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For obvious reasons, Wall Street is always right on top of any legislation in Congress that has anything to do with the world of finance.And, as you know, it’s not like Lloyd Blankfein is glued to C-SPAN. The Street has Washington watch-dogs that keep a careful eye on what’s happening on The Hill, but even they couldn’t do it without help.
At least, that’s what former lobbyist, Biden aide, and Senate staffer Jeff Connaughton writes in his new book, “The Payoff: Why Wall Street Always Wins.” The way he tells it, information has a bit of a journey before it gets from Washington to Wall Street, but it can happen in the blink of an eye.
From my lobbying days, I knew how the Banking Committee operated: staffers gave lobbyists information about bills being drafted or what one Senator had said to another (especially irresistible were scoops on the views of Chairman Chris Dodd or the ranking Republican, Senator Richard Shelby). The lobbyists passed the information on to their clients in the banking or insurance or accounting industry. The clients then forwarded a summary to their trade association or the Financial services roundtable. sometimes within an hour, the news would be e-mailed to the entire financial-services industry and all of its lobbyists.
With multiple leakers from the Banking Committee keeping K street well informed, the banking world had complete transparency into bill drafting, while Senators who didn’t serve on the Banking Committee stayed mostly in the dark.
And that, dear readers, is how a sausage is made.