Congressional and Cabinet-level staff members are cashing in on their high power connections and regulatory knowledge by moving to Wall Street investment firms that often double, and in some cases quadruple, their paychecks.
“It has really turned around,” says Wall Street historian Charles Geisst. “It’s now much more about Wall Street collecting political knowledge and influence.”
Financial reform advocates, like Better Markets CEO Dennis Kelleher, say big banks are now willing to pay big bucks to tap into the access and insider knowledge possessed by former Capitol Hill staffers.
“They are paying them millions of dollars for direct access to the most senior policymakers that nobody else gets,” says Kelleher.
According to Politico, dozens of former DC staffers have made the leap to Wall Street, including:
- Morgan Stanley hired Michele Davis, a former chief adviser to Treasury Secretary Hank Paulson
- Morgan Stanley hired Tom Nides, a former top aide to Hillary Clinton at the State Department
- Goldman Sachs hired Jake Siewert, a former counselor to Treasury Secretary Tim Geithner and a former press secretary under President Bill Clinton
- Credit Suisse hired Calvin Mitchell, a former press operations chief under Tim Geithner at the New York Federal Reserve
- JP Morgan Chase hired Jennifer Zuccarelli who worked in the Paulson Treasury Department
- JP Morgan Chase hired Mark Kornblau, a former Democratic presidential campaign operative
- Goldman Sachs hired Andrew Williams, a former spokesperson for Timothy Geithner
Staff members willing to leverage their access and power relationships can make lucrative gains. The top staff salaries in Washington generally range from $100,000 to $200,000. But as Politico notes, Goldman managing directors make a minimum base salary of $500,000, not including bonuses.
Critics say the new trend helps explain the growth of government and the rise of complex and burdensome regulations, as staffers who often help craft rules and legislative language have an added incentive to lard such measures with rules only they can decipher.
“With any of the highly regulated industries, it helps to have people who have experience on the other side of the desk and have a view on how issues will be interpreted,” says Tony Fratto, a former Treasury and Bush White House official who now counsels banks and others for Hamilton Place Strategies. “These used to be things that no one really cared about,” said Fratto. “Now they have risen in prominence.”