The Investment Company Institute spends $30 million each year just to lobby in Washington, and the lobbying group’s recent declaration that shareholder’s costs have dropped substantially since 1980 is just the latest example, according to a column.

Quoting Gordon Gekko’s line, "Greed is good!" from the movie "Wall Street," Paul Farrell writes that the ICI’s study is "misleading and discredited" at a time of peril for the mutual fund industry.

By using its own invented "total shareholder cost" formula rather than the widely accepted "expense ratio" system, the ICI, through in-house economist Brian Reid’s study, was able to state that "the actual costs borne by average stock mutual fund shareholders has dropped 45% since 1980." But according to John Freeman, an author of a report about fund expenses who testified at recent Senate hearings on the topic, expense ratios at fund companies not named rose an average of 50% from 1980 to 2002.

Freeman is not the only one who is skeptical of the ICI’s rosy assessment of the fund industry. Republican Sen. Peter Fitzgerald of Illinois is quoted by Farrell as saying, "The fund industry is the world's largest skimming organization." It is a quote that has been widely cited.

However, ICI President Matt Fink said at the Jan. 8 Greater Cincinnati Mutual Fund Association conference that his group only spends $750,000 of political action money per year.

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