Washington’s Revolving Door Keeps Spinning

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Mary Schapiro
SEC Chair Mary Schapiro testifies on Capitol Hill in Washington in her former role as SEC chair. (AP Photo/Evan Vucci, File)

Mary Schapiro, until recently the chair of the Securities and Exchange Commission, has passed through Washington’s lengendary revolving door to a new job at Promontory Financial Group, a company well-known as a fixer in the nation’s capital. The Wall Street Journal describes Promontory as “a consulting firm that has built a reputation as a shadow regulator by hiring scores of former government officials” who help banks struggling to comply with – or influence — the rules.

Click the chart to zoom in. Courtesy of Zero Hedge

Schapiro will join many government agency alumni at Promontory — The Wall Street Journal places the number of former regulators there at around 100. Promontory’s founder and CEO Eugene Ludwig is a former regulator himself. He served as President Clinton’s comptroller of the currency from 1993 to 1998. One of their more recent hires is Julie Williams, a key player in writing the Dodd-Frank bank reform law. She served for three decades at the Office of the Comptroller of the Currency, working at different points as the chief counsel and the acting comptroller of currency. Schapiro will also be working alongside many other former SEC staffers, including longtime Wall Streeter Arthur Levitt, who was the longest serving SEC chair, and former Acting SEC Chair Laura Unger.

Interviewed by The Wall Street Journal about her new position at Promontory, Schapiro insisted, “In my case, there’s no revolving door… I won’t be going back to government.” But that’s not exactly right.

“I guess we maybe have a difference in opinion about what the revolving door means,” says Michael Smallberg, an investigator for the government watchdog group Project on Government Oversight.

Schapiro has spent most of her career as a regulator, and has led three of the major agencies that oversee Wall Street: the government’s SEC and Commodity Futures Trading Commission, as well as FINRA, the Financial Industry Regulatory Authority, which independently monitors securities trading. She also has served as a board member at Duke Energy and Kraft Foods. And even though she hasn’t revolved between the public and private sector as often as many of her former colleagues, she will bring a Rolodex of government contacts to her new job where, according to Promontory, she will “advise clients on risk management, drawing on insights and understanding gleaned from her deep regulatory experience as well as on her service on boards of directors of major American corporations.” In other words, she’ll help banks work with the very regulators she used to supervise.

“Its not surprising, but it is illuminating and concerning,” Smallberg says. “At her confirmation hearing and during her time in office she did at least recognize some of the appearance problems that are associated with people going from the SEC to industry.”

Schapiro has sworn not to appear before the SEC on behalf of her new clients at Promontory. But, Smallberg says, “she can still do what’s referred to as ‘behind-the-scenes lobbying’ where perhaps she won’t personally be going to the SEC, but she’ll be telling her clients, ‘these are the people to contact and the types of calls you can make to be most effective.’”

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  • http://www.facebook.com/spencer.eden Spencer Eden

    The world is waking up.

  • Gordon

    One of our cliches goes, “We are a nation of laws and not men.” It is readily seen to be a sham and a shame when we see who controls the creation or demise of what passes for our laws. It is easy to see the injustices of our system when the rich and powerful continue to rig the game and then use as their defense: “What we did was not illegal.” Well, duh!

  • huelong123

    Man this lady loves MONEY!!!

  • http://www.facebook.com/people/Mike-Davis/100001033777023 Mike Davis

    No surprises here.

  • Anonymous

    Mary Schapiro has been an abject failure at each of the agencies she headed. My hope is that at Promontory, she is able to influence no one and nothing when it comes to public policy. She suffers from that most disgusting of maladies, Dawkins Disease: whenever she has screwed up, she falls up, not down.

  • bostonTparty
  • http://www.facebook.com/alice.brown.568 Alice Brown

    This is what our wonderful Senator Warren was warning us about……we the people are completely out of the loop when it comes to Wall Street and the iron grip it has on Congress and the SEC. for shame, Pres. Obama.

  • Anonymous

    Of course it does and ever will. It is a perpetual motion machine.

  • ErnestineBass

    As does the crowd she runs with.

    Self-serving hacks like Shapiro thoroughly disgust me.

  • Joyce

    Shame on who? This has been going on long before Obama, go educate yourself

  • http://www.facebook.com/eldred.fuchs Eldred Fuchs

    Maybe we need a new name for the revolving door. It appears to be more like a Pet Door: it lets cats and dogs go both ways, along with skunks,possums,drafts,and burgulars.

  • truegangsteroflove

    This is all fine and grand, but at some point all whinging should amount to something, should go somewhere, should achieve some result. Bill Moyers has been a great presence over the decades, but at this point his complaints are falling a bit flat. I would like to see more of a call to action. Our country is sliding into a morass of corruption, and to just harangue about it can give one the reputation of being a crank. I realize this is a razor’s edge, but I would like for him to raise the level of urgency or concern. On just a prestige level alone, it is one of the greatest absurdities of modern times that Wayne LaPierre has a much larger command of the national stage than Bill Moyers.

  • Jaime Yarbrough

    We have seen the enemy and he is us. This phenomena hit me big time in 07 just before the dismal nightmare that became 08. Thanks to Alex Jones (just be patient), Ron Paul and a whole lot of people pointing out the cumulative flaws of ‘the system’ I realized none of it could take place unless the electorate was too distracted, too apathetic, too morally defeated to think they could change things, allowed it to happen and / or were prevented by the perverted legal system (where do they make laws again ? ) to turn things around.
    The fact is this world, society and especially technology is in uncharted waters. Due to it’s accelerating pace, by the nature of the race into the future much of the time we’ve had to make things up as we go. Unfortunately the wolves that know human weakness have and are leading us down a very destructive path. Many will be hurt. Many will die before we learn the lesson written on the wall.

  • Gentoo

    Some of us are indeed taking Bill’s (and others’) calls to action and doing something about the situation: https://represent.us/kstreet5k/#/. If you are located in or around DC we would love to have you join us.

  • Anonymous

    In the private sector, employees often have to sign a non-compete clause to get hired or after they are hired — saying they won’t work in the same industry or similar job setting as the employment they are holding or industry sector of the job. Government employees, especially those in high level positions, should be required to do the same. No working in lobbing, or working for or in the industry or sector in which the oversaw, regulated, enforced regulation for, etc., for at least 4 years. No contact orders with other government officials who are involved in active work within government on topics related to their former work. Should be a crime to violate. This is a revolving door. She is peddling influence.