June 1, 2011
Last Friday, Goldman Sachs announced that it added former Senator Judd Gregg to its payroll as an international advisor. The New Hampshire Republican is the latest among Washington insiders who have moved from the Beltway to Wall Street and vice versa, a phenomenon that earned Goldman the moniker “Government Sachs.” Other notable ex-Goldmanites include former Treasury Secretary Henry Paulson, former White House Chief of Staff Joshua Bolten, New York Federal Reserve President William Dudley, and Commodities Futures Trading Commission chairman Gary Gensler to name a few.
The presence of former Wall Streeters in regulatory posts has led to a slew of conspiracy theories. Lately, more attention is being focused on former public officials heading to Wall Street. A recent study by the Project on Government Oversight found that since 2006, 219 former SEC employees joined 131 firms to provide advice related to SEC matters. Their new employers included law firms, accounting firms, consulting firms, and banks. In response to the study, Sen. Charles Grassley, R-Iowa, said, “The SEC’s revolving door seems to be more active than ever.”
Recent major changes in financial regulation likely make financial firms eager for the expertise of insiders with intimate knowledge of the regulatory process. It also helps to hire those with the political clout and connections to affect regulatory change.
Whether as full-time employees or part-time advisors, high-profile former public officials may offer significant value to financial firms. Some assume roles at multiple firms simultaneously. The bottom line is that these individuals are being hired widely in the financial services industry. Contrary to popular belief, hiring is not concentrated at Goldman Sachs as some would want you to believe.
Here are other firms that have hired public officials in the wake of the financial crisis.