Now in Private Sector, He's Still Linking Ailing Firms to Federal Aid

NEW YORK -- With the nation's airline companies teetering in the aftermath of the Sept. 11 attacks, Michael D. Scott worked for the Treasury Department as a kind of ambassador between the federal government and the ailing industry.

Now back in the private sector as head of a newly created practice at Wall Street investment firm Miller Buckfire, Scott, 46, aims to play a similar role on the other side of the table, helping companies win approval from a federal government that has become increasingly interlinked with business. He hopes to reach a varied clientele -- for example, assisting energy companies in getting a slice of an expanded federal loan guarantee program and advising private-equity firms and hedge funds that seek to buy preferred shares of the nation's banks held by the government as a result of the federal rescue program.

"The U.S. government will continue to be a large financial institution. It's going to be a prolific provider of loan guarantees and direct loans," Scott said. "I think there's going to be substantial opportunities that will be much greater than when I was at Treasury."

Scott, who left the Treasury Department in 2006, has shuttled between the public and private sectors. He joined Miller Buckfire in July after working briefly at the Securities and Exchange Commission and Banc of America Securities.

The financial crisis has recast the relationship between Washington and Wall Street, with the federal government playing a more powerful role: bailing out companies, financing their activities, guaranteeing their debts -- and regulating their operations. While people have long moved back and forth between jobs in Washington and New York, tapping expertise and connections for public good and private gain, the heightened role of the government in the life of the financial industry has placed a new premium on those at the nexus of these two power centers.

Scott is among those standing at this intersection who influence business policy in subtle and significant ways. And Miller Buckfire, a boutique investment bank, is one of an increasing number of Wall Street firms angling to play a larger role in this arena where financiers and policymakers rub shoulders.

"The federal government is really in uncharted water given the pace and scale of the programs they're trying to roll out," said Gregory Burkart, a managing director at Duff & Phelps, a financial advisory and investment banking firm.

His own company is now looking to expand the 17-person division that helps clients secure public-sector funding. In the meantime, Burkart's team has been tapping colleagues from the firm's property tax group for help with the division's surging workload, which since the passage of the $787 billion stimulus package has focused entirely on securing federal dollars.

At Miller Buckfire, the new U.S. government advisory practice will help clients who "need advisers who can help them manage their growing financial ties to the federal government," Kenneth A. Buckfire, a co-founder of the bank, said in announcing Scott's position.

Scott gained experience in addressing the kind of fiscal issues now confronting Wall Street when he helped the airlines. As acting chief administrative officer of the hastily created Air Transportation Stabilization Board, Scott helped win approval for $1.5 billion in loan guarantees to six airlines in the 15 months following the terror attacks. Some industry experts say the loans granted by the board proved critical to the survival of some of the nation's largest commercial air carriers.

"America West Airlines was the very first applicant in November 2001 and was coached both broadly and specifically over the next two months on what they needed to do to receive approval for a loan guarantee," said Scott, adding that the airline amended its application several times before securing a $380 million loan guarantee in January 2002. "There are ways to help the government say 'yes' in a way that's responsible for them and responsible for us."

America West, which assumed the name of US Airways after acquiring the Arlington-based carrier in 2005, would later credit the loan guarantee for helping it survive.