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Hedge Rows Paulson & Co. made as much as $12 billion last year betting that the housing market would tank. Now the firm’s throwing a tiny bit of its financial weight behind the Keep Your Home Alliance, a new campaign advocating for consumer-friendly bankruptcy reform legislation. Paulson’s hedge fund is the only entity listed on registration forms as having a $10,000-plus stake in the alliance’s efforts. The alliance has so far paid at least $140,000 to two outside lobbyists, American Continental Group’s David Metzner and Patton Boggs’ Jonathan Yarowsky. Both men appear well positioned to do the work: Metzner is the former chief of staff to Sen. Arlen Specter (R-Pa.), the author of a Senate bankruptcy protection bill, and already represents hedge funds. Yarowsky, meanwhile, counts the National Association of Bankruptcy Attorneys as a client and is a former general counsel to the House Judiciary Committee. The alliance itself, meanwhile, is based out of the Arlington, Va., offices of the Hastings Group. According to Maureen Thompson, a consultant for the firm, the goal is to coordinate Paulson’s efforts with nonprofits that have similarly concluded that “the bankruptcy law was an appropriate solution to help people stay in their homes.” Scott Talbott, the Financial Services Roundtable’s senior vice president for government affairs, suggests that legislation giving bankruptcy judges the right to change the terms of mortgages would cause further erosion in housing finance markets. Since hedge funds betting against the market would benefit from such a decline, Talbott says, the funds’ consumer advocacy might not be altruistic.”They bet against the American homeowner, and now they are pushing legislation to increase their profits,” he says. A spokesperson for Paulson & Co. disagrees: “Any suggestion that Paulson is responsible for the housing crisis is nonsense,” he says. “We didn’t make any loans, and we’re not foreclosing anybody.” — Jeff Horwitz
In the Money Private equity is heavily invested in K Street. Year-end reports so far show that the Private Equity Council and private equity firms poured millions into their lobbying efforts during the second half of 2007. The PEC reports paying $780,000 to Akin Gump Strauss Hauer & Feld, $220,000 to Brownstein Hyatt Farber Schreck, $40,000 for the Cunningham Group, and $160,000 to Johnson, Madigan, Peck, Boland & Stewart. The fledgling trade association was lobbying over proposals that would have increased taxes on private equity profits. Meanwhile, Cerberus Capital Management, the private equity firm that bought automaker Chrysler last spring, spent $2.5 million on in-house lobbying efforts over fuel economy standards and greenhouse gas tailpipe emissions from cars and trucks. The firm has also hired K Street firms to lobby on the issue. Year-end reports available so far show that Cerberus spent an additional $40,000 with Jones, Walker, Waechter, Poitevent, Carr�re & Den�gre; $80,000 with CLMM & Associates; and $110,000 with C&C Associates. Also, the Blackstone Group paid Ogilvy Government Relations $720,000 during the second half of the year, less than the $3.7 million that made headlines at midyear. The Carlyle Group, another private equity company, paid Ogilvy $280,000. — Carrie Levine
No Napping There’s been plenty of speculation about Sen. Ted Stevens (R-Alaska) since the FBI raided his Girdwood, Alaska, home last year, but one thing the senator can’t be accused of is running away from a fight. Just a week after the Anchorage Daily News published a 2,600-word expos� of a Stevens earmark that was “engineered” to help a lobbyist and former staff member, he celebrated recent Alaskan earmarks in his constituent newsletter. Arctic research and an outdoor youth camp both received federal dollars, as did the University of Alaska at Fairbanks’ study into the genetic basis of the hibernation of Alaskan ground squirrels. In a video accompanying the newsletter, university lobbyist Martha Stewart says the research could one day help Army medics put wounded American soldiers into a state of semi-hibernation. The university is an ideal home for the research, she says: “We have a number of ground squirrels that are in various stages of hibernation in Fairbanks.” — Jeff Horwitz

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