Companies attempting to soften the final rules to be determined by regulatory agencies in the wake of finreg are recruiting lobbyists. And they're finding them in the form of ex-regulators: former Federal Reserve bankers, lawyers who used to work with the SEC and ex-employees from other financial regulatory agencies.
The New York Times reports that according to research by the Center for Responsive Politics, nearly 500 officials have moved between government financial bodies and the private sector -- 148 of them are now lobbying the government they used to represent.
Former regulators are in hot demand because they have connections and know-how that lobbyists who have not come from the public sector simply do not have. They get phone calls and e-mails returned, and they also often have greater credibility because of their government background. But the SEC's "revolving door" has come under scrutiny as a number of influential ex-agency lawyers were found to have too much influence over their former colleagues in issues involving the financial sector.
Under SEC regulations, senior employees who leave the public sector have to have a one year "cooling off" period when they cannot lobby the government on behalf of a private company.
Related: Feds Hiring Thousands in the Wake of Financial Reform Bill