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Big Bank Brings In a Face From the Clinton Administration

By Jeffrey H. Birnbaum
Tuesday, May 27, 2008

Washington is likely to be a much more Democratic place next year. That's Democratic with a capital D.

Even if a Democrat doesn't win the White House, experts expect more D's in both the House and the Senate after November's elections.

Which is bad news for big banks (and lots of other large companies as well). Plenty of bills will be coming due for the federal government, and others are sure to be created. Someone will have to pay them, and Big Business is high on the hit list.

Hence a reason that Peter L. Scher has a grand new gig. Scher is a former Clinton administration official, which means he's a major D. He has just been named executive vice president in charge of global government affairs for J.P. Morgan Chase, one of the world's largest financial institutions.

He replaces Rick Lazio, a former Republican congressman from New York who was defeated for the Senate in 2000 by Hillary Rodham Clinton. In other words, he is a major R. (Lazio will remain with the bank -- quite happily, he says -- with the global real estate and infrastructure group.)

D's have been replacing R's (or, more often, supplementing them) on K Street for quite a while. That trend will continue -- and accelerate -- despite all the nasty things John McCain and Barack Obama have been saying about lobbyists.

In fact, interests that care about the capital have been hiring more and more lobbyists because of the lobbyist-bashing. They obviously have a heightened need to protect themselves -- given the anti-special-interest rhetoric -- and lobbyists are the people who do that. Lobbyists that are D's, naturally, are the ones most in demand.

Scher, 47, is already an important D on K. He is in charge of the 200-lawyer Washington office of Mayer Brown. Before that he held senior jobs in Congress, in the executive branch and on the campaign trail.

During the Clinton years, he was a special trade negotiator in the Office of the U.S. Trade Representative. He was also chief of staff at the Commerce Department, where he worked with a future commerce secretary, William M. Daley, who is now his boss at the bank.

On Capitol Hill, Scher was staff director of the Senate Environment and Public Works Committee and chief of staff to Max Baucus (D-Mont.), now chairman of the Senate Finance Committee. In 2004, he managed the vice presidential campaign of former senator John Edwards (D-N.C.).

Scher was brought to the bank as much for his international expertise as his Washington cred. But clearly, D.C. will be a hot spot next year. "A major financial player like J.P. Morgan, with the breadth and depth of its activities across the financial service sector, will need to be active in Washington," he said.

The Foreclosure Bill's Quiet Cheerleaders

When legislation designed to prevent a rush of home foreclosures hits the Senate floor next month, don't expect to see much lobbying by big financial institutions.

Although it likes the measure quite a bit, the Financial Services Roundtable, the lobby for 100 of the nation's largest financial services companies, has decided to root for it mostly from the sidelines.

The reason: Its support could hurt the bill's chances. President Bush has said that he would oppose any effort to "reward speculators and lenders." If gigantic banks and insurance companies advocated too noticeably for the legislation, some people might suspect that it fits the description.

"We're not putting ourselves at the front of the parade," said Roundtable President Steve Bartlett. "It would give opponents an additional argument."

No-Go for the Monthly

Merger talks between the lobby group Common Cause and the liberal magazine Washington Monthly have fallen apart.

The board of Common Cause decided this month not to fold the magazine into its organization, leaving the cash-strapped publication without a much-needed benefactor.

"Our board decided that was a path we were not going to go down," said Common Cause spokeswoman Mary Boyle. "It's a big financial undertaking, one that the board decided we were not quite ready to undertake."

The organizations -- longtime Washington institutions -- have been negotiating for months about uniting. Those discussions were first reported in this column.

Washington Monthly was eager for a financially solid partner, and Common Cause was interested in publishing a magazine for its more than 150,000 members, something it had done from 1980 to 1996.

But it was not to be. The Monthly is now looking for another partner.

"It was a good idea. I wished they said yes. We'll move on to other things," said Paul Glastris, the magazine's editor in chief. "We've got some stuff cookin'."

The Tax Man Cometh

As if ethics and lobbying laws weren't complicated enough, now the Tax Man is getting involved.

The political law group at Skadden, Arps, Slate, Meagher & Flom is hiring a tax lawyer from the Internal Revenue Service to help its clients deal with what it expects to be a crackdown by the service on tax-exempt groups involved in political activities.

Patricia M. Zweibel of the IRS's chief counsel's office will join the law firm this month. Her specialty: the taxation of nonprofit organizations.

Keeping What's Theirs

BGR Holding is being tossed out of the fancy space on Pennsylvania Avenue it's occupied for seven years by its landlord, the law firm Covington & Burling.

Ed Rogers, BGR's chairman, is not happy even though he says Covington's request is perfectly legal. The lobbying firm has poured a ton of money into the place and did not expect to have to leave. The offices are lined with enough wood and marble to outfit a small palace.

Therefore, only half in jest, Rogers has promised a Christmas party at which guests can take whatever parts of the renovations they want. "One way or the other," he said, "the mahogany walks."

Hire of the Week

Speaking of BGR, the once all-Republican lobbying shop has hired its second Democrat. David DiMartino, 38, deputy chief of staff to Sen. Ben Nelson (D-Neb.), is joining the firm's PR arm next month.

DiMartino was previously a national spokesman for Sen. John F. Kerry's presidential campaign and a deputy communications director for the Democratic Senatorial Campaign Committee. He was brought to BGR by the firm's first-ever Democrat, Michael Meehan, who also worked for Kerry and for Democrats on Capitol Hill.

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