Key Takeaways
- • Washington Examiner columnist Timothy Carney alleges that Democratic Sen. Chuck Schumer maintains improper relationships with hedge funds through former staffers who now lobby for the industry, raising concerns about potential conflicts of interest in financial regulation.
- • Carmencita Whonder, a former Schumer banking committee staffer, joined lobbying firm Brownstein, Hyatt, Farber, Schreck in 2007 and immediately registered three private equity firms as clients; by the Obama administration's arrival, her client roster expanded to include the Private Equity Council and seven hedge fund or private equity firms.
- • Whonder raised $18,200 for Schumer according to Federal Election Commission documents and transitioned to the Managed Funds Association—hedge funds' primary lobbying organization—in March 2009 as Congress began crafting financial regulation reform.
- • Hedge fund lobbyists serve as official bundlers for the Democratic Senatorial Campaign Committee, which Schumer previously chaired, potentially creating a financial incentive structure that benefits the hedge fund industry through favorable legislation.
- • Carney argues the arrangement produces tangible returns for hedge funds, noting that the Managed Funds Association supports SEC registration requirements for hedge funds—a regulation that advantageous larger funds over smaller competitors.
Summary
Washington Examiner columnist Timothy Carney has raised concerns about Democratic Senator Chuck Schumer's relationship with the hedge fund industry, arguing that the senator maintains improper connections through former staffers who now represent hedge fund clients. Schumer, who chairs the Senate Banking Committee, has come under scrutiny for what Carney characterizes as a revolving-door dynamic between his office and the hedge fund lobbying apparatus.
The primary nexus of concern involves Carmencita Whonder, a former Schumer banking committee staffer who departed in 2007 to join the lobbying firm Brownstein, Hyatt, Farber, Schreck. Upon her hire, Whonder rapidly registered three private equity firms as clients; by the time of the Obama administration's inauguration, her client list had expanded to encompass the Private Equity Council and seven additional private equity or hedge fund entities. This expansion raised questions about whether her transition facilitated preferential access to Schumer's office during a critical period for financial regulation.
The concerns intensified in March 2009 when Whonder joined the Managed Funds Association, the primary lobbying organization for hedge funds, precisely as Congress began deliberating comprehensive financial regulation reform. According to Federal Election Commission documents cited by Carney, Whonder also raised $18,200 for her former employer. Additionally, other hedge fund lobbyists serve as official bundlers for the Democratic Senatorial Campaign Committee, an organization Schumer previously led, creating what critics characterize as a coordinated fundraising infrastructure benefiting the industry.
Carney contends that this arrangement yields measurable benefits for hedge funds. He notes that the Managed Funds Association supports requiring hedge fund registration with the Securities and Exchange Commission—a regulatory measure Carney argues advantageously positioned larger funds over smaller competitors. The columnist concludes that hedge funds have achieved a favorable return on their political investment in Democratic candidates and Schumer's staff, securing "beneficial legislation" through their financial and lobbying presence.
The primary nexus of concern involves Carmencita Whonder, a former Schumer banking committee staffer who departed in 2007 to join the lobbying firm Brownstein, Hyatt, Farber, Schreck. Upon her hire, Whonder rapidly registered three private equity firms as clients; by the time of the Obama administration's inauguration, her client list had expanded to encompass the Private Equity Council and seven additional private equity or hedge fund entities. This expansion raised questions about whether her transition facilitated preferential access to Schumer's office during a critical period for financial regulation.
The concerns intensified in March 2009 when Whonder joined the Managed Funds Association, the primary lobbying organization for hedge funds, precisely as Congress began deliberating comprehensive financial regulation reform. According to Federal Election Commission documents cited by Carney, Whonder also raised $18,200 for her former employer. Additionally, other hedge fund lobbyists serve as official bundlers for the Democratic Senatorial Campaign Committee, an organization Schumer previously led, creating what critics characterize as a coordinated fundraising infrastructure benefiting the industry.
Carney contends that this arrangement yields measurable benefits for hedge funds. He notes that the Managed Funds Association supports requiring hedge fund registration with the Securities and Exchange Commission—a regulatory measure Carney argues advantageously positioned larger funds over smaller competitors. The columnist concludes that hedge funds have achieved a favorable return on their political investment in Democratic candidates and Schumer's staff, securing "beneficial legislation" through their financial and lobbying presence.
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