Hedge funds have emerged as a force in New York state politics in the past seven years, funneling tens of millions of dollars to political parties, pet causes and candidates from both major parties, according to a report set to be released on Wednesday.
The donations have swelled as hedge funds grow in number and wealth. In 2006, when Eliot Spitzer was elected governor, hedge-fund executives, employees and their families gave $4.1 million to New York state and local candidates and political committees. In 2010, when Gov. Andrew Cuomo was elected, that number rose 73.5%, to $7.1 million, according to the report by Common Cause New York, a group that advocates for a campaign finance overhaul, among other issues.
Hedge-fund political giving still lags behind New York’s traditional power players such as labor unions and the real-estate industry. And, unlike those special interests, hedge-fund executives don’t appear to have a clear agenda designed to benefit their businesses. Instead, they have funded causes such as the successful legalization of gay marriage in 2011 and promoting charter schools, which have seen their numbers rise.
“What distinguishes the hedge-fund industry from a more traditional large giver like the real-estate industry is the extraordinary amount of money that individuals in the hedge-fund industry have,” said Susan Lerner, Common Cause New York’s executive director. “What we see is an aggressive willingness to use their money to influence public policy in whatever way appeals to them personally.”
The report is being released as Common Cause and other similar groups begin a push to convince lawmakers and Mr. Cuomo, a Democrat, to impose lower limits on campaign contributions and create a public funding system for state campaigns similar to New York City’s.
The rise of hedge funds in New York comes as they increasingly flex their muscles on the federal level, where they are regulated.