Securities Law

Industry Groups Spend Millions on Lobbying; States & Locals Not So Much

WASHINGTON — The Financial Industry Regulatory Authority and four major industry groups spent millions of dollars on lobbyists to push their agendas on Capitol Hill, while the National Association of State Treasurers was the only governmental group to report hiring lobbyists, according to annual tax forms 22 muni-related groups filed with the Internal Revenue Service.

Besides FINRA, the groups include the Securities Industry and Financial Markets Association, the Investment Company Institute, the American Bankers Association and Bond Dealers of America. They reported spending a total of $4.56 million for lobbyists in their 990 forms, which nonprofit groups must file annually with the IRS.

But that figure soars to $18.53 million when money the industry groups spent on their in-house lobbyists is added, based on data from the Center for Responsive Politics’ OpenSecrets.org’s website. The $18.53 million makes NAST’s expenditure of $180,000 on lobbyists seem paltry by comparison.

The American Association of State Highway and Transportation Officials, another of the 22 muni market groups, did not report any lobbying expenses on its 990 form for the year ending June 30, 2010. But OpenSecrets.org showed the group spent $440,000 for the 2010 calendar year.

Even if AASHTO’s and NAST’s lobbying expenditures are combined at $620,000, they are only 13.6% of what FINRA and the four industry groups reported for lobbying on their 990 forms.

“There’s this huge imbalance in terms of the resources that are brought to bear to influence these policies and that has an effect and is obviously of concern,” said Barbara Roper, director of investor protection for the Consumer Federation of America.

“There certainly is a disparity,” said Viveca Novak, editorial and communications director for the Center for Responsive Politics, which tracks political contributions and lobbying data and makes it public through its OpenSecrets.org website.

“You’re talking about some very heavy hitters. They’ve been at this for a long time. They play the game well,” said Novak. State and local governments, she said, generally “don’t have the resources” to pay for lobbyists.

The 990 forms show the total amounts the groups reported spending on federal, state and local lobbying and do not identify the firms or individual lobbyists that were paid.

OpenSecrets.org shows the specific payments the groups made to lobbying firms and the individuals that lobbied for them at the federal level: the House, the Senate, the White House and federal agency officials. OpenSecrets.org’s data comes from lobbying reports submitted to the House clerk but is based on calendar years, which may not exactly match the fiscal years covered by the groups’ 990 forms.

The individual lobbyists that work for the industry groups are mostly former members or staff in Congress, former administration officials, fundraisers for politicians or advisors in political campaigns.

The lobbyists hired for tax issues are mostly former staffers of the House Ways and Means Committee, the Senate Finance Committee and the Joint Tax Committee. Similarly, lobbyists for securities issues typically are former members or staff for the Senate Banking Committee, the House Financial Services Committee, or its predecessor jurisdictionally, the House Energy and Commerce Committee.

“If you’re a congressional member or staffer on a committee, you can chose to go that route and there is no shortage of jobs for lobbying the groups that used to lobby you,” said Novak. “You can make a lot of money that way.”

Alex Sternhell, for example, was Democratic deputy staff director of the Senate Banking Committee but left that post in 2007 and eventually started his own lobbying firm, Sternhell Group. His firm made $1.32 million last year lobbying for Citi, ICI, the Federal Home Loan Bank, high-frequency trader Hudson River Trading, PricewaterhouseCoopers, Travelers Companies and Hewlett-Packard.

And just because a high-ranking official leaves a trade group does not mean they stop working for the group.

Edward L. Yingling, who retired as ABA president and chief executive officer at the beginning of last year and is now a partner at Covington & Burling, was paid $80,000 to lobby on behalf of the ABA last year. Julie Domenick, the ICI’s former executive vice president who left in 2004 and now owns Multiple Strategies, was paid $120,000 to lobby on behalf of the group last year.

Most of the groups’ latest 990s are for fiscal or calendar years ending in 2010 or 2011, when the Dodd-Frank Act was enacted and federal agencies began implementing it. The act was signed by President Obama on July 21, 2010.

“Dodd-Frank showed an overwhelming imbalance between the industry and everybody else” in terms of lobbying, Roper said. Lobbying “was a problem as the legislation was being written and it’s an even bigger problem now as it’s being implemented,” she said.

Several lawmakers introduced bills to repeal the new law and others sponsored legislation to roll back or ease some of its restrictions.

The only other organization to disclose payments for lobbying among the 22 groups in The Bond Buyer’s annual salary survey was the Financial Accounting Foundation, which spent $420,864 on lobbying, according to the 990 it filed for 2011. The FAF oversees the Governmental Accounting Standards Board and the Financial Accounting Standards Board.


FINRA reported spending $452,730 on lobbying in the 990 it filed for 2010.

OpenSecrets.org shows FINRA spent $800,000 for inhouse and outside lobbyists that year. Of that amount, $470,000 was for outside lobbyists — $240,000 for the Rich Feuer Group, now Rich Feuer Anderson, $120,000 for Nappi & Hoppe, and $110,000 for the Podesta Group — and $330,000 was for in-house lobbyists.

Asked why FINRA lobbies, spokeswoman Michelle Ong noted that the authority is a self-regulator not a trade group and said: “We interact with policymakers on a number of issues such as investor protection and investor education, anything that falls under that umbrella.”

FINRA worked with four lobbyists at Rich Feuer, including the founders who both previously held high-level positions at Reuters America, now Reuters, and Instinet after working on Capitol Hill. Peter D. Rich helped set up Reuters’ U.S. legislative and regulatory strategy and was previously counsel to the Senate Banking Committee, serving as chief advisor to Senate Democrats on securities and financial markets for most of the 1990s. Before that he was a securities litigation attorney at Debevoise & Plimpton.

Rich, who opened the Washington government affairs office for Reuters, was financial services counsel to Republican members on the House Energy and Commerce Committee. He also was a transaction attorney in the Washington office of Sidley Austin LLP.

Douglas R. Nappi, a principal at Nappi & Hoppe, served as chief counsel of the Senate Banking Committee when Sen. Richard Shelby, R-Ala., was chairman. Shelby is now the top Republican on that panel. Nappi previously served on the committee staff and was counsel to former committee chairman Sen. Alfonse D’Amato, R-N.Y. Rodney Hoppe, also a principal, was press secretary for the House Energy and Commerce Committee when former Rep. Tom Bliley, R-Va., was chairman. He previously worked for MBM Consulting in Virginia and his clients included Bliley and Eric Cantor, who is now House Majority Leader.

The Podesta Group was founded and is led by Tony Podesta, a powerful lobbyist and fundraiser who has worked on several presidential and congressional campaigns for Democrats and headed up Obama’s presidential transition efforts. At that firm, FINRA worked with Gwen E. Mellor, who has ties to Senate Banking Committee chairman Tim Johnson, D-S.D., other Senate Democrats and Vice President Joe Biden. Also lobbying for FINRA was Cristina Antelo, a former investment banker at Goldman, Sachs & Co. who also worked at JPMorgan and the law firm of DLA Piper.


SIFMA spent $1.10 million for lobbying, according to its 990 for the fiscal year ending Oct. 31, 2011.

OpenSecrets.org shows the group spent $5.23 million on lobbying for calendar year 2011. Of that amount, $4.14 million was for in-house lobbyists and $1.09 million was for outside lobbyists.

Payments to outside lobbyists were: $300,000 for Ernst & Young, $240,000 for the Prime Policy Group, $240,000 for Elmendorf Ryan,$155,000 for the Walter Group, $80,000 for Jones Walker, $40,000 for Davis, Polk & Wardwell and $35,000 for Steptoe & Johnson, according to OpenSecrets.org.

At Ernst & Young, SIFMA’s lobbyists included nine individuals, many of whom once worked on Capitol Hill or in the administration and were very involved in tax issues. One was LaBrenda Garrett-Nelson, who worked on the Joint Tax Committee during the Tax Reform Act of 1986 and was a partner at Piper & Marbury, now DLA Piper. Another was Nicholas Giordano, former chief tax counsel for the Senate Finance Committee and legislative director and tax counsel for Sen. Max Baucus, D-Mont., the current chairman of that committee.

Also in the group were Weston J. Coulam, who was an executive director at Morgan Stanley and served in many posts in Congress, including as a legislative assistant to Sen. Orrin Hatch, R-Utah, currently the top Republican on the Finance Committee, and Amy Swonger, who has ties to Senate Minority Leader Mitch McConnell, R-Ky., and other Republicans.

At Prime Policy Group, SIFMA worked with seven individuals, including its chairman Charlie Black, who was senior advisor to former Presidents Ronald Reagan and George H.W. Bush and also served on President George W. Bush’s 2000 and 2004 campaigns as a volunteer political advisor and surrogate spokesman.

At that firm, SIFMA also worked with Scott Pastrick, the firm’s president and CEO who served in the National Democratic Party leadership and as an advisor for many presidential, House and Senate political campaigns, as well as Martin Paone, the firm’s executive vice president, who spent 29 years working on the Senate floor in various capacities, including as manager of the Democratic cloakroom.

At Elmendorf Ryan, SIFMA worked with seven lobbyists, including founder Steve Elmendorf, a senior advisor for 12 years to former House Democratic Leader Dick Gephardt, D-Mo., and Jimmy Ryan, who was a top staffer and advisor to Sen. Harry Reid, D-Nev., now Senate majority leader, and formerly headed Citi’s federal government affairs office here.

The Walter Group, which also lobbied for SIFMA, is run by Jeffrey Walter, a national fundraising expert who has worked on the campaigns of former leaders of the House and Senate committees that have jurisdiction over federal regulators of the financial markets, including D’Amato and Bliley. He also was deputy staff director of the Joint Economic Committee and worked in the Department of Transportation in the Reagan administration.

SIFMA worked with three lobbyists at Jones Walker, including Palmer Hamilton, head of that firm’s Washington office who held several senior posts within several administrations and was chairman of the reelection committee for Shelby.


BDA paid $100,369 to RR&G for lobbying according to its 990 for fiscal year ending Feb. 29. 2012. OpenSecrets.com shows it spent $200,000 on lobbying in 2011, paying RR&G $120,000 and Ellen B. Marshall $80,000.

Roberts, Raheb & Gradler LLC, was co-founded by Richard Roberts, a former SEC Commissioner who previously served as chief of staff and legislative director for Shelby. Marshall, who owns Marshall & Co., has experience with political campaigns and focuses on federal and state legislative advocacy, political communications and grassroots strategy and management.


The ABA reported spending $952,789 on lobbying in its 990 for the fiscal year ending Aug. 31, 2011.

OpenSecrets.org shows the ABA paid a total of $8.14 million to in-house and outside lobbyists for calendar year 2011, including $6.16 million to its own lobbyists, $860,000 to lobbyists of affiliates, and $1.12 million to outside lobbyists.

Thes outside lobbyists’ payments were: $320,000 to the Glover Park Group; $150,000 to Williams & Jensen; $120,000 each to Tassey & Associates and Clark Lytle Geduldig & Cranford; $80,000 each to Covington & Burling, Federal Resources Group and Porterfield & Lowenthal; $75,000 to Roy Ramthun; $60,000 to JDM Public Strategies and $20,000 to Barnett, Sivon & Natter.

The Glover Park Group was founded in 2001 by former White House and Democratic campaign officials Carter Eskew, Michael Feldman, Chip Smith and Joe Lockhart. ABA worked with four lobbyists, including Brian Gaston, who spent over 16 years working for the House Republican leadership and was deputy chief of staff and policy director to Rep. John Boehner when he was House Conference chairman. The group also worked with Joel Johnson, who has over two decades of legislative and communications experience, including as President Clinton’s senior advisor for policy and as former Senate Majority Leader Tom Daschle’s chief legislative and communications advisor.

One of the firm’s lobbyist that worked with that firm, ABA was Jason Rosenberg who served as Montana Democrat Sen. Jon Tester’s liaison to the Senate Banking Committee and was Alabama Democrat Rep. Artur Davis’ senior legislative assistant for banking, tax, housing and other issues while he was on the House Financial Services and Ways and Means Committees.

Among the five Williams & Jensen lobbyists the ABA worked with was Steve A. Blumenthal, who formerly was counsel to the House Energy and Commerce Committee, director of regulatory relations at the Securities Industry Association, now SIFMA, and an attorney in the office of the general counsel at NASD, now FINRA.

ABA worked with lobbyists at Porterfield & Lowenthal, including the president, Lendell W. Porterfield, formerly a senior advisor to Shelby on the banking panel, and Jason Pitcock, who was counsel to the House Financial Services Committee’s capital markets subcommittee.

Six lobbyists at Clark Lytle were on ABA’s account, including former Rep. Deborah Pryce, R-Ohio, who chaired the House Republican Conference, was deputy majority whip and a member of the House Financial Services Committee, as well as Sam Geduldig and Jay Cranford who have close ties to House Speaker John Boehner, R-Ohio.

ABA worked with James C. Sivon and Raymond Natter at Barnett, Sivon & Natter, both of whom have prior experience on banking committees in Congress. Natter was deputy chief counsel in the Office of the Comptroller of the Currency.


ICI reported spending $1.69 million on lobbying, according to its 990 for the fiscal year ending Sept. 30, 2011.

OpenSecrets.org shows that for 2011 the group paid a total of $5.02 million to in-house and outside lobbyists, with $1.54 million going to outside lobbyists and $3.48 million to inhouse lobbyists. The payments to outside lobbyists were: $160,000 each to Raffaniello & Associates and the Sternhell Group; $150,000 to Capitol Hill Strategies; $120,000 each to the Clark Lytle firm, Livingston Group, the Podesta Group, Multiple Strategies, Ogilvy Government Relations, and Groom Law Group; $112,500 to Smith & Sowalsky; $90,000 to Strategic Health Care; $80,000 to RR&G; $40,000 to John Duncan & Associates, and $30,000 to Covington & Burling.

At Raffaniello ICI worked with two lobbyists: Patrick Raffaniello and Timothy Hanford, both of whom were tax counsel to the House Ways and Means Committee and top officials in the national tax services office here of PricewaterhouseCoopers, which was acquired by the federal policy group of Clark Consulting in 2002.

At Capitol Hill Strategies, ICI worked with four lobbyists, including Paul Bock, a member of Obama’s transition team who was former chief of staff to Sen. Herb Kohl, D-Wis., and was involved in Senate appropriations, banking and other committee issues. The group also worked with Charles M. Brain and Beau Schuyler, who both served as congressional staff and worked on House Ways and Means Committee tax issues.

The ICI dealt with five lobbyists from The Livingston Group, which was founded by Bob Livingston, a Republican from Louisiana who formerly chaired of the House Appropriations Committee, and J. Allen Martin, Livingston’s chief of staff.

The group worked with the same lobbyists at the Clark Lytle firm as the ABA.

At RR&G, the ICI also worked with Roberts, as well as Geoffrey C. Gradler, who served as political and legislative aide to former House Majority Leader Tom DeLay, R-Texas, and former Senate Banking Committee chairman Phil Gramm, R-Texas, and Jonathan Paret, who previously was vice president and legislative counsel for the Securities Industry Association, now SIFMA.

At Podesta Group, ICI worked with six lobbyists, including Podesta and Paul A. Braithwaite, former executive director of the Congressional Black Caucus was a staffer for Tom Carper, D-Del., when he was in the House. Carper is now a member of the Senate Finance Committee. Another lobbyist for ICI at the firm was Jaime Harrison, counsel to former House Majority Whip Rep. James Clyburn, D-S.C., and executive director of the House Democratic Caucus. ICI also worked with Oscar T. Ramirez, who served in the Obama administration and, worked for House members and for the presidential campaign of Sen. John Kerry, D-Mass., and the gubernatorial races of Maryland Gov. Martin O’Malley and Sen. Mark Warner, and Alex Sink, D-Fla.

ICI worked with six lobbyists at Ogilvy, including its chairman Wayne Berman, who has been involved in almost every Republican presidential campaign, was an assistant secretary at the Commerce Department under President George H.W. Bush, and a senior advisor the transition team of former President George W. Bush. It also worked with Justin Daly, who has since left Ogilvy. Daly was a legal policy advisor at the Securities and Exchange Commission and served as chief securities counsel to the House Financial Services and Senate Banking Committees.


NAST’s 990 for the fiscal year ending June 30, 2011 showed the association spent $180,000 on lobbying. OpenSecrets.org shows the group paid Williams & Jensen $200,000 in each of 2010 and 2011.


Even though it did not report any lobbying expenses on its 990 form for the year ending June 30, 2010, OpenSecrets.org shows it spent $510,000 in 2009 and $440,000 in 2010. AASHTO’s payments in 2010 were: $120,000 each to Covington & Burling, Perkins Coie, and Kathryn Ruffalo-Farnsworth; $40,000 to Mercury; and $20,000 each to International Government Relations Group and Mercury/Clark & Weinstock.

At Covington, AASHTO worked with Jack Schenendorf, former chief of staff of the House Transportation Committee. At Perkins it worked with William Malley who has expertise with P3s, transportation, and federal grants and loans. Ruffalo-Farnsworth was an ex-senior advisor the Senate Environment and Public Works Committee,. At Mercury, AASHTO worked Brett Thompson, who was legislative director for former Sen. James Talent, R-Mo.


While FAF paid $420,864 for lobbying according to its 990 for 2011, OpenSecrets.org shows it paid $440,000 to K&L Gates in 2011 and spent another $180,000 on in-house lobbyists.




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