Last year, Mr. Steyer also donated $5 million and a huge amount of time to successfully defeat Proposition 23, a ballot initiative that would have suspended California's 2006 climate-change law.
“I think energy is the key issue for our country,” Mr. Steyer said in an interview.
“I am intent on changing how we produce and use energy. It's inevitable. Business needs to execute on this, but policy also needs to change. Business can't determine policy on its own, but we still need to focus on participating in the conversation. I want the U.S. to lead the world's effort toward advanced energy production. If we don't, we will forever be left behind,” he added.
Sometimes, hedge fund managers have been unified by necessity, such as in campaign financing and congressional politics. Their involvement in campaign fundraising has been well documented by the Center for Responsive Politics, Washington, on its website www.opensecrets.org.
Since 1990, hedge fund managers have donated a collective $53.4 million to federal campaigns. Back in 1990, the industry's political campaign donations totaled $123,000; in 2008, they totaled $18.95 million; in 2010, they totaled $11.3 million.
Wealthy industries and their senior executives do not go unnoticed in Washington, said Edward Kutler, a partner at lobbyist Clark & Weinstock Inc., Washington.
“Hedge funds began to attract attention because of their size and importance in the economy. As they grew in size, Washington started to take notice,” Mr. Kutler wrote via e-mail.
“The question of raising taxes on them over ... carried interest was seen both as a way to raise revenue and as a means to get a better handle on this growing sector of Wall Street. With the government facing a severe debt crisis, that hunt for revenue has intensified and hedge funds will continue to be in the cross hairs of the White House and Congress,” said Mr. Kutler.
The hedge fund industry's main professional organization, the Managed Funds Association, Washington, which is celebrating its 20th anniversary this year, has spent the past three years systematically working to move hedge funds out of those cross hairs.
The group's systematic lobbying began in 2008 when Richard H. Baker joined as president and CEO. Mr. Baker had been in Congress for 22 years, served on the House Financial Services Committee and chaired its Capital Markets Subcommittee for 12 of those years.
“When I joined in 2008, I took a snapshot of Congress' view of hedge funds and it was very negative,” Mr. Baker said in an interview. “I had to stress the need for the MFA and hedge fund managers to be more proactive and to open up about what they do. It was no longer possible for hedge fund managers to wall themselves off.”
Mr. Baker said he began to organize a “granular approach to educating congressmen and women about hedge fund operations” in 2009.
Since then, Mr. Baker, other MFA employees and dozens of the group's hedge fund manager members have conducted scores of meetings with key members of Congress or their staffers and with senior officials at every financial regulatory agency.
Even before introduction of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, the MFA supported hedge fund registration, Mr. Baker stressed. “We were for something — not against everything — and we started to send our members in to meet with legislators and regulators. What was pivotal was relationship-building through repeated visits where we provided truthful and helpful information about the role hedge funds play in the markets, in managing pension fund assets, and how they work,” he said.
“What's been clear within the last decade is that hedge funds were becoming a lobby force. They smelled the coffee and began to invest significantly in lobbying and campaigns,” said Michael Beckel, a spokesman for the Center for Responsive Politics. The tab for hedge fund Washington lobbying last year was $6.5 million, according to the CRP.