Revolving Door/Conflicts Of Interest At Hensarling’s House Financial Services by Allied Progress
How the House Financial Services Committee Has Become an Industry Revolving Door with Many Staffers Either Investing in or Having Taken Junkets from the Financial Industry
This week House Financial Services Committee Chairman Jeb Hensarling (R-TX) will announce his widely anticipated proposal to dismantle key pieces of 2010’s Dodd–Frank Wall Street Reform and Consumer Protection Act, which, among other things, created the Consumer Financial Protection Bureau (CFPB).i
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The financial services industry has spent at least $3.25 billion on campaign contributions, lobbying, and other political efforts to influence Congress since the legislation was signed into law.ii According to the Davis Polk law firm, in the five years since the measure was first enacted, Congress held at least 119 hearings “related to Dodd-Frank” and introduced at least 139 bills “to amend or repeal the Act.”iii
Simply put, Dodd-Frank is cutting into the bottom line of the financial services industry and Hensarling is coming to its rescue. By July 2015, the CFPB (which again, was created by Dodd-Frank) had returned more than $10.8 billion to more than 25 million Americans harmed by illegal practices of the financial industry.iv
It is no surprise that Rep. Hensarling would announce his intentions to gut Dodd-Frank; he has received nearly $5.5 million in campaign contributions from key financial industry interests since 2010.v Furthermore, as this report details, Hensarling’s House Financial Services Committee has become a revolving door with numerous members of his staff either coming from, or leaving to work in, the financial industry.
Further highlighting the blatant conflicts of interest created by significant financial industry campaign contributions to Hensarling since 2010, this report details how many on his staff have investments in the financial services industry or have taken junkets paid for by the industry – the very entities these House Financial Services Committee staffers are charged with overseeing.
House Financial Services / Financial Industry Revolving Door
Mitchell Blavin: From AIG to the Committee to Financial Services Roundtable
Susan Mitchell Blavin was an analyst at the American International Group (AIG) Global Investment group from 2006 to 2008. In 2013 she was a counsel on the U.S. House Financial Services Committee, then lobbied later that same year and in 2014 for the Financial Services Roundtable, which is a major lobbying group for the financial services industry. Since mid-2013 she has also been the Executive Director of Advocates for Insurance Modernization.
Haller: From Goldman Sachs to Committee to Public Affairs for Financial Institutions
Peter Haller was the Vice President of Commodities Compliance at Goldman Sachs from 2005 to 2007, and he was an attorney at Brickfield, Burchette, Ritts & Stone PC from 2008 to 2010, a firm that worked, in part, on mergers and acquisitions and regulatory compliance. From March 2013 to May 2014 Haller was a senior counsel on the U.S. House Financial Services Committee. Since 2014 he has been Managing Member of Hill Strategy LLC, which assists “Financial Institutions and Energy Companies in Communications with Congress, Regulators and the Press.” One of the clients of this firm is IEX Group Inc., which is currently seeking approval to become a registered national securities exchange. Since 2014, has been registered to lobby on the federal level for IEX Group Inc.
Norton: From the Committee to Chamber of Commerce Lobbyist
Travis Norton was a general counsel on the U.S. House Financial Services Committee from January 2013 to February 2015. In 2016 he became the executive director of the Center for Capital Markets Competitiveness. That same year he was registered to lobby for the U.S. Chamber of Commerce on accounting issues and Sarbanes-Oxley.
Turner: From the Committee to Lending Issues Lobbyist
Anne Marie Turner was a senior counsel on the U.S. House Financial Services Committee in 2013. In 2014 she was registered as a federal lobbyist for Wyndham Worldwide Corporation, the Santa Barbara Tax Products Group, and Avalara. Wyndham Worldwide Corporation, in 2014, lobbied on timeshare-related mortgage and other timeshare-related lending issues.
Bartlett Wright: From the Committee to Bank Association Lobbyist
Anna Bartlett Wright was the U.S. House Financial Services Committee operations manager from January 2013 to January 2015. She became the government relations coordinator for the Consumer Bankers Association in January 2015, and has been a registered lobbyist for that organization since 2015.
Blum: From the Committee to Morgan Stanley Smith Barney
Jonathan M. Blum has worked for the U.S. House Financial Services Committee as senior counsel since April 2014. From August 2008 to January 2011 he worked as an insurance analyst at Morgan Stanley Smith Barney, a joint venture from “Citigroup’s Smith Barney unit and Morgan Stanley’s counterpart, as a way to benefit both companies.” It had “the bulk of its Morgan Stanley’s wealth management business, which has nearly 17,000 wealth advisers and $1.7 trillion in assets under management,” making it “one of the biggest such businesses around.”vi
Carapiet: From a Financial Services Group to the Committee
Joseph J. Carapiet has worked as a detailee for the U.S. House Financial Services Committee since 2015. From 2011 to 2014 he worked for Sullivan & Cromwell LLP, which he described as a “financial services group.”
Edgar: From NYSE Euronext to the Committee
Kevin R. Edgar has worked as the Republican Senior Counsel to the U.S. House Financial Services Committee since January 2013. From May 1997 to May 2006 he was Senior Counsel at NYSE Euronext, a holding company considered to be “the world’s leading and most liquid equities exchange group” that was “developed by NYSE Group, Inc. in conjunction with Euronext NV.”vii
Falaschetti: From Corporate Finance Management to the Committee
Dino D. Falaschetti has worked as the Chief Economist for the U.S. House Financial Services Committee since May 2015. From 1988 to 1993 he was the Manager of Corporate Finance for PepsiAmericas Inc., where he “managed a $1 billion money market portfolio, hedged interest rate and currency exposures, and developed valuation analyses for diverse subsidiaries.” From July 2006 to May 2015 he was a special consultant at Economists Incorporated, which consults on “proposed mergers and acquisitions, legal disputes industry regulation, auction design and strategy, transfer pricing and business planning,” for legal counsel, businesses, and trade associations.
Hoskins: From Financial Holding Company to the Committee
Isaac Borden Hoskins has worked as the Member and Coalition Services Coordinator for the U.S. House Financial Services Committee since June 2015. From August 2011 to July 2013 he worked as a mortgage loan originator at the Alabama-based Regions Financial Corporation, a financial holding company.
Jones: From Fannie Mae Lobbyist to the Committee
Clinton C. Jones has worked as Senior Counsel for Rep. Jeb Hensarling on the U.S. House Financial Services Committee since February 2013. From 2007 to 2008 he was a registered lobbyist for and Vice President of Fannie Mae, during which time Fannie Mae spent nearly $10 million on lobbying activities. On his 2013, 2012, and 2011 disclosures, Jones reported owning stock in Fannie Mae.viii
Morgan: From Koch-Funded Groups to the Committee
Halle Katherine Morgan has worked for the U.S. House Financial Services Committee since April 2015. In 2011 she was a summer law clerk at the Institute for Justice, a “libertarian public-interest law firm” that, for a time, received “$350,000 a year in seed money from [Charles Koch’s] private foundation.” She then served as Counsel, Regulatory Litigation, for Cause of Action, which was “a small group of lawyers funded by the Koch network.”ix
Mork: From Anti-Regulation Lobbying Firm to the Committee
Kirsten Mork, the current Deputy Staff Director for the U.S. House Financial Services Committee, has worked for or under Rep. Hensarling since May 2009. From September 2007 to June 2008 she worked as a legislative analyst for the Federal Strategy Group Inc., a lobbying firm that represented the “Coalition Opposed to a Federal Insurance Regulator,” the “Coalition Organized for the Future of Insurance Regulation,” and the First National Bank of Georgia.x
Sisto: From to Financial Industry-Tied Law Firm to the Committee
Brett Sisto has worked as Counsel for the U.S. House Financial Services Committee since 2015. From October 2011 to February 2015 he worked as an associate at Cadwalader, Wickersham & Taft LLP, which provides legal services to “financial and regulatory market participants” and advises clients on “antitrust, capital markets, corporate, energy, financial restructuring, intellectual property litigation, regulatory, securities enforcement, tax and white collar matters.”xi
Staff Investments in Financial Industry
Jones: Invested in Fannie Mae
As previously detailed, Jones has worked as Senior Counsel for Rep. Jeb Hensarling, on the U.S. House Financial Services Committee since February 2013. On his 2013, 2012, and 2011 disclosures, Jones reported owning stock in Fannie Mae.xii
Emerson: Mutual Funds Invested in Financial Services Sector
Jeffrey Wade Emerson has worked as the Deputy Staff Director for Communications for the U.S. House Financial Services Committee since January 2013. Since January 2013 he has reported owning the following mutual funds invested in at least ten percent investment in the financial services sector: Russell Investments Lifepoints Growth Strategy Fund, DFA Tax-Managed US Equity (DTMEX), DFA US Micro-Cap (DFSCX), DFA Tax-Managed International Value (DTMIX, DFA Tax-Managed US Marketwide Value (DTMMX), DFA Tax-Managed US Targeted Value (DTMVX), DFA Emerging Markets Value (DFEVX), DFA International Small Company (DFISX), DFA International Small Cap-Value (DISVX), and DFA Emerging Markets (DFEMX).
McGahn: Mutual Funds Invested in Financial Services Sector
Shannon McGahn worked for Rep. Hensarling between January 2011 and February 2012, and since January 2013 has worked as a staff director for the U.S. House Financial Services Committee. Since 2013 she has reported owning mutual funds from the following institutions that have at least ten percent of their holdings in the financial services sector: T. Rowe Price, Goldman Sachs, and two Hartford Funds.
Skala: Mutual Funds Invested in Financial Services Sector
Edward G. Skala has worked for the U.S. House Financial Services Committee since February 2011. Since he began working for the U.S. House Financial Services Committee, he reported owning the following mutual funds invested in at least ten percent investment in the financial services sector: the American Funds New Perspective 529 Plan, the Vanguard 500 Index Fund IRA, the Vanguard IRA- New York Community Bancorp Inc. Stock. Additionally, Skala has owned stock in New York Community Bancorp Inc.
Financial Industry-Funded Junkets
Clinger: Committee Employee Who Took $6,004 in Industry-Funded Travel
Jim Clinger, from 1995 until 2005, and again since 2007, has worked for the U.S. House Financial Services Committee. He has taken three trips sponsored by the American Bankers Association that cost a total of $4,206, and one trip sponsored by the American Collector Association International that cost $1,798.
Johnson: $475 in Industry-Funded Travel While at the Committee
Brian C. Johnson has worked as Counsel and then Senior Counsel for the U.S. House Financial Services Committee since May 2012. In 2014 he went on a trip sponsored by Bricker & Eckler LLP that cost $475, and spoke at the 2014 Midwest Consumer Financial Services Conference.
Jones: Committee Employee Who Took $7,136 in Industry-Funded Travel
As previously detailed, Jones has worked as Senior Counsel for Rep. Jeb Hensarling, on the U.S. House Financial Services Committee since February 2013. Between 2001 and 2005 Jones went on seven sponsored trips that cost a total of $7,136 and were funded by financial services entities, including Enterprise Community Partners Inc., Local Initiatives Support Corp., Mortgage Bankers Association, Mortgage Insurance Companies of America, National Association of Home Builders, National Low Income Housing Coalition, and Novogradac & Company LLP.
Pinder: Committee Employee Who Took $895.86 in Industry-Funded Travel
Joe Pinder, since 1994, has worked for the U.S. House Financial Services Committee. He has gone on one trip sponsored by the NASDAQ OMX Group Inc., that cost $895.86.
Wood: Committee Employee Who Took $450.50 in Industry-Funded Travel
Bryan Wood has worked as a staff member for the U.S. House Financial Services Committee since February 2015. Prior to working for the House Financial Services Committee, he worked for Rep. Robert Hurt (R-VA), where he took a trip sponsored by the Depository Trust & Clearing Corporation that cost $450.50.
i Donna Borak and Andrew Ackerman, “GOP’s Jeb Hensarling Takes Aim at Dodd-Frank, Volcker Rule,” The Wall Street Journal, June 5, 2016.
ii Alan Pyke, “Five Numbers to Know as Dodd-Frank Wall Street Reform Celebrates Its 5th Birthday,” Think Progress, July 21, 2015.
iii “Five Years of Dodd-Frank,” Davis Polk & Wardell LLP, accessed June 2, 2016.
iv Anthony Alexis, “You Have the Right to a Fair Financial Marketplace,” At the CFPB (blog), Consumer Financial Protection Bureau website, July 21, 2015.
v Center for Responsive Politics, Hensarling Campaign and Leadership PAC Contributions from the Financial Sector Since 2010.
vi Michael J. de la Merced, “Morgan Stanley to Take Over Smith Barney, with Citigroup’s Blessing,” DealBook, New York Times, September 11, 2012.
vii “NYSE Euronext,” Investor Words financial glossary, accessed June 1, 2016.
viii Suzanne Struglinski and Samantha Young, eds., The Almanac of the Unelected, 2013: Staff of the U.S. Congress, 24th ed. (Lanham, MD: Bernan Press, 2013).
ix Jeffrey Rosen, “The Unregulated Offensive,” New York Times Magazine, April 17, 2005; and Evan Halper, “Koch-backed Group with Ties to Liberal Causes? Critics Call It a Charade,” Los Angeles Times, February 7, 2015.
x Sunlight Foundation Reporting Group Lobbying Tracker, s.v. “Federal Strategy Group,” accessed June 1, 2016.
xi “Offices: Washington,” Cadwalader, Wickerham & Taft LLP website, accessed June 1, 2016.
xii Suzanne Struglinski and Samantha Young, eds., The Almanac of the Unelected, 2013: Staff of the U.S. Congress, 24th ed. (Lanham, MD: Bernan Press, 2013).