Washington Babylon — November 28, 2008, 11:51 am

Summers and Hedge Funds

After being named as Barack Obama’s top White House economics adviser, Lawrence Summers resigned from his post as a managing director of D.E. Shaw & Co, a leading hedge fund. “Neither the Obama transition team nor D.E. Shaw would say exactly what Summers had done in his two years of work for the $36 billion hedge fund, or how much he has been paid, Politico reports. A 2007 article in Institutional Investor’s Alpha says only that Summers was hired to work “with the senior management team to ?nd new ways to generate pro?t and manage risk.”

D.E. Shaw is a member of the Managed Funds Association, the leading lobbying organization for the hedge fund industry. The MFA was founded last year and since then has spent about $3.5 million lobbying the federal government, according to federal disclosure records. Its priorities include blocking regulation of hedge funds and financial instruments like derivatives. The MFA also opposes higher taxes on hedge funds and their managers. Incidentally, David E. Shaw, the founder of Summers’ recent employer, earned about $210 million last year.

Top lobbyists at the MFA include former Louisiana Congressman Richard Baker, previously of the House Financial Services Committee, and Roger Hollingsworth, who was hired in August. Hollingsworth was hired from the Senate Banking Committee, where he served as deputy staff director and senior policy advisor to Committee Chairman Christopher J. Dodd,” says his bio. (Hollingsworth is a one-man revolving door. Before going to work for Dodd, he lobbied for the Securities Industry
Association, and before that he worked for Democratic senators Jon Corzine and Charles Schumer.)

The MFA spent a few million more on lobbyists from eight outside firms it retained. The roll call of former officials working for the association include, at one firm alone, Senator Don Nickles; Rachel Jones Hensler, tax policy director for the Budget Committee under Nickles; Hazen Marshall, staff director for the Senate Budget Committee; and Brian Wild, a former top aide to Vice President Dick Cheney. The list goes on and on.

The MFA and people affiliated with it donate lavishly to politicians as well, overwhelmingly to Democrats. Trey Beck, the managing director of D.E. Shaw who helped hire Summers and who is also a board member of the MFA, gave more than $40,000 to the Democratic Senatorial Campaign Committee in recent years (not to mention $2,200 to Moveon.org in 2004).

“As citizens, we’re delighted that President-elect Barack Obama has selected Larry Summers to head the National Economic Council,” D.E. Shaw said in a newly released statement.

The MFA is surely delighted as well.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $39.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

January 2015

Come With Us If You Want to Live

= Subscribers only.
Sign in here.
Subscribe here.

The Body Politic

= Subscribers only.
Sign in here.
Subscribe here.

The Problem of Pain Management

= Subscribers only.
Sign in here.
Subscribe here.

Game On

= Subscribers only.
Sign in here.
Subscribe here.

Love Crimes

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
The Body Politic·

= Subscribers only.
Sign in here.
Subscribe here.

“‘He wrote all these love poems, but he was a son of a bitch,’ said a reporter from a wire service.”
Illustration by Steven Dana
Article
Love Crimes·

= Subscribers only.
Sign in here.
Subscribe here.

“If a man rapes a woman, she might be forced to marry him, because in Afghanistan sex before marriage is dishonorable.”
Photographs © Andrew Quilty/Oculi/Agence VU
Article
Game On·

= Subscribers only.
Sign in here.
Subscribe here.

“The end of the Cold War and the collapse of the Soviet Union had posed a truly existential threat.”
Illustration by Taylor Callery
Article
Come With Us If You Want to Live·

= Subscribers only.
Sign in here.
Subscribe here.

“I was startled that all these negative ideologies could be condensed so easily into a positive worldview.”
Illustration by Darrel Rees
Article
Christmas in Prison·

= Subscribers only.
Sign in here.
Subscribe here.

“Just so you motherfuckers know, I’ll be spending Christmas with my family, eating a good meal, and you’ll all be here, right where you belong.”
Photographer unknown. Artwork courtesy Alyse Emdur

Acres of hemp grown by “patriotic‚” U.S. farmers in 1942 at the behest of the U.S. government:

36,000

A study suggested that the health effects of exposure to nuclear radiation at Chernobyl were no worse than ill health resulting from smoking and normal urban air pollution.

Greenpeace apologized after activists accidentally defaced the site of Peru’s 2,000-year-old Nazca Lines when they unfurled cloth letters reading “time for change” near the ancient sand drawings. “We fully understand,” the group wrote in a statement, “that this looks bad.”

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

In Praise of Idleness

By

I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.

Subscribe Today