Mutual-Fund Group Balances Its Political Books

By Judy Sarasohn
Thursday, December 14, 2006

What a difference a midterm election makes -- or so it seems at some firms and trade groups scurrying to bolster their bipartisan credentials. But the folks at the Investment Company Institute, the trade association for the mutual fund industry, say their recent Democratic hire just maintains the status quo.

ICI snagged James R. Hart, a 30-year veteran of the Hill and most recently chief of staff to Rep. Carolyn McCarthy (D-N.Y.). He's the group's new political affairs officer and will also be involved in lobbying. He succeeds Democrat Vivian Lausevic, who moved over to the American Gas Association.

The hiring of Hart raised some eyebrows, because the ICI in 2003 was subject to some mighty political pressure from Rep. Michael G. Oxley (R-Ohio), chairman of the House Financial Services Committee, to replace Democrat Julie Domenick, then executive vice president, with a Republican.

ICI never ousted Domenick, though it did hire Daniel F. C. Crowley, earlier general counsel to House speaker Newt Gingrich (R-Ga.), as chief government affairs officer. Domenick eventually left to join a Republican-led firm, but the ICI has been a client of hers since 2004 and remains so, now that she recently opened her own shop, Multiple Strategies.

Crowley said in an interview yesterday that the government affairs office is bipartisan: three Republicans and three Democrats. He said ICI had started talking to Hart before the election.

"My role is not to support the majority," Crowley said, "but to be able to put together a majority of support for our issues -- and bipartisanship is a requirement."

Limits to Divine Intervention

Law firms and lobby shops like to sign up big names from the administration and Capitol Hill. The higher up, the more access and influence one at least appears to have. There is a problem: Such higher-ups are barred by ethics rules from lobbying or contacting former colleagues for a year.

Robert C. Divine has left his job as U.S. Citizenship and Immigration Services chief counsel-- he also served as acting director and acting deputy director -- and rejoined Baker, Donelson, Bearman, Caldwell & Berkowitz law firm, but he foresees no problem with the ban. Divine said the one-year "cooling off period" doesn't apply to him because he voluntarily avoided the salary levels that triggers it. He is still covered by restrictions on matters he was directly involved in and confidential information.

"I am truly grateful for the unexpected opportunity to serve among the impressive men and women in USCIS and related agencies. But immigration law is what I did for 18 years before I entered government," he said in a statement. "I could not afford to leave government and then be unable to work for a year."

Divine, who is leading the firm's immigration group, said in an interview that his decision cost him $5,000 to $10,000 a year. The trigger amount for an administration official, he said, was $142,898, as of January 2006.

Forgoing the money and avoiding the trigger "really allows people like me who are technical experts to work for the government," he said.

Steptoe Children

The merger of law firms Collier Shannon Scott and Kelley Drye & Warren earlier this year sent a group of lawyers and lobbyists from Collier Shannon looking for a new home because of a client conflict.

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