Master Classes in Teamwork

By Brady Dennis
Washington Post Staff Writer
Thursday, October 15, 2009

The private seminars usually take place on Tuesdays or Thursdays. The classroom often is a first-floor meeting room in the Capitol. The students are U.S. senators -- sometimes a handful, sometimes more -- and a collection of their staff members.

The sessions unfold away from the C-SPAN cameras and politically charged public hearings, and the lawmakers listen more than they speak, trying to understand some of the most complicated issues facing Congress as it tries to overhaul the nation's financial regulatory system. The tutors have included a high-profile cast of current and former regulators, academics and financial gurus, such as Federal Reserve Chairman Ben S. Bernanke and his predecessor, Alan Greenspan; Wall Street super-lawyer H. Rodgin Cohen; and Sheila C. Bair, chairman of the Federal Deposit Insurance Corp.

The sessions, which began in March and have continued ever since, are the product of two freshman senators, Bob Corker (R-Tenn.) and Mark Warner (D-Va.), whose burgeoning partnership could help shape the legislation that ultimately emerges from Congress.

They are outranked by nearly everyone on the Senate Banking Committee, particularly its chairman, Christopher J. Dodd (D-Conn.), and ranking member Richard C. Shelby (R-Ala.), whose views are likely to dominate the committee's version of legislation.

But by joining forces, Corker and Warner -- a former Chattanooga mayor and a former Virginia governor, both successful businessmen -- have positioned themselves to exert influence beyond their junior rank as the Senate tackles regulatory reform in the coming months.

"Clearly, this debate is going to be dominated by Dodd and Shelby. But a lot of people are going to listen to what Corker and Warner have to say," said Sen. Judd Gregg (R-N.H.), a fellow member of the banking committee who has attended several of the seminars. Gregg said his two colleagues' financial backgrounds have helped them understand the current issues "because they dealt with them in the real world, something a lot of people haven't done. As a result, I think they have tremendous credibility on these issues. I don't think the amount of years they've been in the Senate is relevant at all."

'A Wealth of Experience'

Already, Warner and Corker have crafted legislation that would give the FDIC wider authority to wind down failing financial firms, a step toward ridding the country of "too big to fail" institutions. They also have sponsored a bill aiming to liquidate the government's stake in such bailed-out companies as General Motors, Citigroup and American International Group. The proposal would also require that independent trustees be named to manage the public stake in any company that is more than 20 percent owned by the government.

In drafting bills and holding periodic seminars, colleagues say, the duo has earnestly tried to bypass the partisan rancor afflicting so many issues on Capitol Hill and produce meaningful changes in the regulation of financial markets.

"Boy, oh, boy, the public would have a right to be even angrier if you had some other kind of major meltdown because we hadn't put new rules of the road in place," Warner said. "There is no Democrat or Republican approach here. This is more about how do you get it right. There are a lot of folks on the other side who I think bring a reasonable approach."

Corker echoes that philosophy.

"There shouldn't be anything really partisan about reg reform," Corker said. "The fact is, this is an arcane and very specialized area."

Warner and Corker's alliance on regulatory reform makes sense in many ways. Both men pride themselves on being moderates in their parties. Both men made themselves into millionaires in the business world -- Warner in telecommunications, Corker in real estate development. Both were chief executives before joining the lowest ranks of the Senate hierarchy, and that background, coupled with their freshman status, has intensified each man's desire to create tangible results.

"They're both very, very good. They bring a wealth of experience to the committee," Dodd said. "I welcome their involvement."

An Instant Rapport

Their continuing collaborations don't mean that Warner and Corker agree on every regulatory reform issue. Warner has come out strongly in favor of consolidating banking regulation in a single agency; Corker has yet to take a firm position on that issue. Corker, meanwhile, has been outspoken in his criticism of the Obama administration's proposal for a new agency to oversee consumer financial products such as mortgages and credit cards, calling the plan "so far in the left ditch it was incredible." Warner has avoided saying whether he would support an independent consumer agency, saying only that the original proposal "was too broad."

Nor was the partnership between the two senators a foregone conclusion.

In 2006, Warner campaigned in Tennessee for Corker's opponent, Democrat Harold Ford Jr., telling one audience that Ford was "the bolder choice." Corker eventually won with 51 percent of the vote, becoming the only new Republican elected to the Senate that year.

By the time Warner was elected to the Senate two years later, Corker was becoming known as a workhorse on the banking committee. He raised his profile as one of the lead negotiators in the debate over bailing out the nation's troubled auto industry. Corker's grilling of Chrysler chief executive Robert L. Nardelli during one hearing, as well as his demand that automakers make concessions in return for a bailout, were seen as hard-nosed pragmatism by some and as anti-union and inflexible by others. Warner noticed Corker's role and sought out his new colleague.

Earlier this year, the two senators realized they were meeting individually with many of the same people, trying to understand the plethora of issues that needed attention, from the shadowy world of unregulated derivatives to the often-unwieldy patchwork system of financial regulators.

Both men said they developed an instant rapport. They decided to organize a series of joint seminars and to invite any senators who wanted to attend. The first session came on March 26 with a visit from Douglas Elliott, a financial expert at the Brookings Institution. At least seven sessions have followed, on topics such as the housing market, banking supervision and regulatory reform as a whole. Most recently, Bernanke spent about an hour two weeks ago speaking with senators in depth about the Federal Reserve.

"It's been very, very helpful in trying to see through where you think the endgame needs to be on financial regulation," Corker said. "For me, it's been more of a way to take many of the issues far more deeply. It helps you think through some of the blind spots."

Beyond the Seminars

Over time, their bull sessions have gone well beyond organized Capitol Hill meetings, to casual dinners where they and their staff members can discuss financial issues over an after-hours beer. Corker joked that the two senators held their most recent "summit" at Johnny's Half Shell.

Some of the featured speakers at the seminars have come away encouraged. They describe free-flowing, cordial discussions, with senators from both parties asking serious questions.

"Obviously, it's going to be Dodd and Shelby that are going to be the big players. But what Mark Warner and Corker are doing, I think it will support and foster the bipartisanship," said Martin Baily, a chairman of the Council of Economic Advisers under President Bill Clinton, who met with the group in July alongside Greenspan and Robert Steel, a former Treasury undersecretary and Wachovia chief executive. "They're both new and trying to do something different. I don't know where it will go, but I think it's a very good thing."

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