Weighing the Options a N D Ke N N E T H P

VOL. 4 NO. 42 POLITITUESDAY, APRIL 13, 2010 CO WWW.PolITICO.COM H e d g e F u n d Critics Say Managers Crony Hires Invest in Hurt RNC AP PHOTOS Judge Merrick Garland, Solicitor General Elena Kagan and Judge Diane Wood Steele allies replace Congress experienced hands Ten richest give nearly BY JEANNE CUMMINGS $1M to campaigns Weighing the Options AND KENNETH P. VOGEL W.H. nixes Clinton, dims Dem plan: Paint GOP In a weekend appearance at BY MANU RA J U the Southern Republican Leader- hope for nonjudge pick judges as judicial activists ship Conference, Michael Steele John Paulson, one of the world’s tried to put recent criticism of his richest hedge fund managers, has BY BEN SMITH BY GLENN TH R USH stewardship of the Republican not been shy about spreading his National Committee behind him wealth to Senate campaign cof- The White House on Monday hurriedly Democrats hope to turn the upcoming by acknowledging: “I’ve made fers — or to the chairman of the punctured the trial balloon that had Sec- Supreme Court confirmation hearings mistakes.” committee that could directly af- retary of State Hillary Clinton heading to into a referendum of sorts on controver- In the view of his critics, fect his bottom line. the Supreme Court and, in the process, sial recent decisions by the Roberts court those mistakes began soon after Paulson held a ritzy $1,000-per- dealt another blow to the fading American — portraying the conservative majority Steele’s arrival at the RNC, when head fundraiser for Senate Bank- tradition of appointing prominent public as a judicial Goliath trampling the rights he bragged he was going to clean ing Committee Chairman Chris figures to the court. of average Americans. house, pushing out many old Dodd last year — and then maxed Since Justice Sandra Day O’Connor’s As President Barack Obama mulls pos- hands and replacing them with out his donation with $4,800 more retirement in 2005, the Supreme Court has sible replacements for retiring Justice his own political allies. They see for the Connecticut Democrat’s for the first time in history been without John Paul Stevens, the administration and the departure of some of the com- now-aborted reelection run. a single member who ever ran for elected congressional aides are framing the con- mittee’s most experienced profes- Paulson is hardly alone. office. Where the bench once included for- flict as a corporations-vs.-the-common- sionals as a major reason the RNC According to a review of Feder- mer governors, senators and even a for- man battle between Democrats and the is now reeling from a series of em- al Election Commission records, mer president — William Howard Taft — high court. barrassing financial disclosures, the nation’s 10 richest hedge fund it’s now made up of career legal scholars In addition to building a defensive including a payment to a bondage- managers have dumped nearly $1 themed club in West Hollywood. million into campaign accounts See CLinTON on Page 21 See SCOTUS on Page 20 And even now, as Steele imple- over the past several years — ments another shake-up in per- with much of it going to senators sonnel, these critics are skeptical who’ve given them a friendly re- that real change will come be- ception on Capitol Hill. cause, in their view, he is simply And despite all the tough replacing one set of close political talk about a crackdown on Wall allies with another set of opera- Street, consumer advocates and tives tied to his days as Maryland critics from other financial sec- lieutenant governor and unsuc- tors say hedge funds would get cessful Senate candidate. off pretty easily under the regula- His new chief of staff charged tory reform bill Dodd’s committee with cleaning up the mess, for ex- approved last month — a charge ample, is Mike Leavitt, the cam- Dodd’s aides reject. paign manager for Steele’s losing Many hedge funds enjoyed race in 2006 against Democrat an enormously profitable year Ben Cardin and a former senior in 2009, in part because of good AP aide in the Maryland Republican bets that federal dollars would be Party. used to rescue “too-big-to-fail” fi- Steele’s choice as his special nancial institutions. And the Top assistant for finance was another 25 earners made more than $25 longtime ally, Neil Alpert, who the billion last year, according to a rival Democratic National Com- recently released survey by Abso- lute Return + Alpha magazine. See rnc on Page 24 Those Top 25 feature some familiar names in Capitol Hill’s fundraising quarters, including liberal investor George Soros, Pennsylvania Dems Feud Over Seat who earned $3.3 billion last year and has dropped $42,000 of his BY JONATHAN ALLEN against each other for the seat. sor to the Democratic Steering cash into Democratic campaigns Second-term Rep. Chris Car- Committee, which hands out in the past few years. A vicious internal brawl over ney is accusing 25-year veteran committee assignments. Other Top 25 managers have the late Rep. John Murtha’s Appro- Paul Kanjorski, who represents a There’s no guarantee that the hedged their bets, in some cases priations seat has thrown a pair of neighboring northeastern Penn- Pennsylvanians’ choice will get making contributions to candi- politically vulnerable Pennsylva- sylvania district, of stabbing him the seat, but the vote triggered dates. nia Democrats into open warfare in the back by voting for Rep. Pat- a maelstrom within and out- For instance, Carl Icahn of and threatens to leave each man rick Murphy when the Pennsylva- side the delegation. Even House AP weaker in the eyes of voters. nia delegation used secret ballots See HEDGE on Page 23 Rep. John Murtha (D-Pa.) And they weren’t even running to recommend a Murtha succes- See MURTHA on Page 18 INSIDE CONGRESS HEALTH CARE POLITICS Joe CLICK Lockhart Is Charles Lollar the Republicans’ Health Care for America Now GOP says Supreme Court pick will Bash at Lockhart residence added to “Maryland miracle”? repositions for tomorrow. tip the scales in its favor in races. GETTY IMAGES the mix for “prom” weekend. PAGE 6 PAGE 11 PAGE 15 PAGE 35.

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