Battered and Bruised by Foreclosures Wall Street Had to Pay for Inauguration Splendour

February 3rd, 2009 | Tags: Foreclosures

Despite the recession the champagne flowed freely on 20th January – the great inauguration day of President Barack Obama. Battered and bruised by foreclosures, Wall Street had to pay for inauguration splendour. It was the donors of Wall Street who had to foot the bill.

Till now the Presidential Inauguration Committee has disclosed $27 million in donations. The estimate is $45 million. It makes the celebration a record inauguration ever. The amount is exclusive of the $124 million the governments at the local, state and federal levels have had to pay towards security and the official swearing-in function.

No money was taken by the Obama administration from unions, lobbyists, corporations or political action committees to fund the inauguration bash. Understandably it had to take the help of Bill Clinton to reach out to the rich – mainly from the troubled finance industry. The maximum permitted amount per individual was $50,000.

Among these were George Soros – a noted former manager of hedge funds and four members of his family. Their total donation amounted to $250,000. Ray McGuire was another donor of Citigroup – the latter being a beleaguered banking giant that had received a hefty amount from the government as help towards the close of 2008. According to records Ronald O. Perelman who made his fortune fixing company takeovers contributed $50,000. Founder of hedge fund D.E. Shaw & Company, David Shaw and his wife Beth (business writer) jointly gave $100,000. Another contributor was Ronald Insana former anchorman of CNBC. Other names connected with Hedge funds are Stephen Malkin and Michael Saks (Grosvenor Capital Management), Aaron Braun (Willow Creek Capital Management), Donald Sussman (Paloma Partners), Michael Messner (Simonole Capital Partners), Frank Brosen (Taconic Capital Advisors) and Howard Marks (Oaktree Capital Management).

The hedge fund heavy weights have made their presence felt in the inauguration bash. President Barack Obama’s nominee as leader of the Securities and Exchange Commission is Mary Schapiro. Already she has on her agenda the introduction of much tighter regulations for hedge funds. She is waiting for her confirmation to set the ball rolling.

Contributing towards the inauguration celebrations might not spare the hedge fund world from strong scrutiny by Washington. But the jumbo donors were honoured with prize seats in the Tuesday celebrations. By this they got a chance to rub shoulders with the new leaders ushering in an era of change.