By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen
The age of the Hot Take has also infected the financial press, as it seems like every media outlet had to feature some hastily arranged opinion piece this week on former House Majority Leader Eric Cantor becoming a vice chairman at boutique investment bank Moelis & Co. And everyone played to type. Business Insider went for the bling by totaling up his $3.8 million pay package; The Guardian’s Heidi Moore made comparisons to other recent political expats who decamped to Wall Street; The New Republic delivered some snark about Cantor being underpaid; The National Journal talked their book by focusing on ethics transparency rules; HuffPo aggregated Elizabeth Warren’s Hot Take.
Warren claimed in the interview that people like Cantor “head straight out into the industry, not because they bring great expertise and insight, but because they’re selling access back in to their former colleagues who are still writing policy, who are still making laws.”
That’s right, though not quite right. I thought Better Markets’ Dennis Kelleher laid it on a bit thick to New York Magazine’s Annie Lowrey when accusing Cantor of getting hired to be a lobbyist without portfolio. Matt Levine was correct to say that it’s more like Cantor was a way for Moelis to build their brand by snatching a client-attracting Important Man in an Important Suit:
The core skill for senior bankers is having people pick up the phone when you call them. There’s a famous list of commandments for senior Goldman Sachs bankers that pretty much sums up the business. The most cringeworthy, yet also most self-aware, commandment is No. 8:
Important people like to deal with other important people. Are you one?
Cantor is there as a show of importance. Important people like to deal with other important people, and every important person Moelis hires makes it more likely that other important people will deal with them. Important people with important piles of money to be spent on important advisory fees.
Yes. But Levine is being deliberately obtuse if he’s denying that there won’t be at least a fair amount of political intelligence involved. The tell is that Cantor will “open a new office for the firm in Washington,” and split his time between there and New York. There’s no other reason to do that if he’s not to pick up signals on policy shifts and make them known to clients. They may not be in the regulatory arenas Kelleher mentioned, but surely in the regions of mergers & acquisitions, antitrust laws, and/or other areas where Moelis operates or is looking to grow.
But Cantor keeping one foot in D.C. actually speaks to what we should really look out for when it comes to his departure: where his staff relocates. Sen. Warren surely knows that Cantor’s colleagues are not “writing policy” or “making laws.” Neither did Cantor in his tenure. His underlings do it. The key policy aides actually author the laws, and interact with other staffers, and know far more about the inner workings at the Capitol than anyone really lets on. (Perhaps the only time I’ve ever seen this captured was not by a news outlet, but the Armando Iannucci movie In The Loop, when Malcolm Tucker meets with the young kid at the White House who he assumes is an intern, but is actually directing policy.)
As it happens, ex-Cantor aides currently litter K Street lobby shops, working for the American Bankers Association, the Financial Services Forum, PhRMA, and major firms like the Glover Park Group, Capitol Counsel, Alcalde & Fay and Blank Rome Government Relations. These ex-staffers lobby on behalf of such corporations as Expedia, Comcast, Best Buy, Blackstone, Citigroup, General Motors, T-Mobile and Halliburton, to name a few.
There’s a fair amount of debate about whether these lobbyists have lost power now that the Majority Leader has moved on, and whether the current crop of ex-Cantor staffers will be able to hook on. But I don’t buy it. K Street values former high-level Congressional aides, not just for their contacts with their old boss, but for their contacts with other offices, other staffers, ex-lobbyists who rotated back to Congress, and on and on. That’s especially true with a Majority Leader staff, who must interact with virtually every office in their caucus. Yes, the endless gridlock in Congress has crashed K Street budgets to some extent. But a policy aide for the ex-Majority Leader is going to be able to arrange a safe landing. The fact that a number of Cantor expats have already moved over to Majority Leader Kevin McCarthy and Majority Whip Steve Scalise’s office makes the ones who head to K Street that much more valuable.
We know some of these staffers are looking for work. Cantor’s chief of staff Steven Stombres reportedly held a conference call the same night Cantor lost his primary, assuring everyone that they would get the best placement he could find them. Stombres himself got calls for jobs within two days of the loss. “Certainly the folks that are closest to the king will be the most valuable,” said one K Street headhunter. “Everybody knows that Cantor guys are to be taken care of,” said another insider.
Stombres already announced that he was leaving Capitol Hill. And Rory Cooper, Cantor’s former communications director, was picked up by Purple Strategies, a top D.C. public relations shop. Others in demand – like top health care aide Cheryl Jaeger, financial policy aide Aaron Cutler and deputy chief of staff Doug Heye – haven’t chosen their next employer yet.
This how-to guide for these lobbyists-to-be is particularly unseemly:
“A lot of these folks will have to be able to advocate on their own behalf, call in the chits they’ve been accumulating and cash them in,” said K Street recruiter Julian Ha of Heidrick & Struggles.
Ha added that Cantor aides, or anyone else in a similar boat this cycle ought to think about the lobbyists who have visited them through the years and create a target list of potential job opportunities […]
“Set up those coffees,” Ha said. “The three rules of finding your next job: network, network, network. It takes a little bit of shoe leather and a lot of rejection to ultimately get to the source who will then lead you to the lead.”
These jobs range from $250,000 to $750,000 just to start.
This tends to sound like inside baseball, but if you want to understand the Washington influence factory, you have to start by knowing that staffers run the show, to what the layman would consider an uncomfortable degree. The revolving door is much easier to negotiate for these folks because it happens outside the public eye. But it matters when a staffer with deep experience starts advocating for Citigroup or Blackstone. It matters for the laws that get written and the priorities that get set.
Whether Eric Cantor makes a bunch of money because M&A clients get stars in their eyes when he calls them up means nothing to me. But where Steven Stombres lands? That’s actually important.