Over at the Washington Examiner today, my brother Tim Carney reports that Amy Friend, the chief counsel of the Senate banking committee during the financial crisis and the creation of the Dodd-Frank financial reforms, is now a lobbyist for the financial sector.
While we usually think of lobbyists who move seamlessly from Capitol Hill to K-Street as access peddlers—people who can get you a meeting with powerful committee chairmen—the former banking committee counsel is a different kind of lobbyist. She’s a comprehension peddler.
The Dodd-Frank law is famously complex, running to 2,300 pages of densely packed legal jargon. Obviously, hiring the woman who helped write the damn thing is a huge advantage to anyone trying to understand how it works—and how it can be circumvented. And her new employers aren’t shy about selling this.
From Tim’s column:
Check out Promontory's press release about Friend's hire: She will work on "the regulatory implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which, at 2,300 pages, is one of the most complex and wide-ranging overhauls of the financial regulatory framework in decades."
Translated: "There's a lot of lobbying left to do on this bill, and thousands of hurdles and loopholes to navigate—you'd better get the bill's author on your side."
If Friend had gone to the banking committee with the intention of maximizing her potential cashout—and I don't think she did—it's hard to imagine how she would have done anything differently. After bailing out banks, her committee passed a complicated bill that increases government's involvement in the industry while leaving regulators with unprecedented amount of discretion.
Imagine if she had written a bill shrinking government's role in finance—then financial firms would have less need for a lobbyist or revolving-door consultant. Imagine a bill that set new rules in stone rather than igniting lengthy, high-stakes regulatory processes—what use would she be to future clients?
Tim is too nice a guy to impugn Friend’s motives. He grants that her motives in creating the complexity of Dodd-Frank had nothing to do with anticipating that she could make a fortune off of interpreting the complexity.
But if we ask the old question of cui bono from Dodd-Frank, it’s clear that one of the answers is Friend.
By the way, this intersection of Senate banking staffers and banking lobbyists is hardly new to Friend. Almost a year ago, I was pointing out that the Dodd-Frank reforms were being compromised by the lobbying ambitions of the Senate committee’s staffers. One Capitol Hill veteran described it to me as “the very worst example of the revolving door in Congress.”
A secret club of current Senate staffers and Wall Street lobbyists is dragging down the chances for meaningful financial reform.
Staffers on the powerful Senate banking committee are part of what is known as "The Banking Blob," a person familiar with the matter told us. The Banking Blob is made up of current banking committee staffers and former staffers who are now bankers or lobbyists. They frequently socialize together, often organizing happy hours and parties.
"They move in a pack. They socialize together," the person says. "Hell. They even inter-marry."
Amy Friend is more or less the queen of that Blob now.
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