Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

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Goldman's All-Star Lobbying Squad

| Thu Apr. 29, 2010 10:54 AM EDT

All-star, that is, if you're rooting against comprehensive financial regulatory reform and don't want Congress to rein in excessive bonuses, risky speculating, and financial chicanery. On the day the Senate is slated to begin debating its Wall Street overhaul, the Washington Post sheds some light on the lobbying crew Goldman Sachs has assembled to fight reform and make sure whatever changes the Senate wants don't damage the firm's bottom line. Their lobbying team looks like a who's-who of financially-connected politicos with ample connections throughout Washington. Consider it the Yankees—or, if you're a soccer fan like me, the Real Madrid—of financial lobbying, the best money can buy.

Leading Goldman's lobbying shop is Michael Paese, a former aide to Rep. Barney Frank (D-Mass.), the powerful chairman of the House financial services committee. Frank's committee largely crafted the House's version of financial reform legislation, and will play a huge role in reconciling the House and Senate's bills likely later this spring. Frank, the Post reported, banned Paese from lobbying his committee for two years, just as the chairman more recently banned a former aide, Peter Roberson, who left the committee to lobby for the derivatives industry.

Filling out Goldman's lobbying roster are more familiar names like Dick Gephardt, the populist former Democratic majority leader turned Big Finance shill. Harold Ford Jr., the telegenic former Tennessee congressman, who recently mulled a Senate run in New York and did time with Merrill Lynch, is also lobbying for Goldman now. A few more well-connected Goldman lobbyists:

  • Faryar Shirzad, a former economic aide to George W. Bush
  • Joe Wall, a former legislative affairs aide to Dick Cheney
  • Richard Roberts, who's served as a powerful Securities and Exchange Commission commissioner and aide to Sen. Richard Shelby (R-Ala.), a top GOPer on financial reform
  • Eric Edwards, formerly a staff director on a House financial services committee's subcommittee

It's a star-studded lineup, to be sure. That said, with public ire against Goldman rising, its reputation sinking, and even President Obama shunning the firm, even the Yankees of lobbying will have their work cut out for them.

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Let the Finance Reform Battle Begin

| Thu Apr. 29, 2010 7:46 AM EDT

After three days of GOP obstruction and deadlock, Senate Democrats finally wore down their colleagues across the aisle and will today begin full debate on overhauling Wall Street on the Senate floor. Instead of haggling behind closed doors, senators will now have to fight to improve or whittle down the bill out in the open. In the coming days, you’ll see members of both parties making lots of statements and offering amendments to the bill, largely crafted by Sen. Chris Dodd (D-Conn.), that bolster and weaken the array of proposed rules and regulations that rewrite how our financial services industry does business.

Right now, there look to be three main sticking points between the parties. One is the proposed consumer protection agency, which would oversee areas like mortgage lenders, auto dealers, and credit card practices. Sen. Richard Shelby (R-Ala.), a leading figure on financial reform, wants to pare back the reach and power of the agency; he says it would create unnecessary bureaucracy and would pry into the lives of Americans. Shelby’s counterpart, Sen. Dodd, said yesterday that he disagrees with Shelby’s position. "I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen," Dodd said. There's sure to be an intense fight waged on the Senate floor to determine the fate of the consumer agency.

What to do with systemically risky, or "too-big-to-fail," banks is another prickly issue. In an interview with CNBC yesterday, Sen. Bob Corker (R-Tenn.), another leading Republican on financial reform, said the two parties had yet to reconcile their differences on ending the threat of too-big-to-fail banks and preventing future taxpayer bailouts. That said, Corker hinted that GOPers and Democrats weren’t that far apart on the issue: "We can fix 'Too Big To Fail' piece. We really can, in about five minutes. Everybody knows how to fix it." If Corker’s remarks are any indication, reaching a compromise on too-big-to-fail—what Corker seems to believe is low-hanging fruit for the Senate—could be top of the to-do list.

The third issue where major differences remain is regulating derivatives, the exotic, opaque instruments used both by farmers and manufacturers to hedge their risk and by Wall Street to bet on swings in the markets. The derivatives language included in the bill now is especially tough—most of it comes from the Senate agriculture committee’s derivatives bill, which would require derivatives to be traded on exchanges (like the New York Stock Exchange) and put through a clearinghouse so that the risk of losses is absorbed by many parties instead of a few (think AIG). The agriculture committee’s bill would also force derivatives trading desks to be spun off from their larger banking operations, a provision that’s drawn the ire of Wall Street.

Yesterday, Shelby said, "on the derivatives, we haven't worked that out." And the lone Democrat to vote against cloture three times with Republicans, centrist Sen. Ben Nelson (D-Neb.), opposes the current derivatives legislation, too. A provision in the derivatives section would force existing derivatives contracts to post margin—either cash or securities as collateral—on those deals. Warren Buffett, the head of Omaha-based Berkshire Hathaway, had sought to kill that margin requirement for existing derivatives, saying the government couldn't rewrite existing contracts, and his company put pressure on Nelson to do so. But margin requirement remains in the bill, and it's unlikely Nelson will agree to the bill's derivatives rules as they are now until there’s resolution on the Buffett provision.

Of course, there are many other fights to come on the 1,300-page bill. (You can read about more of those here.) Only now, you can watch those fights on CSPAN, or the highlights on the big TV networks, just as many people tuned in for the war over health care reform. The debate starts today around noon.

Dems, GOP Want DOJ Probe of Goldman

| Wed Apr. 28, 2010 12:32 PM EDT

A letter drafted by Rep. Marcy Kaptur (D-Ohio) calling for a criminal investigation of Goldman Sachs has garnered more than 140,000 petition signatures as well as the support of 61 members of the House, including Republican congressman Michael Burgess of Texas. Kaptur's letter, addressed to Attorney General Eric Holder, draws on the allegations cited in the Securities and Exchange Commission's securities fraud suit against Goldman, and says the DOJ should go one step further by pursuing criminal charges against Goldman. "If the DOJ is not currently looking into this particular case, we respectfully ask you to ensure that the US Department of Justice immediately open a case on this matter and investigate," Kaptur's letter says.

Kaptur and members of the Progressive Change Campaign Committee, the organization that drummed up the petition signatures and also made some 4,000 calls to Congress about a Goldman criminal suit, will meet outside the DOJ today at 2 pm to turn up the heat on Holder. The pressure from Kaptur and PCCC comes at a incredibly tough juncture for Goldman. In addition to the SEC's civil suit, Goldman's top executives, including CEO Lloyd Blankfein, face a shareholder suit in New York surrounding the firm's controversial collateralized debt obligations deal (the same at the center of the SEC suit). The firm is also the defendant in a class-action suit over mortgage securities. Blankfein has said he and the firm will fight the SEC's suit.

Finance Reform Battle Delayed...Again

| Wed Apr. 28, 2010 12:02 PM EDT

The financial reform battle—that is, to even start the full debate in the Senate—continues on here on Capitol Hill. For the third time in as many days, Senate GOPers defeated a vote to start debating financial reform legislation, a bill that would try to end future taxpayer bailouts, create a new consumer protection agency to guard against predatory lenders and dangerous products, and shed light on the opaque, $450 trillion over-the-counter derivatives market. The vote was 56-42, with centrist Sen. Ben Nelson (D-Neb.) again voting with Republicans. Majority Leader Harry Reid ultimately voted against the bill, too, a maneuver that allows him to schedule another vote which could happen as early as Thursday morning.

The losing vote wasn't entirely surprising, as Sen. Chris Dodd (D-Conn.), a top Democratic negotiator on financial reform, said earlier Wednesday morning that his party still didn't have the votes to begin the debate. Remarks on Wednesday by Sen. Richard Shelby (R-Ala.) suggest the gulf between the two parties remains gaping and it could take several more days before an agreement is finally reached. "Are we close to wrapping up a comprehensive deal? No, we're not close to that," Shelby told MSNBC.

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