I've been trying to put my finger on it, but when I read this story, it finally crystallized: How come we never hear about the White House making these little backdoor deals on our behalf? (Did I miss one?) How come we only get what's left over after the corporate interests have stuffed themselves? Like Lazarus, should we just be grateful for any crumbs that fall from the rich man's table?
The White House is intervening at the last minute to come to the defense of multinational corporations in the unfolding conference committee negotiations over Wall Street reform.
A measure that had been generally agreed to by both the House and Senate, which would have affirmed the SEC's authority to allow investors to have proxy access to the corporate decision-making process, was stripped by the Senate in conference committee votes on Wednesday and Thursday. Five sources with knowledge of the situation said the White House pushed for the measure to be stripped at the behest of the Business Roundtable. The sources -- congressional aides as well as outside advocates -- requested anonymity for fear of White House reprisal.
The White House move pits the administration against House Speaker Nancy Pelosi (D-Calif.), who told Barney Frank (D-Mass.) to stand strong against the effort.
"I met with the Speaker today and she said, 'Don't back down. I'll back you up,'" Frank, the lead House conferee, told HuffPost. "Maxine Waters is very upset, as are CalPERS and others."
Advocates said that the corporations fought the issue primarily over executive compensation concerns. Given proxy access, investors could rein in executive salaries. The Business Roundtable is a lobby of corporate CEOs.
Valerie Jarrett, a senior White House adviser and Obama confidante, is the administration liaison to the Business Roundtable.
What this means is, after promising proxy access to institutional investors, the White House has reversed its position. Instead, the new language requires that only those who own five percent of a corporation get a say in board nominations or corporate governance.
Even the largest pension funds don't come anywhere close to owning five percent of a major corporation. The biggest pension funds are more likely to hit the half-percent threshold in rare cases.
"I guess this is the way it works, but the sucker was like a bolt from the heavens. It came out of nowhere," said one advocate working on the issue.
Frank said that he wasn't certain the White House was involved. "There may be some sense that the White House -- I'll explain it this way: this affects, of course, not just the financial institutions, but all corporations and, yeah, I think there are some people in the White House who think, 'Well, we're fighting the financial institutions, but why fight with some of the others you know, the other corporations?' But all I can do is stand firm in our position, which we're doing. I think there may be some White House influence, but I don't really know. I would ask the Senate. It is interesting that they are reversing their own position," he said.
Backers of the underlying House and Senate language said that, as of last week, there was no indication that the provision would be stripped.
Because the conference committee deliberations are televised, a broad range of interested observers were able to watch corporate America gut the reform proposal live. On Thursday, Sen. Chuck Schumer (D-N.Y.) fought back, attempting to amend the language to strike the five percent requirement. It failed; the only Democrats to back Schumer in the vote were Pat Leahy (D-Vt.), Tom Harkin (D-Iowa) and Jack Reed (D-R.I.).
The SEC is planning to issue rules related to proxy access. Those rules would be made meaningless by the language currently being pushed.