The Wall Street Journal-20080116-Politics -amp- Economics- Baker to Leave Congress For Hedge-Fund Group
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Politics & Economics: Baker to Leave Congress For Hedge-Fund Group
WASHINGTON -- The hedge-fund industry, under siege in Congress, snagged a high-profile advocate: Rep. Richard Baker, a top Republican on the House Financial Services Committee.
Mr. Baker said he will resign from Congress by Feb. 6 to become the president and chief executive of the Managed Funds Association, the main trade association representing hedge funds. Mr. Baker has represented his Baton Rouge, La., district since 1987.
Mr. Baker comes to the association at a challenging time, as Democrats contemplate tax and regulatory changes that would affect the hedge funds. Hedge funds haven't had a strong presence in Washington and only recently ramped up lobbying in response to the new scrutiny.
While in Congress, Mr. Baker, 59 years old, has worked on financial- services regulation. From 2001-06, he chaired the Capital Markets, Insurance and Government-Sponsored Enterprises subcommittee, and was a vocal proponent of overhauling Fannie Mae and Freddie Mac. He worked on housing and flood-insurance issues to help Louisiana after Hurricane Katrina. Twice he tried to win the chairmanship of House Financial Services, but lost.
He commonly has had easy races for re-election, but might have faced a tougher contest this year. A special election will be held to fill the vacancy, and he predicted that Democrats "are not going to cede this seat without a fight."
Mr. Baker said while he remains in Congress he would avoid voting on matters that "can be shown to have detrimental or positive effects" on hedge funds. From Feb. 7, when he officially starts at the Washington trade association, he will be subject to a House ethics requirement for a one-year "cooling-off period" during which he can't lobby lawmakers or aides in the House or Senate on hedge funds' behalf.
Mr. Baker said he has been a "very strong and outspoken advocate for more transparency" in the hedge-fund sector, "although I am a very committed, free-market person." Mr. Baker said an executive-search firm approached him about the hedge-fund job in early December. "I have some abilities the market would find of value. I have been in elective service for 37 years. My wife said maybe it's time to try something else," Mr. Baker said. "It's an opportunity that knocked on the door." He declined to say what he would be paid.
