Washington’s Revolving Door Makes More Obvious Bribes Unnecessary
Imagine that I were a large, wealthy company, say Walker Investment Corp, that would like a government official to take actions that would result in millions of additional profits. I won’t just walk into the government official’s office with a suitcase full of hundred-dollar bills and say if you do me this favor I will give you this money. While direct, that would be foolish because it is technically illegal to bribe people.
What I would do instead of bribe is simply try to “influence” them. First, my PR department would put out a statement explaining based on some principle what government action Walker Investment Corp thinks would be right. At the same time, I would have my HR department send to the right people a job opening for a upper level “regulatory compliance officer.” The position would pay a million a year and the qualifications would be a “lawyer that shares Walker Investment Corp’s philosophy of government and investing. Direct experience in the decision-making process or high-level government regulator strongly preferred.” Message sent, no laws broken.
The revolving door spends very quickly
With that in mind the New York Times has an interesting story about just how quickly the revolving door turns at Wall Street. The recent financial meltdown should have destroyed the industry if it weren’t for extraordinary government intervention to keep the banks profitable.
Joseph Jiampietro, one of the government’s top deal makers during the financial crisis, has joined Goldman Sachs as a senior investment banker covering the financial services industry.
Mr. Jiampietro was previously a senior adviser to Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, during the throes of the financial crisis, where he helped coordinate more than 100 government-assisted bank deals.
He was also one of the chief architects of the F.D.I.C.’s policies on private equity involvement in the banking industry and was Ms. Bair’s main liaison to hedge funds and the broader Wall Street community. He left the F.D.I.C. in August, after serving for just over a year.
I would happily increase the pay and benefits for top-level government officials and regulators. But only if it were coupled with a new law that would make it a crime to receive any compensation directly or indirectly from any company directly or indirectly overseen by your position during an eight-year period after leaving the job.