Hightower: Wall Street Bankers Pull Off Another Regulatory Heist

Congress finally passed a moderate reform package to tighten regulations on the banksters of Wall Street. Of course, the banksters howled, protesting even the meekest of reforms -- but the package is now the law, so that's that.

Right? Uh ... no.

What Congress passed is a 2,300-page compendium of concepts, leaving the real decision-making about the details of financial regulation in the hands of the Federal Reserve, the SEC, the Commodity Futures Trading Commission and other regulatory agencies.

In other words, the game is still on for Wall Street lobbyists! So they're presently mounting a furious blitz on the rule-writing regulators, still trying to weaken or even kill many of the reform ideas passed by Congress.

To weasel their way inside, the financial giants have reached into the agencies themselves to hire away nearly 150 regulators, luring them with fat salaries to switch sides and become industry lobbyists.

For the banking powers, these insiders-turned-outsiders are well worth the big bucks, for former regulators have long, personal relationships with those in the agencies who're filling in the blanks left by Congress. If nothing else, these newly minted lobbyists are much more likely to get their phone calls returned by their former colleagues than a stranger would.

A New York Times reporter asked one of the switcheroos who's now working for the dark side if he felt this old-buddy connection gave him a lobbying edge. This regulator-turned-lobbyist bluntly said, "If it didn't, I wouldn't be able to justify getting out of bed in the morning and charging the outrageous fees that we charge our clients, which they willingly pay." He added that "you have to work at an agency to understand the culture and pressure points, and it helps to know the senior staff."

If the Wall Street banksters are able to pull off this regulatory heist, you'll know that it was an inside job.

It's not just the regulators that are going through the revolving door of government service to lobbying. The Center for Responsive Politics reports there's another faction wielding some extra clout: former lawmakers and congressional staffers.

It turns out that old Congress critters never die, they just fade away. Into lobbying firms, that is.

Take former House Speaker Dennis Hastert, former House Majority Leaders Dick Armey and Dick Gephardt, and former Senate Majority Leaders Bob Dole and Trent Lott. The names of these onetime legislative powerhouses aren't mentioned in the news anymore, so perhaps you would assume that they've retired back to the old home place, or even passed away. But, no -- they're very much alive and still plying the legislative arts. Only they now do it for million-dollar paychecks as lobbyists for Wall Street financial giants and other corporate interests.

Hastert, Armey, Gephardt, Dole and Lott are among a cadre of 73 former members of Congress who have been working in recent months to weaken or kill new regulations to rein in the gouging and reckless gambling of the big financial firms.

They are not the only former public servants who're now using their insider knowledge and personal connections in Washington to serve the bankers. For example, at least 66 staffers for the House or Senate banking committees have moved from Capitol Hill to the K Street lobbying corridor, and another 82 staffers for members of those committees also are now lobbyists for the finance industry. Adding even more firepower to this special-interest army of influence peddlers are 42 former officials from the Treasury Department.

In an effort to slow down this shameless cashing-in on public service, the watchdog group Public Citizen contacted 47 current lawmakers who are retiring this year. The group asked them to pledge not to take a lobbying job for two years with any corporation that had lobbied them. Not a single one took the pledge. To see who the 47 are, and to get behind stricter lobbying rules, contact Public Citizen at www.citizen.org/revolvingdoor.