Summers and the Hedge Fund: The Plot Thickens
Writing for the Bloomberg news service, Brett Cole and Katherine Burton suggest a new reason for D.E. Shaw & Co. to hire Larry Summers: influence-buying.
As this introduction to the article notes,
The Treasury Department is currently conducting an inquiry into hedge funds, in order to determine if further regulation of the $1.3 trillion industry is needed.
Under those circumstances, then, it can't hurt to have a former Treasury secretary on your payroll, helping make contacts with current officials, doing his best to argue that further regulation really isn't required.
Is it a coincidence, then, that Summers and former Treasury secretary John Snow were hired by different hedge funds on the same day?
Before some of you rush to criticize me for this, please note that this isn't my suggestion—it's clearly the article's implication.
The revolving door between Wall Street and Washington has been spinning this year, with Henry Paulson, former Goldman Sachs Group Inc. chairman, taking over for Snow at Treasury. Those who've traded government for finance include Paul O'Neill, Snow's predecessor at Treasury; former Secretary of State Colin Powell; and John Edwards, former vice presidential candidate and senator from North Carolina.
And by the way, the stakes are high indeed: David Shaw, Summers' new employer, made $340 million last year. That's 340, 000, 000.