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.
K-Street legal “cockroaches”: they come out in the dark and drag food into cracks in the wall and floor. There is no pride, they only look at the money extracted, not the eyes.
OOOH! A Fred C. Dobbs quote! The Treasure of the Sierra Madre can be considered a prescient film. America is fast sliding into the amoral cesspit that 1925 Mexico was portrayed to be in the film.
Influence peddling, under any name would be illegal in an honest system. I almost typed “sane system’ but realized, after reflection, that, from the insiders point of view, the present system is sane.
“Paging Sir Humphrey Appleby, GCB, KBE, MVO, MA (Oxon). Please pick up the courtesy phone.” (The Cousins wish to partake of a dash of your perspicacity.)
There is a name for this, and it is too close to the job hunting technique mentioned in the article, but it points to the same phenomena, the power network. People who wield power are in some relation with others actively engaged to get what they want on a regular basis, even in the face of opposition, organized opposition. Without being part of an active network of people working to maintain what they want or moving new initiatives into the public arena, you can’t accomplish much. The names of the Cantor staff, where they go,whether in government, right over to the new Majority Leader or out into the K Street cadre or into media, banking, military contracting, will be a revealing map of power groups and factions within groupings. The flow of personnel out of congressional staffs, into other organizations can reveal self sustaining power networks, the circulation from public to private sectors, and just how one specific set of policies come to dominate and become institutionalized, impervious to change. These power networks have to recruit, replace old or out of favor individuals, groom new talent, to ensure the constancy of policy, power over time. No better people to groom, than those who sat in the command and control position for the engine of law production, the congressional staffers who were witness to the legislative process and know the intimate details of vast passages of legislation because they wrote, edited and negotiated the compromises that resulted in the final language of the law. MSNBC’s Chris Mathews and Larry McDonald, to name 2, played just such a role and are able to express clearly,the process of legislating a law into existence and the tortured path such laws can take over time by bureaucratic implementation and real world administration. The influence on opinions that are formed by these two is invaluable to the government who have in them, full time paid interlocutors for policy positions that normally would only get sound bite duration on the evening network news broadcasts. It publicity you just can’t buy and it’s free.
Is the correction to the cesspool in DC simply cutting the budget of the senators and congressmen?
Maybe a million dollars a year for each office is too much and needs to be cut down to writing supplies and limited travel expenses.
Congressional staffs are much smaller now than they were in the 70s and 80s. Many of the remaining staffers are concentrated in public relations and strategy areas instead of the pure policy wonks that used to handle the heavy lifting in crafting legislation. I’m pretty sure that a reduction in office budgets would just accelerate the pace of the revolving door– a congressional office job is already seen as a stepping stone to more lucrative positions. It may be that only those with an independent income (spouse, personal/family wealth) will be the ones entering government service.
Otherwise, the pool of potential staff will come more from trade groups and the like, even for entry level staff gigs. If the value to lobby shops in having their tentacles wrapped around the legislative process is high enough (and it really is) then you might expect incoming staffers to receive large bonus payments from their previous lobbyist employers to live on during their sabbaticals in government service.
Tom, you’re right it has been that way at in the executive (white house) level for some time.
Perhaps through Friends of Democracy, an anti–super PAC super PAC that seeks to elect state and federal lawmakers who support public financing of elections, is a more realist approach.
Congressional staffs should be a lot smaller! After all, they are not doing any work. Congress is always on vacation!
No, absolutely not; the impulse is the same as that for term limits. With term limits up here in Maine, there’s no institutional memory except for lobbyists, who have tame lawyers write the bills. If you squeeze the balloon on the Hill side, it will just expand on the K Street side.
Staffers are miserably paid and badly treated, so it’s no wonder that even the most well-intentioned of them end up looking at the Hill as a way station, or turn into Flexians. I’m not sure what the answer is, but it might lie in paying them so well, and making their work so fun and interesting (and sure policy can be, at least at times, both) that enough of them see no reason to leave. Start thinking of “staffers” as a Civil Service. I realize that means a separation between staffers and campaign operatives, but maybe that’s a good thing. It seems to me that decreasing churn, rather than increasing it, is an answer.
On “Yes, Minister” Sir Humphrey is most definitely Sir Humphrey. But he isn’t Karl Rove, either.
Imho, we just need a new constitution. Everything else just seems like rearranging deck chairs on the Titanic. We’ve got major systemic flaws in our governance mechanism and tinkering around the edges is as unlikely to work any better now than it has in the past. I’d suggest looking at the original Pennsylvania constitution as a place to start:
but the constitution was written by jesus!
I don’t think the story is that Eric Cantor went to Moelis, it is that Eric Cantor didn’t get on with a major investment bank, a place with some job security. I have read that Moelis is going to be a two man show in mergers and acquisitions. Since mergers and acquisitions are an indicator of the final phase of the latest bubble, Cantor could be looking for a job again in a couple years. It is noteworthy that the big banks wouldn’t touch him. As for his staff, I would guess they will find jobs. Cantor will draw beads of sweat and cramp his hand writing recommendations for them.
This is an awesome post. You can’t split the pillars of the regime if you don’t know who the pillars of the regime are, and what their values and interests are. More later.
Networking: The cancer that is killing professionalism.