Wednesday, January 19, 2011

Bail Them Out, Regulate Them, Then Work for Them

Tim Carney explains the D.C. revolving door. Here are some excerpts:
In the summer of 2008, Senate banking committee chief counsel Amy Friend helped bail out Bank of America and the rest of the mortgage industry. A couple months later, Friend helped craft the Great Wall Street Bailout. After that, she helped her boss, Sen. Chris Dodd, D-Conn., pass a sweeping financial regulation bill.

On Tuesday, Friend started her new job on K Street as managing director at Promontory Financial Group, the self-described "premier global financial services consulting firm," to work with clients on "the regulatory implementation of the Dodd-Frank," according to the firm's press release...

Friend worked for Democrats Chuck Schumer and Rosa DeLauro before serving under the Comptroller of the Currency in the Clinton and Bush administrations. In 2008 Dodd hired her as chief counsel for the banking committee.

Dodd, on the Senate floor, thanked Friend by name repeatedly for her work crafting the 2010 financial regulation bill. After Dodd retired, Friend went to K Street. She may not register as a lobbyist, but instead consult with clients and prepare regulatory filings.

There are two types of people on K Street: access people, who can get you in the door; and policy people, who know what's on every page of every relevant bill and regulation. Friend is the latter. While business will dry up for other Dodd alumni on K Street, Friend is valuable because -- to quote one Republican lobbyist -- "she knows what's on page twenty-three-[bleep]ing-hundred of that bill," and every other page, too.

In other words, Friend didn't just write a landmark piece of legislation -- she wrote her meal ticket...

Friend's personal financial situation has blended murkily with her public service before. Bloomberg reporter Robert Schmidt wrote last year about her investments in banking and real estate stocks during the Year of Bailouts, 2008.

Two weeks before a Dodd-sponsored bailout of Fannie Mae passed the Senate, Friend purchased debt in the GSE. She invested tens of thousands of dollars in bonds from the Federal Home Loan Bank Board, including purchases in June, when Dodd was pushing a housing bailout. Her 2008 investments included bailout barons AIG, Freddie Mac, Bank of America (which bought subprime king and Dodd benefactor Countrywide that year), Wells Fargo, and mortgage insurer MGIC...

The story of Friend's cashout is not about her, but about how regulation and bailouts breed lobbyists.

A recent Politico article documented a handful of Obama officials who cashed out on K Street, despite Obama's continued rhetoric about stopping the revolving door.


  1. Tim Carney has just earned his meal ticket with this one. Or at least, a beer or two. You tell that guy that the next time we are in the same zip code I am buying him a drink.

    We need more Tim Carney's out there simply exposing how this crap shitstem works. It literally has to be seen to be believed. And once it's seen, it's damn near impossible to continue defending it.

    When there's no one left to defend it, we can walk inside the gates unobstructed and tear it down.

  2. But of course, this is nothing that better regulation can't solve.

    Or perhaps we just need more honest regulators.

  3. The mentally retarded majority will always vote for criminal psychopaths like Obama because the filthy animals promise to steal for them. They are too stupid to figure out that their own lives are being destroyed.