Over a year and a half ago, a former staffer to Rep. Barney Frank, the then-chairman of the House Financial Services Committee, took a job with Goldman Sachs as the financial firm’s top lobbyist in Washington, D.C. The staffer had helped write legislation while he was working in the House of Representatives that would have direct consequences on his new employer.
Frank’s response, at the time, was admirable: He “instituted a permanent ban on committee staff communication with Peter Roberson, an aide who left the panel for K Street after playing a lead role in crafting derivatives legislation,” according to the Huffington Post.
By law, Roberson is banned from communicating with staff for one year, but Frank said in a statement that period of time is insufficient. "I am therefore instructing the staff of the Financial Services Committee to have no contact whatsoever with Mr. Roberson on any matters involving financial regulation for as long as I am in charge of that Committee staff," said Frank.
Frank said he sympathizes with those who claim Roberson's cash-out is an example of the revolving door at its worst. "Several people have expressed criticism of the move by Peter Roberson from the staff of the Financial Services Committee to ICE, after he worked on the legislation relevant to derivatives. I completely agree with that criticism," he said. "When Mr. Roberson was hired, it never occurred to me that he would jump so quickly from the Committee staff to an industry that was being affected by the Committee's legislation. When he called me to tell me that he was in conversations with them, I told him that I was disappointed and that I insisted that he take no further action as a member of the Committee staff. I then called the Staff Director and instructed her to remove him from the payroll and provide him only such compensation as is already owed." . . .
Today, Frank is expected to announce his decision not to run for reelection, after he completes his 16th term in office, at a press conference in Newton, Massachusetts. But what will he do next?
There is little question that he could work as a consultant or as some sort of lobbyist to various financial service companies and make a good deal of money. He probably knows the financial laws better than anyone else—and, therefore, he probably knows how to circumvent them better than anyone else. Given his expertise, knowledge, and experience, for a Goldman Sachs, or a Morgan Stanley, or a Bank of America, he would be a great hire, well worth their money.
The offers for Frank to work for a financial services company will come in. But will Frank take them, or continue the policy he instituted when his staffer did the same thing?
When his former staffer took a job at Goldman Sachs, Frank said that “Fortunately, examples of staff members doing what Mr. Roberson has done are rare, but even one example is far too much and that is why I wanted to make clear I share the unhappiness of people at this, and my intention to prohibit any contact between him and members of the staff for as long as I have any control over the matter.”
Given the position Frank will be in upon his retirement, it will be worth watching to see what Frank does after he leaves his current job.
UPDATE: At his press conference, Frank said, “Let me be very clear: I will neither be a lobbyist or an historian.” But, who knows? Maybe Frank won't lobby for Fannie, he'll be made head of it (they get good bonuses, I hear).
