Hedge funds: “Yes, we really can!”

For a man who used “Joe the hedge fund manager” as a spur against his opponent, Barack Obama’s first major political appointment is certainly perplexing.

From Finalternatives (and yes, they’ve spelled Rahm Emanuel’s name wrong):

Rep. Rahm Emmanuel (D-Ill.) accepted the Illinois senator’s offer to become his chief of staff when the Obama administration begins on Jan. 20 yesterday. Emmanuel, who served as a staff in Bill Clinton’s White House before winning election to Congress, representing part of Chicago, sponsored a bill that would have prevented hedge fund managers from deferring taxes on offshore compensation. Despite his sponsorship of that measure, Emmanuel was popular among alternative investment firm employees: According to the Center for Responsive Politics, Emmanuel was the largest recipient of donations from workers at hedge fund and private equity firms this election cycle.

While he backed the effort to close the deferred compensation loophole, Emmanuel was not as gung-ho as some of his colleagues when it came to raising taxes on the alternatives industry. He opposed closing the so-called ‘carried interest’ loophole, even writing a memo offering several options to keep it.

And Emanuel worked at Wasserstein Perella (now part of Dresdner), earning some $16.2m in his three years as managing director. He also, err, served as a director of Freddie Mac – the troubled US mortgager and recipient of about $100bn in government-sponsored bailout largesse.

Guess those hedge fund donations are paying off – no matter what the campaign slogans were.

Related links:
Hedge funds: “Yes, we can!” – FT Alphaville
‘Absolute enforcer’ Emanuel given big role by Obama – Bloomberg
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