The Politico reports how the hedge fund industry, fearing an upcoming fight with Congress will put a dent into their eye-popping profits, is seriously beefing up its Washington influence operation after years of maintaining a low-key presence.  Earlier this year, the Managed Funds Association, the industry’s voice in Washington, lured U.S. Rep. Richard Baker to resign from Congress, where he served on the House Financial Services Committee, to lead their defense. The Congress has targeted the industry’s tax free, off shore accounts, as well as raising taxes on “carried interest,” the multimillion-dollar incomes hedge fund managers receive.

The association formed in 1991, but kept a low profile for most of its 17-years in Washington. The industry and its profits have grown “exponentially” as The Politico reports, with the association growing as well, going from 750 members five years ago to 1,600 today.  In the last couple of years the money the hedge fund industry spent on lobbying and campaign contributions to congressional candidates has skyrocketed, according the data from the Center for Responsive Politics. So far in the 2008 election cycle, the industry’s total contributions have shot up over 128 percent over the last cycle, going from $4.95 million during the 2006 cycle to over $11.3 million this cycle.  When it comes to lobbying expenditures, the industry’s increase has been just over 400 percent this cycle, ($8.4 million) over last ($1.6 million).

Hedge fund industry to Congress: “Do you hear me now?”