Did you watch today's hedge fund hearings on Capitol Hill? Probably not. Well the most remarkable thing about them wasn't anything that went on at hearings. It's that the hearings were happening at all. The hedge fund industry seems to be operating quite nicely, especially in light of the orderly dissolution of Amaranth. So why are we having hearings about hedge funds?
It might have something to do with the story reported by Jenny Anderson's in today's business section of the New York Times today. After noting that hedge funds haven't spent much on lobbying firms, and Jenny writes that "Political contributions show a similar pattern: the numbers are growing, but pale against the wealth managed by the fast-growing industry."
Are we just imagining a scolding tone in that particular phrasing? Funny how campaign contributions from big money donors are usually presented in the press as a corrupting influence but when it comes to hedge funds and private equity firms, the lack of political involvement is often portrayed as something close to anti-democratic.
But maybe it's just us. Because we can't read Jenny's lede without imaging what this would sound like if you substituted Tony Soprano for Chuck Schumer.
On a cold evening in late January, Senator Charles E. Schumer invited a who’s who of hedge funds to dinner at Bottega del Vino on the Upper East Side of Manhattan. More than $100 billion worth of wealth sat around the table, including Paul Tudor Jones of Tudor Capital; Steven Cohen of SAC Capital; Stanley Druckenmiller of Duquesne Capital; and James Chanos of Kynikos Capital, according to a person who was briefed on the dinner.
Mr. Schumer, the New York Democrat, had some simple advice for the billionaires in his midst: If you want Washington to work with you, you had better work better with one another. (Mr. Schumer and the hedge fund managers declined to comment).
Then there's also the quote Tim La Pira:
“The small proportion of money they are spending is related to the fact that they are not heavily regulated,” said Tim La Pira, a lobbying researcher at the Center for Responsive Politics. “Heavily regulated industries like banking or oil and gas spend an enormous amount of money because they have a history and legacy of being regulated.”
Now read that paragraph again from the point of view of a lawmaker hoping to raise money from hedge funds for re-election or a lobbyist in search of fees. And now you can stop wondering why we had those hedge funds hearings today.
Big Money Still Learning to Lobby [New York Times]