer listed the recipient’s name along with those of six neighbors, each accorded a letter grade and a numerical score, supposedly a voting percentage. The names were generally accurate, but the scores seemed to bear no relation to real voting records. One mystery is why a campaign with such a mass of actual data would fudge it.

Trump tweeted that the Cruz campaign had committed voter fraud with the mailer and by incorrectly announcing that Dr. Ben Carson had withdrawn from the race. The danger for Trump was that he could come across as a sore loser.

And that was a serious threat indeed for a man who had managed to keep his name a marquee brand despite all the bankruptcies and foreclosures and rescues by foreign money.

Maybe the only person who can undo Trump is Trump.

Unless it turns out The Data really can beat The Donald.