Joe Sanberg/Wikimedia Commons
Alaska-connected financier accused of swindle
A one-time best bud of Alaskan Gabrielle “Ellie” Rubenstein, a member of the Permanent Fund Corporation’s board of directors up until last summer, now has a $145 million problem.
Sanberg is a hard guy to forget if you met him back in the early 2010s when he was selling do-good capitalism, which is what he was doing when I encountered him at the Campbell Lake home of Alice Rogoff, then majority owner of the Alaska Dispatch, an online news operation.
Sanberg was at Rogoff’s lakeside home with Rubenstein with whom he shared a connection to Harvard University, which both had attended. Rogoff was at the time the estranged wife of David Rubenstein.
One of the richest men in the country, David was supporting Alice with a martial separation agreement that reportedly rewarded her with something on the order of $5 million per year to generally stay away. Ellie was one of the Rubenstein’s three children.
A one-time member of the Harvard ski team, she was in Alaska visiting her mother after a reported traumatic brain injury in a crash while skiing. How and why Sanberg accompanied her to Alaska is lost in the memories of long ago, but he was introduced as a friend of Ellie’s and nothing more.
Or at least not romantically. Business-wise, he and Ellie were founding members along with Alaskan Hugh Short in an Alice-backed and organized limited-liability corporation known as PT Capital, which lived on long after Alice fled Alaska.
PT, an investment firm, was intended to pursue Alice’s then-commendable vision of creating jobs in Alaska, especially in rural Alaska. The company is today involved in tourism in Alaska, Iceland, and the Yukon Territory, Canada – businesses it describes as “generating revenue,” – and telecommunications in Iceland, a business which it describes as profitable.
Sanberg appears to be gone from the company, but as late as 2018 was referred to as “a co-founder of Pt Capital, a private equity firm that invests in mature telecommunications, hospitality and transportation companies that operate in Alaska, the Pacific Northwest and Scandinavia.”
PT’s biggest economic play came in 2017 when it purchased 100 percent of Iceland’s Nova, a telecommunications company. Less than two years later, it reached an apparenlty profitable agreement to let Chinese telecom giant Huawei, a company blacklisted in the U.S., test a 5G network in Iceland.
The island in the North Atlantic Ocean home to fewer than 394,000 people is reported to now welcome more than 3 million tourists per year, about the same number as now visit Alaska annually.
How Sanberg ended up connected with PT Capital is the first place unclear, but his interest in Alaska never appeared all that great. He was much more interested in the U.S. poor.
I frankly cannot recall if he ever said anything specifically about “Aspiration Partners” when visiting Anchorage, but he did talk a lot about his plans to capitalize on the assets of the poor (or maybe more accurately the near poor) to help them.
He didn’t mention what he might gain for doing this, but it was pretty clear that he considered some profit a part of the deal, which is not unreasonable.
Ellie didn’t seem much interested in the idea of such disruptions whether in the name of good causes or not. She was instead actively encouraging her mother and others to invest in a platinum mine in far Western Alaska that Ellie was confident would make a fortune.
That deal never came together, fortunately for everyone involved in that the owners of the mine ended up in big trouble with the Environmental Protection Agency for polluting the Salmon River.
Whatever happened to Sanberg in the years that followed all of this is unknown, but he is no longer looking like the progressive, poverty-fighting, Green New Deal Democrat that he made himself out to be.
The Justice Department has accused him of being nothing but a swindler.
Aspirations
Sandberg’s aspirations of turning Aspiration into a company that could help the poor never really materialized, but Aspiration did morph into a seeming do-good capitalism project.
Back in his Orange-Country California home, Sanberg began selling Aspirations as a “climate-friendly banking alternative that’s good for your wallet and the planet,” as its website now proclaims. “Enjoy no mandatory fees while earning cash back, planting trees, and keeping your money from funding fossil fuels.”
“Clean rich is the new filthy rich” then became Sandberg’s pithy sales pitch.
After getting Colossal Media, a New York City advertising company, to paint billboards pushing the pitch on some buildings in the Big Apple, Aspiration proclaimed that each “wallscape” had been coated with “LumActiv, a treatment that actively purifies the surrounding air of pollutants.”
LumActiv is a titanium dioxide-based coating that accelerates photocatalysis, a process that does help clear the air of pollutants. The coating was first developed by the National Aeronautics and Space Administration (NASA) to purify indoor air and later found to be effective in keeping dirt off the exterior of buildings, according to the space agency.
The coating conceivably could be used to help purify outdoor air, but that would require painting blocks of buildings with LumActiv not just seven wallscapes.
Aspiration’s exaggerations of its good, environmental intentions led ProPublica to in 2021 headline a story that identified the company as “The Celebrity-Backed Green ‘Fintech’ Company That Isn’t as Green as It Seems.”
Politico reported that despite Aspiration’s claims to avoid fossil fuel investments, it was invested in “multiple companies that are either huge users of fossil fuels or are in the industry itself.”
If the U.S. Justice Department is to be believed, Sandberg by then had far bigger deceptions going on than those Politico reported.
“In January 2020,” according to a Justice account, “Sanberg began negotiating a $55 million loan from Investor Fund A (a further unidentified fund) to Sanberg, in which Sanberg pledged 10.3 million shares of Aspiration Partners stock as collateral. Because Aspiration Partners was a non-public company without a liquid market to sell its stock, Investor Fund A required Sanberg to find a buyer for the 10.3 million shares of Aspiration Partners stock as a hedge against the risk that the shares could not be sold on the open market.
“To secure (a) $55 million loan, Sanberg recruited (Ibrahim Ameen) AlHusseini, who served on Aspiration Partners’ board of directors, to enter into a put option agreement with Investor Fund A that obligated AlHusseini to buy the 10.3 million shares of Aspiration Partners stock in the event of Sanberg’s default. A put option is an investment contract in which the option buyer has the right to require the option seller to buy an asset from the option buyer at a pre-determined price. Under the option, AlHusseini was obligated to purchase the 10.3 million shares in Aspiration Partners for $55 million from Investor Fund A.”
According to Justice, Sanberg knew AlHusseini lacked the funds to cover the $55 million cost of those shares. Investor Fund A, who did not know what Sanberg and AlHusseini were doing, subsequently lent Sanberg the $55 million.
With those funds in hand, again according to Justice, Sanberg in November 2021 “refinanced the $55 million loan against his 10.3 million shares of Aspiration Partners stock with (unnamed) Investor Fund B. Investor Fund B loaned $145 million to Sanberg against the same 10.3 million shares of stock as collateral. Investor Fund B and AlHusseini agreed to a new put option agreement in which AlHusseini was obligated to pay $65 million to Investor Fund B if Sanberg defaulted on the $145 million loan. The terms of the agreement required AlHusseini to have sufficient assets to pay $65 million in the event of Sanberg’s default,” which AlHusseini lacked.
“Sanberg hid this fact from investors,” according to Justice, “then defaulted on the loans, which resulted in at least $145 million in losses” for investors.
The 51-year-old AlHusseini – a resident of Venice, Calif., arrested earlier in the investigation – is now reported to have pled guilty to wire fraud for falsifying documents in order to assist Sanberg and has begun cooperating with investigators.
The Justice statement says that to make the fraud work, AlHusseini and Sanberg falsified “brokerage account and bank account statements” to secure the loan from Investor Fund B, which Sanberg defaulted “in November 2022 and again in the spring of 2023,” according to Justice. “Investor Fund B exercised its put option requiring AlHusseini to buy the pledged shares of Aspiration Partners stock, which he has not done. As a result of Sanberg and AlHusseini’s fraud, Investor Fund B has suffered at least $145 million in losses.”
The Justice Department statement does not say where the money went or how much of it is believed to be recoverable. Aspiration.com was still offering checking, saving and investing opportunities as of this a.m.
Big fall
For Sanberg, his arrest marks a huge fall from grace. Less than six years ago, the Los Angeles Times billed him as someone who “may run for president to fight poverty.”
The then 39-year-old had attracted attention for successfully pushing anti-poverty legislation in California. He had also, according to the Times, “flirted with politics in 2018 when he weighed running for governor or challenging U.S. Sen. Dianne Feinstein (D-Calif.). Instead, he formed Working Hero, a political action committee that gave about $30,000 to Democratic congressional candidates across the country.”
The left-leaning website reported Sanberg had “burnished his progressive credentials in recent years by successfully lobbying for the creation of CalEITC4Me, the earned income tax credit program which he’s advocated as a means of delivering economic relief to low-income families. His work has earned praise from Gov. Jerry Brown’s right hand, Nancy McFadden, who called him ‘the spark’ of a major economic effort.
“Raised in Orange County by a single mom before he earned a fortune on Wall Street, Sanberg had been mulling a governor’s run, sources familiar with his planning” were said to have told Politico.
Sanberg, however, never launched a serious run for public office, preferring, it would appear, to continue efforts to build his personal fortune. Despite his once significant profile in Democrat politics, at least in California, the mainstream media has been slow to pick up on his latest activities.
But the not-quite-mainstream New York Post was quick on the story. It described Sanberg as “the Democrat-backing multimillionaire founder of a ‘climate-friendly banking’ startup whose celebrity investors included Leonardo DiCaprio, Orlando Bloom and Drake….”
The Post also reported that creditors filed a civil lawsuit against Sanberg and AlHusseini that has already resulted in a judge “issuing a $78 million judgment against AlHusseini and a $209 million judgment against Sanberg.” AlHusseini was said to have transferred $300 million to Saudi Arabia to avoid the judgment.
According to the Post, a New York judge in January also “found AlHusseini in contempt for spending money on luxury items and political donations instead of settling his debt.”
AlHusseini, who had been jailed in October in connection with the fraud investigation, was by then out on bail. His bail, the Post reported, was secured by prominent liberal figures such as CodePink founder Jodie Evans. CodePink is a far-left antiwar group that has made headlines in recent months for protesting the Israel-Hamas war,” the Post reported.
AlHusseini and Sanberg are an unlikely partnership given that the former is a Palestinian raised by his parents in Saudi Arabia and the latter is Jewish, but does not appear to have been among the few American Jews protesting Israel’s counter-attack on Hamas and the ongoing war in the Mideast.
Whether he and Ellie remain close friends is unknown. The co-founder and managing partner of a Colorado company called Manna Tree Partners, another investment firm that bills itself as a financer for do-good capitalism, Ellie appears to have left Alaska to focus on that well-intentioned business.
Manna reports current investments in a variety of health-food companies – Vital Farms, which sells eggs from pasture-fed chickens; Gotham Greens, a company that says it is using “hydroponic systems in 100 percent renewable electricity-powered greenhouses” to grow vegetables in five states; Good Culture, which “makes healing foods available to all without hurting the planet or animals;” Health-Ade Kombucha, which “is on a mission to unlock the power of your gut,” and more.
When Ellie was three years ago named to the board of the Alaska Permanent Fund Corporation, which oversees the state’s more than $80 billion investment fund, the office of Gov. Mike Dunleavy described her as “a resident of the state for the last decade” with a background in “investments and philanthropy, and she is an avid angler, hunter, and pilot.”
What her fishing, shooting and flying had to do with managing the Permanent Fund is unclear, but that’s what the statement said.
A little more than a year after her appointment and her rise to vice-chair of the Fund, The Alaska Landmine – a tabloidesque, online Anchorage publication generally thought to lean left but sometimes all over the place – accused the fund’s her of making “glaring factual errors and false claims about her professional history and role on the board” while at a financial conference in Saudi Arabia.
More problems were to follow for the daughter of Rubenstein and Rogoff.
Emails leaked to the Landmine in the spring of 2024 suggested Ellie might be trying to steer Permanent Fund investments to her father’s company, The Carlyle Group, which was already managing about $1 billion in fund assets, or to Manna Tree in which her father is a limited partner.
It reported that Chris Ullman, David Rubenstein’s spokesman, “acknowledged (Ellie) had made about 20 referrals of external asset managers to Alaska fund staff, but said she had followed established protocols and had not exerted improper pressure. She denied setting up a meeting between employees and her father, or seeking to have anyone fired.”
Her father’s spokesman entering the discussion to defend Ellie only added fuel to the fire, and two months later she resigned from the board.
What the relationship these days between the progressive Sanberg and Ellie, who came out as a Trumpster in 2016, is unknown, but his arrest does illustrate that one shouldn’t judge people’s ethics or morals based on their politics.
Sanberg may well be legally innocent of the charges against him. The Justice Department has been known to make mistakes. But if the Justice’s claims to date are anywhere near accurate it would appear clear he hasn’t always been completely honest in his dealings with others.
Editor’s note: This is an update of the original version of this story. It was edited to reflect Joe Sanberg’s involvement with PT Capital.
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