Eric Cantor and the Revolving Door Between Government and Business

Eric Cantor was shockingly defeated in a primary for his seat in Congress and promptly resigned before his term was up, leaving his district without representation until January. But do not weep for him. He’s now got a cushy job as vice president of an investment banking firm, a field he has zero experience in, with a salary in the millions. What will he be doing? Selling his influence on Capitol Hill, of course.

The ousted House majority leader and longtime friend of the financial industry is joining Moelis & Company as a vice-chairman. His paycheck? At least $1.6 million in 2015, plus a million-dollar signing bonus. His duties? To “compete for business and advise corporate and investor clients on takeovers and other deals,” according to The Wall Street Journal. But I get the feeling that won’t be all Cantor will be doing, given his relationships on the Hill and total lack of investment-banking experience.

But how does influence-peddling work in 2014? What do these politicians really do when they end up on Wall Street? To shed some light on those questions, I spoke this morning with Dennis Kelleher. He’s a former corporate lawyer and longtime Senate staffer who now heads the nonprofit Better Markets, the banking lobby’s lonely public-interest opposition in Washington.

You hire an Eric Cantor. What do you expect him to get up to?

“Let’s look at Cantor’s résumé. Let’s look at all his investment-banking experience. Let’s look at his capital-markets experience. He has none. He has no experience or skills that would qualify him to be even an intern at a fifth-tier firm in the financial industry. I mean, come on! I love the spin. They’re pushing back this morning. They’re saying, ‘This is really different! This isn’t like everybody else.’

“But Wall Street always goes with the sure bet and the well-worn path. They’re paying him a guaranteed — you’ve got to love Wall Street, you guarantee money because you can’t fail on Wall Street — they’re guaranteeing him $3.8 million. You don’t guarantee someone $3.8 million because you’re training him to be an investment banker.

“Wall Street is after what it’s always buying in Washington: access, influence, and unfair advantage. And Cantor is a big catch for anybody who wants access. Look, if you’re in congressional leadership for X number of years, you know plenty that’s worth a lot of money. If you’re the majority leader, who’s in charge of the agenda and vote counting? One of your jobs is to make sure you’re doling out favors to people. There are dozens and dozens of House members indebted to Eric Cantor for the things he’s done for them. You’re worth a lot.

“In addition, Eric Cantor knows why some things got done and other things didn’t get done. He knows why someone voted for or against a bill or amendment. He knows how to strategically target everybody in the House on the issues that anybody cares about in a way that’s close to unique. He’s not going to crudely do it in a way that puts the scarlet-L lobbyist on his lapel. He and the rest of the influence peddlers at the highest level of government work the shadows and do indirectly what the law prohibits them from doing directly.”

This is how our political economy works, folks. There is a revolving door between the government and the corporate world, which allows those who are well connected to sell the influence and access they have to the highest bidder.

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  • http://www.holytape.etsy.com holytape

    We really ought to pass a law that prohibits elected officials, their staff, any politically appointed government official or any government employee on the Executive Schedule from becoming a lobbyist for at least five years after leaving their position. Also, former congressmen and their staff should have no more access to congressional facilities than the average citizens.

  • StevoR : Free West Papua, free Tibet, let the Chagossians return!

    Eric Cantor was shockingly defeated in a primary for his seat in Congress and promptly resigned before his term was up, leaving his district without representation until January. But do not weep for him.

    No danger of that at all.

    Last time I wept was when my last dog died ’bout five or even eight years ago now.

    I didn’t quite cry when Gillard lost or Rudd – sure won’t cry over that turd getting the well-deserved booting out he got.

  • John Pieret

    a field he has zero experience in, with a salary in the millions. What will he be doing? Selling his influence on Capitol Hill

    No! Not at all! They hired him because he cleverly got himself defeated so he could take a job paying 3 times+ what he was making before! Such business acumen is hard to come by!

  • http://en.uncyclopedia.co/wiki/User:Modusoperandi Modusoperandi

    Um, it’s a little thing called “the Meritocracy”, Ed. And all that money and power means that he’s more important, intelligent and moral than us Common Folk. Plus, he’s a Job Creator now, and as such we must bow the knee to him and fight to cut his taxes and repeal Dodd-Frank.

    If us Bible Believing Patriot Libertarian Tea Partiers had known he was a Job Creator, we’d have never pushed him out. I can only assume he didn’t tell us he was a Paragon of the Free Market because he was too busy Saving Capitalism from Socialists and Marxists like the Democrat party and, inevitably, his replacement, the Ivory Tower Egghead Dave Brat.

    So, the good news is in a couple of years, after Brat has settled in to Washington’s Big Government style, we will happily welcome Cantor back to primary Brat, and then once we elect him we’ll go back to distrusting him, and then primary him and push him out again.

  • Michael Heath

    I’m currently reading Tim Geithner’s Stress Tests. I’m confident it’ll be the best book I’ll read this year. I’m really glad I read the bio on Paul Volcker first to be fresh on past collapses that required energetic responses from the Fed and government.

    One of the best aspects of this book is how the technocrats in government interface between policy makers and the financial sector during a crisis. It’s both incredibly insightful but also frustrating – what could have been . . .

  • Crimson Clupeidae

    Working as intended.

    Unfortunately for the 99%.