WE’VE FREQUENTLY WRITTEN IN this space about the revolving door between Congress and K Street, but it would seem there’s a new revolving door in town. The New York Times reported Monday that some banks and Wall Street firms routinely pay executives special bonuses and compensation packages if they receive a high-level government job. The Times article comes in the wake of a POLITICO report noting that President Obama’s nominee for Treasury undersecretary, Antonio Weiss, would receive a multi-million dollar bonus from his firm, Lazard Ltd. if his nomination is confirmed.
Is this just a sneaky way for Wall Street to broaden its influence in Washington, or is it a way to encourage qualified executives to go into public service? For the progressive wing of the Democratic party, led by Sen. Elizabeth Warren, the answer is very clearly the former. The Hill notes that although Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.) have formally opposed Weiss’s nomination, it seems likely that broader opposition will emerge as confirmation hearings approach in 2015. Indeed, POLITICO reports that Sen. Dick Durbin (D-Ill.) has also voiced his disapproval of the nomination.
Weiss is far from the first Wall Street insider to land a top position in the Obama administration, however. As The Hill notes, SEC Chairman Mary Jo White spent a portion of her career as an attorney representing major financial firms and banks such as Morgan Stanley and Bank of America. Likewise, Treasury Secretary Jack Lew was a top executive at Citigroup before joining the administration, and several other prominent executive branch officials have strong ties to Wall Street.
But should having ties to the industry an agency is tasked with regulating automatically disqualify a candidate? In an article for the New York Times, Andrew Ross Sorkin argues that it should not. In fact, Sorkin asserts that the most talented and qualified candidates, like Antonio Weiss, often come from executive-level positions and should be encouraged to pursue public service.
While it’s likely unavoidable that executives will be appointed to senior executive branch positions, bonuses such as the one Weiss is purportedly due should he be nominated give the appearance of attempting to influence the federal government in an underhanded fashion. According to The Hill, firms are already doing away with such bonuses. While the eventual outcome remains to be seen, it seems likely that the practice will gradually diminish, given the outcry from progressives over Weiss’s nomination.