Wednesday, February 01, 2017

Sen. Baldwin, Rep. Cummings re-introduce regulator conflict of interest bills

By Mark S. Nelson, J.D.

Senator Tammy Baldwin (D-Wis) and Rep. Elijah Cummings (D-Md) re-introduced the Financial Services Conflict of Interest Act which they had pushed in the last Congress as a means of curbing the so-called revolving door between high-level federal government jobs and Wall Street. The bill would restrict certain types of bonuses and would impose tougher requirements on lobbying and conflicts of interest. The lawmakers announced the bills in a joint press release.

Specifically, the bill would ban government employees from taking bonuses from their former private sector employers for joining the government. The bill would place new limits on lobbying, including by extending the ban on lobbying the federal government from one to two years. Another provision would require senior financial regulators to recuse themselves when official actions directly or substantially benefit an employer (or client) they worked for within the two years before starting their government service.

Although the full text of the latest bills was not yet available, earlier versions of the bills (S. 1779; H.R. 3065) would have amended the Ethics in Government Act to define “covered financial services agency” to include the Fed, FDIC, CFPB, SEC, CFTC, and Treasury. “Covered financial services regulator” would include the officers and employees of a covered financial services agency who hold supervisory positions at the GS-15 level of the General Schedule plus other similar positions.

The Senate version of the bill introduced during the 114th Congress garnered four Democratic co-sponsors, including Sen. Elizabeth Warren (D-Mass), plus Independent co-sponsor and former presidential candidate, Bernard Sanders (I-Vt). The bill never advanced past the Senate Homeland Security and Governmental Affairs Committee. The prior House version of the bill stalled in three committees, but drew 17 Democratic co-sponsors.

Senator Baldwin and Rep. Cummings cited an Obama Treasury nominee and two Trump Administration nominees as examples of why they say their bill is needed. Among current Trump nominees, the lawmakers noted possible conflicts of interest for those who would fill top posts at the National Economic Council and the State Department.