Today, the Center for Responsive Politics and Public Citizen jointly released a mammoth report on the “small army” of former federal employees lobbying on financial regulatory reform. “Banking on Reform” finds that a whopping 1,447 former Hill or administration staffers are on the job.
Familiar names include former Senate majority leaders Bob Dole (R-Kans.) and Trent Lott (R-Miss.); former House majority leader Dick Gephardt (D-Mo.); former Speaker of the House Dennis Hastert (R-Ill.); and former Rep. Michael Oxley (R-Ohio), the coauthor of the Sarbanes-Oxley Act. All in all, 17 former members of the House or Senate banking committees are lobbying on behalf of financial industry clients, and 73 former members of Congress total — plus 66 banking committee staffers, 82 other Hill employees, 42 alumni of the Treasury Department and seven former staffers of the Office of the Comptroller of the Currency, the bank regulator. The companies that hired the most federal government alumni as lobbyists in 2009 and 2010 are: Citigroup (60), Visa (50), the American Bankers Association (49), Prudential (47) and Goldman Sachs (47).
From the press release:
“Wall Street hires former members of Congress and their staff for a reason,” said David Arkush, director of Public Citizen’s Congress Watch division. “These people are influential because they have personal relationships with current members and staff. It’s hard to say no to your friends, but that’s what Congress needs to do. Listening to them would result in a bill that would fail to get the job done and would disappoint the American people.”
Added Sheila Krumholz, executive director of the Center for Responsive Politics, “Companies pay a premium for lobbyists who’ve spun through the revolving door because it can be a small price to pay relative to the huge payoff if they can shape legislation. These lobbyists tap insider knowledge and personal relationships, knowing that their old friends and former co-workers won’t want to let them down.”
On one hand, this is old news. Wall Street banks have a lot of money and ample incentive to persuade Congress to water down legislation, particularly by enacting loophole-ridden provisions. On the other, it goes to show how successful this bill might be in spite of all the lobbying — particularly if bank-unfriendly provisions such as the Merkley-Levin Volcker Rule and Lincoln’s derivatives language make it in.