Andre Francisco from POGO has recently written the following blog post concerning the latest case of revolving door. A former lobbyist for Lockheed Martin moved to politics as a staffer with the Senate Armed Services Committee, influencing big decisions on military contractors.
John Bonsell spent five years as a lobbyist for major military contractors including Lockheed Martin, Boeing and SAIC. His new position puts him in a powerful place in a committee that oversees the defense industry and has considerable power to decide where defense funds are directed.
Before Bonsell, former Lockheed executive and lobbyist Ann Sauer held this very same position. Sauer worked for Lockheed for more than 10 years and was paid well for her work.
The President is expected to nominate a former industry lobbyist, Tom Wheeler, for the role of FCC Chairman. If true, this could turn into a case of regulatory capture. It will also be representative of the revolving door between regulators and the regulated.
He has the rare support of both industry groups and a number of consumer advocates.
Wheeler has served as an informal adviser to Obama in recent years and has been a big fundraiser for his political campaigns. He went into the venture investing business after years at the helm of the National Cable Television Association and then the wireless industry group CTIA.
Ezra Klein at the Washington Post writes about the staffers of a prominent politician, and how his position of authority has lead to his staffers becoming lobbyists:
…the point of hiring Baucus’s former aides isn’t that they can seamlessly insert any language they want into the final legislation. It’s that they have a direct line to Baucus, and to the people around Baucus, and that gives them a huge advantage. The fact is that human beings are more likely to find arguments convincing when they’re coming from friends rather than strangers or enemies.
That’s the key to most of the lobbying in Washington. It’s not about leveraging bribes so much as it’s about leveraging relationships — and that makes it harder to stamp out.
William D. Cohan from Bloomberg.com has recently written an article highlighting the latest case of the revolving door affecting the federal government. Mary Schapiro, former chairman of the Securities and Exchange Commission SEC, will be joining the Promontory Financial Group LLC as a managing director in its Washington office, in charge of its governance and markets practice.
[…] four months after leaving the SEC, Schapiro is joining a firm stuffed to the gills with former government financial-services regulators peddling their knowledge of Washington’s regulatory thicket to the banks and financial-services companies they once oversaw. (Schapiro, remember, also had a swell incoming trip through the revolving door: She previously ran the Financial Industry Regulatory Authority, Wall Street’s self-appointed watchdog, which paid her a bonus of almost $9 million after she left to go to the SEC in 2009.)
About 100 of the 400 Promontory employees are former Washington regulators; some 5 percent, like Ludwig, come from the Office of the Comptroller of the Currency, which regulates all banks with federal bank charters, including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. Last year, the firm hired Julie Williams, the former chief counsel of the OCC. To keep things in the family, the agency hired as Williams’s replacement Amy Friend, a Promontory managing director.
Nick Sorrentino at Against Crony Capitalism writes about a case of the all-too-common revolving door in DC.
Holder’s right hand man, Breuer basically said that though lots of nasty things happened during the crash of 2008 and prior, nothing (for the most part) was illegal. Or, if it was illegal that prosecution was potentially too damaging to financial markets.
Now he’s cashing in, big time, defending the banks he was once charged with pursuing for the American people.
The Project on Government Oversight (POGO) has recently published a comprehensive report about the current cases of: revolving door, conflict of interests and cronyism associated with former employees of the Security and Exchange Commission (SEC) and the corporations they are supposed to regulate. You can read the report as an eBook here.
“A revolving door blurs the lines between one of the nation’s most important regulatory agencies and the interests it regulates. Former employees of the Securities and Exchange Commission (SEC) routinely help corporations try to influence SEC rule-making counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals, and win exemptions from federal law.
The Wall Street Journal has recently reported the recent most serious case of revolving-door between too-big-to-fail banks and the federal government:
There was a time when you had to be successful on Wall Street to become secretary of the Treasury. Now along comes presidential nominee Jack Lew, whose only business credential is a stint at the most troubled too-big-to-fail bank.”
“During the darkest days of the financial crisis Mr. Lew served as the chief operating officer of Citigroup‘s Alternative Investments unit (CAI). […] CAI no longer exists. At the end of Mr. Lew’s first quarter on the job, the unit reported a $358 million loss. Things got much worse after that but Citi stopped breaking out CAI results in its earnings releases. The unit was eventually shuttered and many of its assets were sold.
Joseph F. Doyle has written a recent column for The Salem News, showing the ever increasing deterioration of how citizens perceive their governments. This feeling, the column analyses, comes from the entwine relationship between crony bankers and the government, in revolving door relationships.
“The “revolving door” in our government must be closed, permanently. Financial institutions that are “too big to fail” (or to prosecute) must be broken up. Campaign financial reform is a white-hot must. Most of all, punishment for malfeasance encompassing the government and financial sectors must be sure, swift and draconian.”