From Washington to Wall Street: lawmakers regulate banks, then flock to them
Representative Barney Frank publicly rebuked a former aide this month for taking a job with a big Wall Street firm right after drafting a regulation that could affect the way the firm does business.business Updated: Apr 14, 2010 22:10 IST
Representative Barney Frank publicly rebuked a former aide this month for taking a job with a big Wall Street firm right after drafting a regulation that could affect the way the firm does business. Frank described it as an unusual transgression, one that embarrassed others working on the legislation and created at least the appearance of a conflict of interest.
But while the speed of the aide’s switch from government to Wall Street was extraordinary, it reflected reality as Congress takes on an overhaul of the system of regulating financial giants:
An analysis by Public Citizen found that at least 70 former members of Congress were lobbying for Wall Street and the financial services sector last year, including two former Senate majority leaders (Trent Lott and Bob Dole), two former House majority leaders (Richard A. Gephardt and Dick Armey) and a former House speaker (J. Dennis Hastert).
In addition to the lawmakers, data from the Center for Responsive Politics counted 56 former Congressional aides on banking committees who went on to use their expertise to lobby for the financial sector.
Visa had the most former Congressional officials, with 37 lobbyists; it was followed closely by Goldman Sachs, Prudential, Citigroup and the American Bankers Association, according to the analysis from Public Citizen. One former representative, Michael G. Oxley, the Ohio Republican whose name is on one of the most famous pieces of business regulatory legislation, is a senior adviser to the Nasdaq.
The legislation, the Sarbanes-Oxley Act of 2002, imposed tougher accounting measures on firms after scandals at Enron and other companies.
Oxley received $40,000 in the last quarter of 2009 for lobbying to limit the ownership of banks and other competitors in clearinghouses.