One plank of the draft Democratic platform — pushed by those on the left skeptical of Clinton’s ties to Wall Street — is receiving significant attention. With the Democratic National Convention starting on Monday, where Hillary Clinton will become the party’s presidential nominee and the platform is to be finalized, it’s a policy that a bill currently pending in Congress could codify into law.
About the bill
The Financial Services Conflict of Interest Act, S. 1779 and H.R. 3065, has three major provisions. First, it would prevent government employees from receiving bonuses from the Wall Street firms they used to work for; second,prevent former Wall Street employees in government from dealing with cases involving their former employers for two years after they’ve come to Washington; third, it would expand these ethics rules beyond the ones currently governing presidential appointees (rules that many progressives consider to be too weak), to include all government officials including ones in relevant agencies such as the Federal Reserve, Securities and Exchange Commission, and Consumer Financial Protection Bureau.
What supporters say
Introduced by Sen. Tammy Baldwin (D-WI) and Rep. Elijah Cummings (D-MD7), the bill attempts to remedy a huge concern among many Democrats on the progressive wing who feel that Clinton, her husband Bill Clinton, and Barack Obama have all been too cozy with Wall Street while in office. Even the Democrats that were considered most favorable to Wall Street like Sen. Chuck Schumer (D-NY) have come on board with the legislation.
Critics cite the taxpayer-funded bank bailouts of 2008–09 as “welfare for the rich” and criticize the appointment of Wall Street-connected people including Jack Lew, Timothy Geithner, Larry Summers, and Robert Rubin to financial oversight positions such as Treasury Secretary. Lew received a bonus totalling more than $1 million when he left Citigroup to join the Obama Administration.
“Right now, some private sector employers offer bonuses to employees when they leave to join the government. This bill would prohibit that,” wrote Clinton and Baldwin in a joint op-ed for the Huffington Post. “The private sector shouldn’t be allowed to ‘pay to play’ with their former employees. If you’re working for the government, you’re working for the people — not for an oil company, drug company, or Wall Street bank or money manager.”
The Democrats’ platform includes provisions instituting safeguards to protect against the undue influence of Wall Street in government, including clauses essentially mirroring the Financial Services Conflict of Interest Act.
“We will crack down on the revolving door between the private sector — particularly Wall Street — and the federal government,” the Democrats’ platform states. “We will ban golden parachutes for those taking government jobs. We will limit conflicts of interest by requiring bank and corporate regulators to recuse themselves from official work on particular matters that would directly benefit their former employers. And we will bar financial service regulators from lobbying their former colleagues for at least two years.”
What opponents say
Who opposes this bill? Statements by opponents are virtually impossible to come by, since the bill plays so well with the anti-Wall Street mood of the electorate at the moment. But neither the Republican-controlled Senate and House have yet allowed a vote on the bills, as the party generally opposes the creation of any new rules or regulations governing business or the private sector.
The Senate version has five cosponsors, no Republicans. Cosponsors including such famous progressive firebrands as Sens. Elizabeth Warren (D-MA), Kirsten Gillibrand (D-NY) who replaced Clinton in her former New York Senate seat, and Bernie Sanders (I-VT) who finished as runner-up to Clinton for the Democratic nomination. It’s been referred to the Senate Homeland Security and Governmental Affairs Committee, where it has yet to receive a vote.
The House version has 17 cosponsors, all Democrats. Only eight House Democrats endorsed Sanders over Clinton, and three of them are cosponsors: Reps. Tulsi Gabbard (D-HI2), Raul Grijalva (D-AZ3), and Keith Ellison (D-MN5). The bill has been referred to the House Financial Services Committee, where it also has not yet come up for a vote. Both the Senate and House versions were introduced in July 2015.