Hillary Clinton Backs Bill That Would Ban 'Golden Parachutes' For Wall Street Bankers
WASHINGTON -- Democratic presidential candidate Hillary Clinton announced her support Monday for legislation that would ban "golden parachutes" for private sector employees, like Wall Street bankers, who take jobs with the federal government.
The Financial Services Conflict of Interest Act, which is sponsored in the Senate by Tammy Baldwin (D-Wis.) and in the House by Elijah Cummings (D-Md.), would ban golden parachutes and crack down on other conflicts of interest in government. Progressive groups, who believe that the revolving door between the private sector and the government fosters corruption, had written a letter to Clinton last week asking her to clarify whether she supported the legislation. Sen. Elizabeth Warren (D-Mass.) has called it "a bill any presidential candidate should be able to cheer for."
Clinton voiced her support for the bill in an op-ed for The Huffington Post co-written with Baldwin. Their blog post argues that government workers with private sector experience are usually an "asset, and not a liability," but "in some cases it can affect the public trust -- for example, if a public servant's past and future are tied to the financial industry. That's when people start worrying that the foxes are guarding the hen house."
This is exactly the situation that former Deputy Secretary Tom Nides took advantage of, as a longtime Morgan Stanley executive who served under Clinton at State before returning to the bank. When Nides left Morgan Stanley, he disclosed to the government that the bank was allowing him to cash out his shares at an accelerated rate. The situation was similar for Robert Hormats, an under secretary of state during Clinton's tenure, who wrote to the government upon taking the job that Goldman Sachs would be accelerating and paying out his restricted shares.
Another member of President Barack Obama's administration, Treasury Secretary Jacob Lew, was able to take home bonus compensation because he left for a “high-level position with the United States government or regulatory body." The policy from his former employer, Citigroup, would not have applied had he left for a private sector competitor. While banks that have policies that allow for special financial treatment for employees that take government jobs argue that the policies are meant to encourage public service, rather than curry favor with the government, reform groups argue such policies foment regulatory capture.
http://www.huffingtonpost.com/entry/hillary-clinton-wall-street-golden-parachutes_55e44f14e4b0b7a9633974eb
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