With the news today that former Securities and Exchange Commission Chair Mary Schapiro is taking a job at Promontory Financial Group, another powerful former regulator is headed to a lobbying and consulting firm to help thwart regulation of the people she used to prosecute. While you might have thought that the near-collapse of the financial system four years ago, which was largely due to regulatory failure by the SEC, would have brought about reforms to prevent such inlfuence peddling to continue, you would have been wrong.
"In my case, there's no revolving door…I won't ever be going back to government," the 57-year-old Ms. Schapiro said in an interview with The Wall Street Journal, which broke the news.. She decided that after spending "28 of the last 32 years as a regulator," now was the "right time…to do something different," WSJ reported.
The risk-management, regulatory and compliance consulting firm says that Schapiro will serve as a managing director and chairman of its governance and markets practice, according to The Washington Post.
Federal regulation of everything from autos to securities is corrupted by former regulators who switch sides, and Schapiro's new position is a continuation of that decades-old tradition. While it is accepted in Washington as business as usual, it quietly corrupts American government.
Promontory represents Wall Street. Since Schaipro only left the SEC four months ago, she knows how the agency works and its most infliuential players. She will be an effective consultant but there ought to be a law preventing former regulators to play the angles the outside world does not know even exists in order to help the people they once regulated escape, minimize and evade effective government regulation.