While Wall Street banks are being hauled before Congress for public reprimand, hedge funds and private equity firms have floated blissfully above the fray, thanks to an army of well-connected lobbyists. More than half of the 83 new lobbyists who signed up with the industry's two main trade groups last year came from government jobs, Politico reports. That includes three former members of Congress, and several former top staffers for the Senate Banking Committee.
The industry spent $7.3 million on lobbying last year, and another $2 million in the first three months of this year, so the financial reform bill leaves it relatively unscathed. Under it, regulators would be able to examine hedge funds' books, but not demand changes. It's “a pretty sweet deal,” says the head of one consumer group. “There's no question they've gotten a free ride.” But the industry counters that it simply doesn't pose a systemic risk, and hence needn't be regulated. (Read more hedge fund stories.)