The Power Brokers

  1. Who's Who
    1

    Who's Who

    Some are well known like Senator Charles Schumer, but others like White House
    regulation czar Cass Sunstein are not exactly household names. Here are
    fifteen regulators, lawmakers, and lobbyists shaping the torrent of government
    regulations.

  2. Cass Sunstein
    2

    Cass Sunstein

    Office of Information and Regulatory Affairs

    How do you quiet one of the most prolific and provocative legal scholars in the country? Hand him a portfolio in the Obama Administration that covers nearly every interaction the federal government has with individuals and businesses.

    Before he was named the White House’s regulation czar, Cass Sunstein, a Harvard law professor and co-author of the best-selling behavioral economics manifesto Nudge, opined on everything from promotion of energy conservation to the possibility of permitting lawsuits on behalf of animals. His championship of submitting proposed regulations to rigorous cost-benefit analysis stirred anxiety on the left that he would thwart environmental and other measures. On the right, there were suspicions his behavioralist impulses would foster a manipulative nanny state, leading Fox News commentator Glenn Beck to dub him “the most dangerous man in America.” In office, he’s become one of the least visible members of the Obama Administration.

    The result: The Administration has been missing a potentially powerful voice to counter complaints from business groups that new regulations are overburdening the economy, though Obama stepped into the void on Jan. 18 with an op-ed in The Wall Street Journal. Because of concern on the President’s communications team about Sunstein’s blunt manner and controversial writings, “Cass is being muzzled,” says someone who has worked closely with him. “The harm from that is no one knows that the cost-benefit comparison for the first year of the Obama Administration is way better than for the first year of other recent Administrations.”

    Office of Management and Budget spokesman Kenneth Baer says Sunstein has hardly been silenced, with four speeches posted on the White House website. Sunstein granted a rare interview to Bloomberg Government.

    Environmentalist critics such as Rena Steinzor of the Center for Progressive Reform say his Office of Information and Regulatory Affairs has weakened regulation, citing its insistence that the Environmental Protection Agency consider the nebulous “stigma” cost should coal ash be classified as hazardous waste. Still, New York University law professor Michael Livermore says Sunstein’s office has been just as assiduous in calculating potential benefits, allowing an economic case in favor of regulation. Efforts to quantify costs of asthma cases, premature deaths, and lost workdays have been used to justify new clean air regulations and a “social cost of carbon” the Administration calculated for action on global warming, Livermore says.

    The Administration estimates new regulations issued in its first year produced a net economic benefit of $3.1 billion, vs. net costs of $400 million in Bill Clinton’s first year and $300 million in George W. Bush’s. “When we’re imposing big expenses,” Sunstein says, “we want to make sure we’re creating even bigger benefits.”

    Sunstein’s imprint has extended beyond mere number crunching. Ideas he championed as a behavioral economics advocate on the importance of disclosing information in readily understandable form are surfacing in the regulatory world. Among them is a proposal to include letter grades in automobile fuel efficiency ratings. “We’re interested in providing information in a way that’s clear and intelligible,” he says. Likewise, his office has promoted disclosure of data over the Internet to ease access. A smartphone application available from apps.gov now allows consumers to get the latest recall information on products simply by photographing the bar code on an item.

    Sunstein also is trying to encourage software developers to come up with consumer-friendly ways to make use of the information the government collects. Acting on an idea championed in Nudge, he’s pressed agencies to release data in a standardized format, with more than 300,000 data sets now on data.gov. “There are large numbers of apps that are coming from what we’ve disclosed,” he says. One that’s already online is flyontime.us, developed by the nonprofit Sunlight Foundation, which tracks on-time flight performance. Not only is the information useful to fliers, he says, but it also has a regulatory impact: “It creates a kind of incentive to be on time.”

    As Republican control of the House shifts efforts to move Obama’s agenda forward from passing laws to implementation of the last session’s regulatory victories, Sunstein’s influence is likely to grow. His visibility is another matter. ——Mike Dorning
  3. Senator Charles Schumer
    3

    Senator Charles Schumer

    Democrat, New York

    Chuck Schumer is a walking contradiction. He’s “the senator from Wall Street,” raising more money ($2.5 million) from the securities and investment industry in the past two years than any other member of Congress and driving the $700 billion bailout for “too-big-to-fail” banks. The Brooklyn-born politician is also the author of Positively American, a book that introduces Joe and Eileen Bailey, an imaginary two-child couple from Long Island that Schumer created as his archetypal middle-class family. “They were the reason I had entered public service,” writes Schumer. “Wherever I go, they are always at my side.” The New York Senator’s working definition of the middle class is an elastic one: Last month he voted to preserve the Bush-era tax cuts on a couple’s first $1 million of income.

    Now in his fourth decade of congressional service, Schumer loves the limelight and doggedly promotes his ideas in a stream of press statements and Sunday news conferences. It’s not for nothing that former Senate Majority Leader Bob Dole once wisecracked that the most dangerous place in Washington was the space between Schumer and a television camera.

    Schumer’s penchant for publicity is matched by his skills as a guardian of his twin constituencies. He’s both a prodigious fund-raiser and a master at identifying issues that resonate with the middle class. One of his causes: increasing the tax-deductibility threshold for college tuition.

    Schumer’s allegiance to Wall Street is not slavish. He voted for the Dodd-Frank financial overhaul law and is pressing the Securities and Exchange Commission to place curbs on so-called high-frequency trading, the practice of using mathematical algorithms for computerized transactions. “When Wall Street comes in conflict with Main Street, I tend to side with Main Street,” he told Bloomberg News in 2009. “When Wall Street comes in conflict with other entities, large entities, overseas or elsewhere, I try to help New York, at least when I think they’re right.”

    As the third-ranking member of the Senate’s majority party, Schumer will shape and promote Democratic priorities in the new Congress. He’ll resist Republican attempts to chip away at the health-care overhaul as well as efforts to cut funding for the SEC. “If you talk to most people in the markets in both New York and Chicago,” he told reporters on Jan. 6, “they want a strong SEC so the bad guys don’t dominate the markets.” ——Greg Giroux
  4. Kirsten Chadwick
    4

    Kirsten Chadwick

    Fierce, Isakowitz & Blalock

    You won’t find her name on a plaque at the entrance of the D.C. lobbying shop. She’s not on the firm’s letterhead. What Kirsten Chadwick may soon have to show for her skills of persuasion is a U.S.-South Korea free-trade pact. Chadwick, a lobbyist at the boutique Republican firm Fierce, Isakowitz & Blalock, is an expert on trade and the treaties that underpin it. She’s seen as a superb vote counter in Washington, tracking the ever-changing yeas and nays on Capitol Hill and knowing when a lawmaker is just being polite—or actually promising a vote. “These abilities get noticed,” says Rogan Kersh, a New York University professor who studies lobbying.“ Chadwick … can find herself sought out during pivotal moments ... by Republican congressional leaders, a position every lobbyist dreams of.” 

    Chadwick represents an array of companies, from Ford to Home Depot to ­JPMorgan Chase, that are rooting for a U.S.-South Korea pact. Trade deals dictate the rules both countries must adopt on patents, banking, and telecommunications. With almost $68 billion in trade involved, the deal would be the largest for the U.S. since Nafta in 1994, the pact on which Chadwick began earning her reputation. Once again she’ll spend a lot of time in the offices of House members trying to secure their votes. “It’s not really even lobbying at this point. It’s education,” she says, referring to Congress’ 100 new members. 

    Chadwick started out as an intern in President George H.W. Bush’s congressional liaison office. Her boss, Nicholas E. Calio, was so impressed with the 22-year-old that he brought her to his lobbying shop. The pair returned to the White House under George W. Bush, with Chadwick serving as primary contact with the House Ways and Means Committee, which writes tax laws and approves trade deals. 

    Chadwick was so involved in passage of the controversial Central American Free Trade Agreement six years ago that newspapers mistakenly reported she was on the House majority whip’s staff. 

    In recent years, Fierce, Isakowitz resisted adding Democrats. The firm’s deep relationships with Republicans leaders now back in power in the House, boost the odds of the deal with South Korea becoming law by midsummer.

    ——Alison Fitzgerald

  5. Bill Paxon
    5

    Bill Paxon

    Akin Gump Strauss Hauer & Feld

    Why He Matters: The former GOP congressman from New York works for the second-biggest U.S. lobbying firm by revenue. 

    Top Clients: Boeing, Caesars Entertainment, Fluor

    Measure of Influence:
    Close to Speaker John Boehner (R-Ohio), with whom he served in leadership the last time the Republicans controlled the House. 

    Works With: Former Health and Human Services Secretary Tommy Thompson.

    Political Clout: Several House Republicans owe their elections to the former chairman of the National Republican Congressional Committee, who helped bring the party to power in 1995. 

    Quote About: “Paxon’s experience as having been in the leadership of the Republican Congress when they took over the last time makes him a valuable resource.” —Wayne Berman, Republican lobbyist

    Setting Sights On: Health care, financial regulation, farm bill.

    Campaign Donations (2010): $38,600

    Firm’s Lobbying Income (2010): $27.4 million.
  6. Senator Richard Shelby
    6

    Senator Richard Shelby

    Republican, Alabama

    Business Cred: Sits on both the Appropriations and Banking Committees; had $17.1 million in campaign cash on Nov. 22, tops in the Senate.

    Power Center: He’s the top-ranking Republican on the Banking Committee.

    Sound Bite: “Fannie Mae and Freddie Mac have already cost taxpayers $150 billion. Absent a strong regulator, future losses could be even greater.”

    Quote About: “He may be slow. He may be cautious. He may be frustrating. But once he makes the deal, it happens.” —Former Senator Christopher J. Dodd (D-Conn.)

    Big Win: Worked with Dodd on 2008 housing overhaul law to stem foreclosures and prop up Fannie Mae and Freddie Mac. Was lead sponsor of 2003 law that incorporated identity theft protections, including a provision to allow consumers a free credit report annually.

    Top Donor: Travelers: $108,250 (2005-10)

    Setting Sights On: Dodd-Frank financial regulations, housing, oversight of the Fed, China’s currency practices.

  7. Ed Mierzwinski
    7

    Ed Mierzwinski

    U.S. Public Interest Research Group

    Why He Matters: An expert on consumer issues, he helped lead a coalition of public interest groups pushing for stronger financial regulation.

    Measure of Influence: Helped enact the 2008 consumer product safety law.

    Works With: U.S. PIRG was part of a pro-banking-regulation coalition with the AFL-CIO, AARP, and the Service Employees International Union, among others.

    Political Clout: Founded by Ralph Nader, U.S. PIRG is active in 47 states.

    Quote About: “When you think of consumer protection, Ed Mierzwinski is who you think of.” —Lisa Gilbert, deputy director, Public Citizen’s Congress Watch

    Setting Sights On: Federal agencies writing the regulations required under the new banking law.

    Campaign Donations (2010): $0

    Lobbying Expenses (2010): $317,000.

  8. Robert S. Khuzami
    8

    Robert S. Khuzami

    Securities and Exchange Commission

    Business Cred: The former federal prosecutor helped convict the “Blind Sheikh” for the 1993 bombing of the World Trade Center; later became general counsel for the Americas at Deutsche Bank.

    Power Center: Director of enforce­ment at the SEC, which has 13,000 employees nationwide.

    Sound Bite: “There will be a heavy price to be paid if firms violate the principles fundamental to our securities laws—full disclosure, honest treatment and fair dealing—and those principles do not change, even if the product is complex or the investor is sophisticated.”

    Quote About: “He’s a hard-nosed prosecutor with real Wall Street experience who understands how the industry works. He’s determined to get the biggest bang for the SEC’s limited resources.” —Stephen J. Crimmins, former SEC attorney, now partner at K&L Gates

    Big Wins: Last year’s $550 million settlement with Goldman Sachs, the agency’s largest penalty ever against a Wall Street firm.

    Setting Sights On: Insider trading at hedge funds.

  9. Senator Mark Warner
    9

    Senator Mark Warner

    Democrat, Virginia

    Business Cred: Venture capitalist and co-founder of Nextel Communications, now Sprint Nextel Power Center: Sits on the Banking, Housing, and Urban Affairs Committee and the Commerce, Science, and Transportation Committee.

    Sound Bite: “I am drafting legislation that would require federal agencies to identify and eliminate one existing regulation for each new regulation they want to add.”

    Quote About: “Warner claims the cost of regulation has kept the U.S. business community from participating more fully in our nation’s economic recovery. This is basically the same baseless argument that Ronald Reagan used to attack regulation.” —Sidney Shapiro, law professor, Wake Forest University

    Big Win: On Jan. 4, Obama signed into law a Warner proposal requiring federal agencies to produce strategic plans and identify their top regulatory priorities.

    Top Donor: Altria: $79,418

    Setting Sights On: Regulatory “pay as you go” proposal, telecommunications.

  10. Michael R. Bromwich
    10

    Michael R. Bromwich

    Bureau of Ocean Energy Management, Regulation, and Enforcement

    Business Cred: A former litigation partner at Fried Frank, where he represented defendants in white-collar crime and regulatory cases.

    Power Center: Director at BOEMRE, which oversees offshore oil and natural gas drilling.

    Sound Bite: “Guess what: Macondo happened, people died, people realized that there were deficiencies in the safety regime.”

    Quote About: “Mr. Bromwich is the profitability gatekeeper for the industry. He’s a tough regulator who is determined to protect the interests of those who would prefer to limit production from the Gulf.” —Ted HarperFrost Investment Advisors 

    Big Wins: Hasn’t issued a deepwater drilling permit since the White House lifted its moratorium in October.

    Setting Sights On: Ending what Obama called the “cozy relationship” between regulators and oil companies.

  11. Richard E. Wiley
    11

    Richard E. Wiley

    Wiley Rein

    Why He Matters: The former Federal Communications Commission chairman runs the largest communications law practice in the U.S.

    Top Clients: AT&T, CBS, Gannett.

    Measure of Influence: Members of his firm were among those meeting with FCC officials in advance of the commission’s net-neutrality vote.

    Works With: Jan W. Baran, former counsel to the Republican National Committee and President George H.W. Bush’s 1988 campaign. Robert Walker, former staff director and chief counsel of House and Senate ethics committees.

    Political Clout: Chaired the FCC’s advisory committee on advanced television service.

    Quote About: “He’s the godfather of digital television.” —Dennis Wharton, spokesman for the National Association of Broadcasters

    Setting Sights On: Wireless spectrum allocation, media ownership, cable-broadcast agreements on retransmission.

    Campaign Donations (2010): $14,650

    Firm’s Lobbying Income (2010): $3.5 million.

  12. Donald M. Berwick
    12

    Donald M. Berwick

    Centers for Medicare and Medicaid Services

    Business Cred: While president of the nonprofit Institute for Healthcare Improvement, he helped hospitals cut down on medical errors and improve treatment of chronic illnesses.

    Power Center: Runs Medicare, the federal health program covering more than 46 million elderly and disabled, and helps administer Medicaid, which covers low-income Americans.

    Sound Bite: “It is politically correct, and widely believed, to say American health care is the best in the world. It is not.”

    Quote About: “He is now the poster boy, unfortunately, for overregulation and government mandates and government takeovers and pouring out regulations and so forth that, according to his plan, will ‘cure’ health care.” —Senator Pat Roberts (R-Kan.)

    Big Wins: Established a $10 billion innovation center authorized by the health-care law to experiment with new ways to pay for care.

    Setting Sights On: Implementing new regulations on insurers as part of the health-care overhaul. Winning Senate confirmation before his recess appointment expires at year’s end.

  13. Thomas Hale Boggs Jr.
    13

    Thomas Hale Boggs Jr.

    Patton Boggs

    Why He Matters: Son of the late Democratic House Majority Leader Hale Boggs

    Top Clients: Bristol-Myers Squibb and Legg Mason

    Measure of Influence: On behalf of clients such as Mars Inc., he helped obtain a cut in the tax on multimillion-dollar estates.

    Works With: Former GOP Senate Majority Leader Trent Lott

    Political Clout: Boggs is partner in the biggest U.S. lobbying firm by revenue.

    Quote About: “He’s smart, trustworthy, and immensely persuasive.” — Democratic lobbyist Jack Quinn

    Setting Sights On: Tax code overhaul, new U.S. Commodity Futures Trading Commission and SEC rules required under the financial reform law.

    Campaign Donations (2010): $103,100 (all in this section are personal contributions)

    Firm’s Lobbying Income (2010): $30 million (all income figures in this section are for Jan.-Sept.).
  14. Jon Leibowitz
    14

    Jon Leibowitz

    Federal Trade Commission

    Business Cred: Former chief counsel for Senate antitrust subcommittee. Ex-lobbyist for the Motion Picture Association of America.

    Power Center: Chairs the Federal Trade Commission, which has the power to act against anticompetitive business practices.

    Sound Bite: “Despite some good actors, self-regulation of privacy … is not working adequately for American consumers. We deserve far better from the companies we entrust our data to.”

    Quote About: “He’s very good at identifying novel issues that really benefit consumers, and really pushing those issues so they become part of our national agenda.” —Pamela Jones Harbour, former FTC commissioner

    Big Win: Reached settlement with Intel to prohibit the use of threats, retaliation, or exclusive deals to block customers from buying competitors’ products.

    Setting sights on: “Do Not Track,” a mechanism allowing consumers to say they don’t want their online behavior and data collected or used in targeted advertising.

  15. Mary D. Nichols
    15

    Mary D. Nichols

    California Air Resources Board

    Business Cred: Argued test cases in the 1970s under the federal Clean Air Act and California air quality laws.

    Power Center: Only the Environmental Protection Agency has greater regulatory authority.

    Sound Bite: “We’re proceeding to use our authority to set emissions standards. [The National Highway Traffic Safety Administration] is trying to take that away. They can’t.”

    Quote About: “She’s one of the most important people you’ve never heard of.” —Josh Margolis, CEO of CantorCO2e

    Big Wins: Helped establish first-in-the-nation program to cut greenhouse gases.

    Setting Sights On: Pushing automakers and others to use technology to curb emissions.

  16. Rep. Fred Upton
    16

    Rep. Fred Upton

    Republican, Michigan

    Business Cred: Grandfather helped found appliance maker Whirlpool, the largest employer in his district.

    Power Center: Chairman of the Energy and Commerce Committee.

    Sound Bite: “The Obama Administration is on notice. They will not be allowed to regulate what they have been unable to legislate.”

    Quote about: “Claims of being a Reaganite notwithstanding, there is nothing in his voting record to suggest he would be an aggressive opponent of Obama’s plan to impose cap-and-trade through regulation.” —Washington Examiner editorial

    Big Win: Co-sponsored a 2006 law increasing fines for broadcast indecency violations.

    Top Donor: EnergySolutions: $38,800

    Setting Sights On: National energy policy, telecommunications, nuclear energy, health care.