WASHINGTON — When money manager Bernard L. Madoff was arrested in New York recently for allegedly engineering a massive Ponzi scheme, Wall Street financiers were left slack-jawed at the unmasking of an establishment figure who seemed to be an unlikely fraud.
The reaction was similar among many politicians in Washington. For years, Madoff was a generous donor to mostly Democratic causes and maintained a steady lobbying presence through the government relations firm of a former New York congressman.
Still, despite spending more than $900,000 on lobbying fees and campaign contributions over the last decade, Madoff maintained a low profile in the capital.
"Until this thing blew up, I didn't even know who he was," said former Rep. Richard Baker (R-La.), who chaired a House banking subcommittee for 12 years, through 2006, that considered issues important to Madoff.
"It's a bit odd," Baker said. "I was a big player on market data fees and electronic exchanges" -- two of the issues on which Madoff's lobbying firm, Lent Scrivner & Roth, listed as advocating. "I don't remember having a visit or a discussion on these matters with the firm."
Few of Madoff's political beneficiaries want to talk about the New York money manager for fear of being tied to his legal problems. But one former Democratic fundraiser who asked not to be identified said the political community that knew him was shocked by his arrest because Madoff, a former chairman of Nasdaq, was known for his expertise as well as his deep pockets.
"People saw him not just as a source of money but also as a source of financial information," the fundraiser said. "People saw him as a real guru of finance."
Madoff was arrested Dec. 11 and charged with running a fraudulent investment business that ruined investors across the country, including hedge funds, wealthy individuals and charities. The losses involved could run to $50 billion.
Since 1999, Madoff spent at least $540,000 for lobbying by the Lent Scrivner firm. By Washington standards, his lobbying expenditures would be considered significant but not outlandish for an enterprise of Bernard L. Madoff Investment Securities' apparent size.
Madoff also occasionally testified before or gave advice to congressional committees about financial matters.
Madoff, his wife and individuals at his company gave $392,900 to federal candidates, parties and committees since 1998, with 89% going to Democrats, according to a Times analysis. Fully $238,200 of that total came from Madoff and his wife alone.
