After attacking hedge funds and their managers during her tenure in the Obama administration, former White House communications director Anita Dunn is being touted as a public relations consultant to improve the industry's image, according to a secret proposal obtained by the Washington Free Beacon.
Dunn, currently a managing director at the Democratic consulting firm SKDKnickerbocker (SKDK), is being promoted by the public relations firm McLean/Clark LLC as a director of "paid media" for a pro-hedge-fund campaign. The project is described by promotional material as a "comprehensive public affairs operation" to "raise awareness about the positive role hedge funds play in the American economy" and to "eliminate the need for politicians to take aim at hedge funds."
As White House communications director, Dunn helped President Obama criticize hedge funds as a key factor of the financial collapse—and she has continued that criticism, at least in public, ever since.
An industry outsider who was pitched on McLean/Clark’s proposal told the Washington Free Beacon that he was surprised to see the former Obama official involved in the effort. "First we see Dunn attack us on television," he said, "and then she tells us to hire her to head off the exact attacks that she herself is hurling at us. The entire thing begins to stink like a protection racket."
McLean/Clark’s promotional packet for their campaign, entitled "Hedge Funds and a New Vision for Public Affairs," was sent to hedge-fund professionals. According to the packet, the campaign seeks to counteract the damage that the media and politicians have done to the hedge-fund industry in the public discourse.
McLean/Clark claims they will employ an unprecedented media strategy forcing state and federal politicians to "think twice" about attacking hedge funds, and will provide lawmakers "political cover" for defending the hedge-fund industry. Dunn’s headshot is prominently featured on the list of principals for McLean/Clark’s project.
McLean/Clark senior partner Joe McLean confirms that his firm has been "talking to some people" and that he's had "some interest from hedge funds," but claims that McLean/Clark has no contract currently in place to do promotional work for any hedge fund.
Dunn did not return calls for comment. Her assistant at SKDK, Tim Boyle, said, "Look, I'm not giving any answer to any question to you whatsoever on this topic." SKDK then wrote a subsequent email to the Beacon that said, "SKDK is not currently working with McLean Clark on any projects."
Recently, Politico reported on a new PR campaign called "Private Equity at Work," launched by a private equity trade association, the Private Equity Growth Capital Council, and designed to "mitigate the damage and improve the industry's image" in the face of attacks by President Obama’s re-election campaign and Democrats on the Hill. It is not clear whether Dunn or SKDK are involved in the effort.
Politicians are not Dunn’s only targets: The packet also bemoans the damage Occupy Wall Street has caused to the hedge fund industry. "Closer to home, both the leftist Occupy Wall Street activists and the right-wing Tea Party movement herald a new era of populist peril for anyone associated with finance. Given current U.S. volatility, various measures of a similarly reactionary nature might very well attract strong political support. … Hedge funds make inviting targets."
Dunn has been a public supporter of Occupy Wall Street and its economic message. In a November 2011 MSNBC appearance, Dunn criticized public-relations efforts to undermine the Occupy movement, voiced her support for increased government regulation of Wall Street, and favorably referred to a New York Times story criticizing hedge fund managers John Paulson and Kenneth Griffin.
During Dunn’s 2009 tenure as White House communications director, the Obama administration introduced the Private Fund Investment Advisers Registration Act, which increased federal government regulations on hedge-fund advisers. On Apr. 30, 2009, the day Dunn assumed her role as interim communications director in the administration, Obama delivered a speech criticizing hedge funds for rejecting Chrysler’s debt-reduction plan and blaming them for Chrysler’s bankruptcy. Obama declared, "While many [Chrysler] stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices and they would have to make none."
Dunn remains a frequent visitor to the White House, where her husband Robert Bauer, Obama's former personal attorney, served as White House Counsel until June 2011.
Dunn’s new consulting project comes just over a year after one of her Obama administration colleagues, former Office of Management and Budget director Peter Orszag, also accepted a prominent position in an industry the president has targeted. In December 2010, Orszag took a job as vice chairman in global banking at Citigroup, a company that Obama once tried to dissolve. Current White House chief of staff Jack Lew previously worked for Citigroup, where the Alternative Investments unit he ran was ranked globally as a top "fund of hedge funds" and invested in a hedge fund managed by Paulson. Current acting director of the Office of Management and Budget Jeffrey Zients previously worked for Bain & Company, a business consulting firm tied to GOP presidential candidate Mitt Romney. Meanwhile, former White House press secretary Robert Gibbs, now a paid consultant on President Obama’s re-election campaign, is being paid to speak at an annual conference of hedge fund managers this May.
Dunn’s fellow managing director at SKDK, Hilary B. Rosen, sits on the board of the Center for American Progress Action Fund, which along with sister organization the Center for American Progress (CAP), has been a relentless critic of the hedge fund industry. This, despite the fact that Thomas Steyer, who sits on CAP’s board, runs Farallon Capital Management, one of the largest hedge funds in the country. Rosen formerly worked for the communications consultancy partnership Brunswick Group LLC, which advises hedge funds. McLean/Clark’s proposal did not mention Rosen. However, the head of SKDK’s New York office, Josh Isay, is listed in the proposal alongside Dunn.
Updated February 14, 4:18 p.m.