K Street Files: Lobbyists Exorcised Over Bailout Plan

Posted September 22, 2008 at 6:52pm

As Congress and administration officials scramble to come up with a plan to salvage the ailing financial world, lobbyists for banks and other financial services firms are gearing up for an unprecedented week of 24/7 activity. Already, lobbyists, not surprisingly, have found proposals to pick apart.

[IMGCAP(1)]For starters, the industry has targeted an effort by Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) to revamp bankruptcy law to allow judges to change the terms of borrowers’ mortgages.

Supporters say the idea could help some homeowners who would otherwise go into foreclosure to stay put. But banks and lenders argue it would harm the economy, the very thing lawmakers are trying to fix.

“Bankruptcy is such a divisive issue in this debate, and resurrecting bankruptcy right now is completely unproductive,” said Francis Creighton, vice president and chief lobbyist with the Mortgage Bankers Association. “This bill we are

talking about is not a mortgage bill, not a housing bill. It’s supposed to address the threats to the entire economy.”

He added that the bankruptcy provision could end up “stalling this very necessary and needed bill.”

Scott Talbott, senior vice president of government affairs with the Financial Services Roundtable, takes the same view when it comes to the bankruptcy provision. His association is also concerned about measures that would put limits on executives’ compensation as well as a proposal that could allow the U.S. government to exercise stock options in bailed-out firms.

“We will work with all interested parties to voice our opposition,” Talbott said. “We support the bill and support getting the bill done quickly. We support giving Treasury broad authority to allow it to send assistance where it’s needed. But we have significant concerns with the limits on executive comp as well as inclusion of the bankruptcy provision.”

Not all lobbyists believe the Dodd bankruptcy provision is the real deal. One industry advocate, who would speak only on background, said he believes it was floated for purely political purposes. “No one’s taking Dodd seriously,” this lobbyist said, adding that this week promises an insane schedule for lobbyists in the sector.

“Everybody’s chasing down rumors,” the lobbyist said. “We’re worried about everything. … It’s a one-week marathon, not a sprint.”

Added an in-house lobbyist with a financial services firm: “Never in all my life have I had to work like this. Things are moving so fast. We are getting documents at 4 o’clock in the morning.”

K Street Moves. Speaking of the financial services world, just in time for that marathon week of lobbying, the Securities Industry and Financial Markets Association has added a new legislative affairs managing director. Cory Strupp, the former deputy director and general counsel at the American Bankers Association, will report to Michael Paese, SIFMA’s new executive vice president of global advocacy.

From 1984 to 2003, Strupp worked in-house for JP Morgan.

• Holtzman Vogel has tapped Tom Josefiak, a former chief counsel at the Republican National Committee and Federal Election Commission chairman, to join the firm. Josefiak will be a partner at Holtzman Vogel, which specializes in lobbying and campaign finance compliance. Most recently Josefiak served as of counsel to the 2008 Republican National Convention in St. Paul, Minn.

• The Washington Metropolitan Area Transit Authority and the Metropolitan Washington Airports Authority have new top lobbyists. Sarah Kline, who spent the past eight and a half years as a Democratic counsel on the Senate Banking, Housing and Urban Affairs Committee — which has jurisdiction over mass transit — is WMATA’s new director of policy and government relations. Kline replaces Deborah Lipman, who on Oct. 6 becomes MWAA’s new manager of governmental affairs. MWAA is expected to be the lead authority when an eventual rail line to Dulles airport is built.

T.R. Goldman contributed to this report.

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