Revolving Door Moves Fast Between Congressional Committees and Financial Institutions
Among the armies of well-heeled lobbyists pressuring Congress on the size and structure of the financial bailout this week are a number of familiar faces. CBS News found 21 former staffers from the Senate Banking, Housing and Urban Affairs and House Financial Services Committees are now lobbyists for financial firms. Their job? To lobby those in Congress who will shape the financial bailout. The former staffers now represent hedge funds, private equity firms, investment banks and the failed mortgage giants Fannie Mae and Freddie Mac.
Senate rules prevent former senior staffers from lobbying their old committees for one year.
It's well known on Capitol Hill that a few years on a Congressional oversight committee can be cashed in for a lucrative K Street job, sometimes garnering up to $20,000 a month for a lobbying job. But the connection between the oversight committees and the companies they sought to rein in is striking.
A number of the staffers lobbied for Fannie Mae or Freddie Mac since leaving Congress. The two mortgage giants have been told by their new oversight agency to suspend their lobbying activities in light of the government bailout. Over the last decade the Center for Responsive Politics notes the two companies spent $20 million on lobbying and political donations in part to resist regulation and stronger oversight.
Here's just a few former Capitol Hill staffers turned lobbyists and what they have been doing since leaving their Congressional jobs according to records on the Legistorm website and Senate records:
Douglas Nappi has taken a few tours on both K Street and the Hill according to lobbying records. In 1999 he registered as a lobbyist for the New York Stock Exchange but notes his previous job was as "former counsel to the Senate Banking Committee." From 2003 through 2005, Nappi served as the Republican chief counsel of the Senate Banking Committee according to Legistorm. Senate records show Nappi left the committee in early September 2005 and filed his first lobbying report less than three weeks later. Recently he lobbied for Freddie Mac and the Financial Industry Regulatory Authority as well as Clayton Holdings described on its website as "an information and analytics company serving lenders, loan buyers and bond issuers, servicers and fixed income investors in mortgage-related loans and other debt instruments."
Alexander Sternhell left his job as the Democratic Deputy Staff Director for the Senate Banking Committee in late December, 2007 and registered as a lobbyist a few days later representing clients such as Freddie Mac, Citigroup, Capmark Finance and Wachovia. Sternhell is now lobbying with a three person team which has already garnered $480,000 for their work in 2008 according to Senate records. Sternhell tells CBS News he is lobbying on the financial bailout "where appropriate." While he is not permitted to lobby his former committee yet, he is free to lobby other members of Congress and all other Congressional committees.
Kristi Kennedy worked as the Legislative Director for Senator Paul Sarbanes (D-MD) from 1999 through 2006. Sarbanes was one of the authors of the financial reform legislation known as Sarbanes-Oxley Act which is despised by many in the financial world. When Sarbanes left Congress, Kennedy did too. Within two months, Kennedy filed her first lobbying report according to Senate records and began lobbying for: Fannie Mae, the Financial Services Forum, Citigroup and Managed Funds Association according to Senate lobbying records. Today she says she is lobbying on the financial bailout package.
Lobbying reform advocates say the speed with which Hill staffers trade in their oversight responsibilities for lobbying jobs and press their new agenda with their former colleagues is troublesome.
"There should be a three year cooling off period so former staffers do not have these intimate relationships that they exploit for large paychecks," says Joan Claybrook, president of Public Citizen who has actively pushed for more lobbying transparency and accountability.
One former banking committee staffer also found his way to a presidential campaign.
John Green was the Deputy Chief Clerk at the Senate Banking Committee until he left in 2004 to lobby for clients such AIG, Fannie Mae, Credit Suisse, AIG's private equity investment partnership called Highstar Capital, Citigroup, Ameriquest Mortgage and dozens of other companies according to Senate records. In July, Green's clients notified the Senate that he was no longer their registered lobbyist. His new job? According to Congressional Quarterly, he's serving as a Congressional liaison for presidential candidate John McCain.
By Laura Strickler