Raj Rajaratnam played politics, like others in the hedge fund world
Thursday, November 5, 2009
Raj Rajaratnam, fending off one of the largest insider trading cases in history, may or may not reflect other hedge fund billionaires. But Rajaratnam and his Galleon Management LP certainly follow the hedge fund industry’s pattern of political contributions.
At least a half-dozen of the people facing SEC charges are or have been Californians. On Thursday, the commission, for example, charged Ali Harari of San Francisco with passing along inside information to one of the alleged leaders of the scheme.
Harari was vice president at Atheros Communications of San Jose. Five have pleaded guilty in the case, including three from the Silicon Valley.
As often is the case, high-fliers in the financial world dabble in politics by dishing out campaign money. Hedge funds have become involved in recent years as Congress contemplated — and generally backed off — imposing regulations and standards on the secretive industry.
The nonpartisan Center for Responsive Politics found that the hedge fund industry spent $12.4 million since 2008 on lobbying in Washington. As recently as 2006, the industry spent less than $1 million annually trying to shape federal legislation.
Just as eye-popping, the industry’s campaign spending has shot up. In the 2008 election, donors identified as being part of the hedge fund industry spent more than $17 million on federal campaigns, the Center for Responsive Politics found. In 2004, hedge fund executives spent $4.5 million.
Rajaratnam is no exception. He and his wife, Asha, have given $118,000 to candidates this decade. Of that, the couple gave $100,600 since 2006, according to a receive of Federal Election Commission records by protectconsumerjustice.org .
Altogether, executives, traders and others affiliated with Rajaratnam’s Galleon Group donated $173,450 to federal campaigns, including $135,550 since 2006, FEC records show.
The hedge fund industry bet heavily in 2008 that Democrats would prevail, giving 65% of their money to Democrats, according to the Center for Responsive Politics. Rajaratnam and his wife were even more partisan, giving all their money to Democrats, including $30,800 to Barack Obama’s presidential campaign.
There is no record of donations from Harari. Others at his firm have given a modest $7,900 to federal campaigns during this decade.
Category: Political Influence;