For Schumer, the Double-Edged Sword of Cozying Up to Hedge Funds

[BeyondGeography]

By JENNY ANDERSON
Published: June 22, 2007

<...Last week, (Max Baucus introduced) legislation that would raise taxes on publicly traded private equity firms. Now taxes on the industry — all sorts of them — are front and center. This is the industry’s worst nightmare. Private equity funds and hedge funds have hired lobbyists in spades and look to their friends in Congress for help.

And many are looking to Mr. Schumer, the one they know and finance the best. That in turn puts Mr. Schumer in a tough spot. He raises a lot of money from Wall Street and has been quick to tap into the geyser of wealth made by the private equity and hedge funds.

In the 2003 and 2004 election cycle, Mr. Schumer raised $54,500 from leading private equity firms, more than twice that of any colleague on the Senate Finance Committee (not including John Kerry, who was running for president), according to the Center for Responsive Politics. Since Mr. Schumer took the helm of the Democratic Senatorial Campaign Committee in 2005, Wall Street-sponsored fund-raisers seem as frequent as Broadway openings. In the 2005 and 2006 cycle, Mr. Schumer helped the committee raise $385,450 from the top private equity players, according to the Center for Responsive Politics. He knows hedge funds give more to Democrats than Republicans and has capitalized on that.

But he is also concerned about keeping the New York markets competitive. In January, Mr. Schumer and Mayor Michael R. Bloomberg of New York released a report concluding that New York could lose significant ground to foreign capital markets if certain issues — regulation and litigation, for example — were not quickly addressed. >

<“The senator is mindful of the importance of this industry to New York and is making sure that all sides get an opportunity to be heard by the policy makers in Washington while he studies the issues carefully,” a spokesman for Mr. Schumer, Andrew Koneschusky, said.>

http://www.nytimes.com/2007/06/22/business/22insider.html?_r=1&ref=business&oref=slogin