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Judd Gregg
In the good old days, the corralers of congressional favor didn't have to operate from the lobby. They could just pass out $100 bills right on the floor of Congress. (See Credit Mobilier scandal.) We're a long way from that era. But those who would influence how taxpayer money is spent or what gets included in new legislation or what regulations are drawn up (and how they are enforced) have at their disposal far more polished tools than outright bribery to bend things their way. One of these is the revolving door.

Find a retired colonel, a former member of the Securities and Exchange Commission or an ex-Congressperson to put on the payroll and you're halfway home, with an insider track of influence. Of course, there are rules that must be followed since the Ethics in Government Act of 1978 and its reform in 1989. For instance, there is a "cooling-off" period of one year in which former senior government officials can't directly lobby current officials in executive departments. As if that makes a huge difference.

The revolving door spins several ways: government-to-industry, government-to-lobbying and industry-to-government. All of it produces a pro-business bias as colleagues with friendly connections and insider knowledge of "how things work" in everything from congressional committees to Pentagon weapons development teams provides for the special needs of corporate America.

Which is not to say all lobbying is corrupt or that every former government official who steps into a lucrative private-sector job with a company that does business with the government or seeks to affect government policy is personally crooked. But the effect of the revolving door is nevertheless quite frequently damaging to the common good. And its reach is immense. See, for instance, the Project on Government Oversight's recent report SEC Faces Ethic Challenges with Revolving Door.

Jonathan Easley has taken a look at a number of high-level officials who have left government service for well-remunerated "consulting" jobs at companies whose wish list they can help fulfill. For instance, there is Judd Gregg, formerly of the Senate Banking Committee,  who

doesn't have experience identifying growth in emerging markets or putting together complex financial models. But that didn’t keep him from landing a plum gig at the most talent-rich and fiercely competitive investment bank in the world. His life of public service now complete, the former three-term Republican senator from New Hampshire—who had briefly agreed to serve as President Obama's first commerce secretary before backing out—joined Goldman Sachs last week as an international advisor.

In his new role, Gregg will be responsible for such nebulous duties as "providing strategic advice to the firm and its clients, and assisting in business development initiatives across the global franchise."

Goldman CEO Lloyd Blankfein, whose firm was upbraided by a Senate committee only one month ago for perpetrating a massive fraud in the run-up to the financial crisis that some now believe warrants criminal charges, said of Gregg, "His experience and insight will contribute significantly to our firm and our continuing focus on supporting economic growth."

I'm sure Gregg will contribute significantly, and probably not so nebulously.

The 1989 law forbids him from lobbying Senators or Senate staffers. But it's not clear whether he could lobby former colleagues in the House of Representatives. As Evan Mackinder points out:

Gregg, who opposed President Barack Obama's Wall Street reform bill passed last year, has also taken heat from groups like POGO for joining up two new firms that also lobbied hard to weaken that legislation. ...

During Gregg's time in the Senate, the securities and investment industry was a major contributor to Gregg's campaign. People and political action committees associated with the industry donated more than $241,000 to his campaign committee and leadership PAC. Goldman Sachs was a frequent contributor to Gregg's campaign committee, offering up $13,000 from its PAC to the senator's re-election committee during his career.

Republicans and Democrats, it makes no difference. Colonels and generals join weapons-makers, SEC and FCC regulators join those they regulated, former members of the Senate Banking Committee like Evan Bayh join hedge funds. Of course, their right to work for whomever they wish must be protected. But who protects us from the lubrication they provide for the expenditure of taxpayer dollars and from the curtailing of government regulations? Current law certainly does not.

 

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