Revolving door between D.C. and Wall Street must be closed
Most people following the financial crisis were troubled by the revolving door between Washington, D.C. and Wall Street. In recent years, through both Republican and Democratic administrations, top Treasury officials and White House advisers were often former Wall Street insiders. And when these people, who pushed for Wall Street-friendly bailouts, return to their bank jobs, they have even more connections in Washington.
As disturbing as the Washington-to-Wall Street connection is, there is an even more troubling revolving door — the one between Congress and K Street, the home of lobbyists.
A recent report by a Washington, D.C., publication listing the top-10 lobbyists included four former members of Congress. The Center for Responsive Politics reports that 370 former members of Congress sell their influence in Washington, but only 285 are registered as lobbyists. The others, presumably like Republican presidential candidate and former Speaker of the House Newt Gingrich, just provide “strategic advice.”
Four from the top-10 list are former Democratic lawmakers. Given that, the New York Times noted, “For Obama and Democratic leaders who are trying to set an agenda focused on income inequality, wage stagnation and downward mobility for the middle and lower class, the prominence of Democratic lobbyists has become problematic.”
Former Democratic House Majority Leader Richard Gephardt is on the top-10 list. His firm now bills about $6.6 million a year and works on behalf of clients such as investment bank Goldman Sachs, Boeing Co., Visa Inc. and Waste Management.
Another lawmaker-turned-lobbyist, Republican Billy Tauzin, topped the list of moneymakers, earning $11.5 million as head of the Pharmaceutical Research and Manufacturers of America. No doubt Tauzin, who represented Louisiana, made sure his constituents made out well in the health care reform legislation of 2010.
Beyond the corrupting influence of lobbyists with such rich networks of contacts, there is another problem created by the Congress-to-K Street connection. Given the huge amounts of money to be made by former lawmakers working for corporate interests, it’s likely that some current lawmakers are already careful not to offend potential clients, thinking about leaving public service for lobbying.
Asked about Gebhardt’s new career, a liberal-leaning political strategist who worked on Gebhardt’s campaigns in Congress said, “I don’t want to talk on the record; it sucks. It’s a sad situation for us.”
He’s right. Despite generous salaries and unmatched fringe benefits, members of Congress sometimes treat their time in Washington as a steppingstone to the good life, making millions of dollars as a lobbyist.
The latest analysis of wealth in Congress found that 47 percent of House members are millionaires, and 67 percent of senators are millionaires. Some lawmakers arrive as millionaires, but more will see their net worth rise dramatically during their time in Congress.
Another factor in congressional wealth could be the fact, recently making news after an expose on the “60 Minutes” television show, that members of Congress are exempt from insider-trading laws. That means members of Congress can, and often do, make stock trades based on information they hear in committees or closed-door meetings. That information, which is generally not available to the public, could be behind the fact that members of Congress see their stock portfolios grow at about twice the rate of return of average investors.
For real change, it’s time to end the revolving door between Wall Street and Washington, have all members of Congress put their investments in blind trusts, and prohibit former lawmakers from becoming lobbyists forever, or for at least 10 years.
Such restrictions will never happen because the very people who would be required to make the changes are already too much part of the status quo.