For Immediate Release
Responding to Pressure from Progressives, Sec. Clinton Endorses Legislation Against “Golden Parachutes” for Government Service
WASHINGTON - In a clear response to growing grassroots pressure, Sec. Hillary Clinton announced this morning that she “strongly supports” legislation that would slow down the revolving door between Wall Street and Washington and, among other things, ban “golden parachutes” for government positions.
Last week, eight progressive groups, including Rootstrikers, Democracy for America, CREDO Action, MoveOn.org Political Action, Center for Popular Democracy Action, The Other 98%, Friends of the Earth Action, and American Family Voices, sent a letter to Secretary Clinton outlining concerns over two of her aides who had previously received “golden parachutes” – large bonuses for entering government service – from major Wall Street banks. In that letter, progressives noted that unlike her prominent competitors for the Democratic nomination, she had yet to endorse revolving door legislation sponsored by Sen. Tammy Baldwin and Rep. Elijah Cummings.
By endorsing this legislation, Clinton has shown that Democrats of all stripes can and should rally behind commonsense measures to rein in Wall Street’s influence. She deserves credit for acknowledging the concerns of Americans who feel like their voice is drowned out by the powerful and well-connected. Clinton’s endorsement is a clear sign of the growing momentum for bold action to crack down on Wall Street.
In addition to asking her to publicly endorse that legislation, however, the letter asked if Sec. Clinton would allow members of a potential administration to receive such bonuses. She has not yet firmly committed to implement a policy against golden parachutes in her administration if elected, regardless of the outcome of Sen. Baldwin’s legislation. Progressives will continue pressuring all candidates to make it absolutely clear where they stand.
“Secretary Clinton’s support of Sen. Baldwin’s bill is great news for anyone who wants to see Wall Street play by the same set of rules as the rest of the country,” said Kurt Walters, campaign manager at Rootstrikers. “We’re pleased that Sec. Clinton has come to the conclusion that golden parachutes are so contrary to the public interest that they should be criminally illegal. It’s time to shut down the corrupt Wall Street-to-Washington revolving door, and Sec. Clinton should be applauded for starting to lay out clear steps she’d take to fight it.”
“Endorsing Senator Baldwin’s bill is a first step in the right direction,” said Murshed Zaheed, deputy political director at CREDO Action, adding “If Secretary Clinton truly wants to stop not just ‘slow’ the revolving door between Wall Street and government, she’ll pledge to ban golden parachutes for officials who join any future Clinton administration.”
“Secretary Clinton deserves real praise for listening to Warren Wing Democrats and taking this vitally important first step in slowing down the revolving door between Wall Street and Washington,” said Charles Chamberlain, Executive Director of Democracy for America. “We expect to hear additional ways Secretary Clinton will commit to reducing the power of Wall Street insiders in government and on her campaign going forward.”
“We’re happy to see Secretary Clinton endorse the Baldwin legislation,” said American Family Voices executive director Lauren Windsor. “However, given that the bill will be hard to pass in a Republican-controlled Congress, we’d like to hear a more concrete commitment not to engage in these practices under a Clinton administration.”
Erich Pica, president of Friends of the Earth Action, said, “Friends of the Earth Action appreciates Secretary Clinton’s recent comments on Wall Street’s revolving door influence on policies. She must now go a step further and commit to bar the appointment of Wall Street executives and other corporate insiders to positions in her campaign and, if elected, her administration. Its time to end the practice of the fox guarding the hen house when it comes to financial services regulation, international trade and similar issues.”
Since mid-July, progressive groups including Rootstrikers, DFA, and CREDO have rallied around Sen. Tammy Baldwin’s “Financial Services Conflict of Interest Act” – legislation that would slow down the revolving door between Wall Street and Washington and, among other provisions, ban golden parachutes for government positions.
Prior to last week’s letter, more than 115,000 citizens have signed petitions calling on 2016 presidential candidates to support Sen. Baldwin’s bill to fight the Wall Street-Washington revolving door. An additional 112,000 people have signed a CREDO Action petition urging members of Congress to support the bill. This support was also voiced by Senator Elizabeth Warren, who called the legislation “a bill any presidential candidate should be able to cheer for” and encouraged progressives to press 2016 candidates on it at Netroots Nation conference in July.
While two of Secretary Clinton’s primary election opponents – Sen. Bernie Sanders and Gov. Martin O’Malley – had endorsed the legislation, Clinton herself had previously declined to address it.
The groups’ letter specifically asked Clinton to clarify her position on the “Financial Services Conflict of Interest Act” and also to respond to two questions regarding the practice of Wall Street executives receiving golden parachutes to take government positions:
1) “Do you still support the use of this controversial compensation practice?”
2) “If you become President, will you allow officials who enter your administration to receive this sort of bonus?”
The groups had noted that two of Clinton’s closest aides at the State Department, former Deputy Secretary Tom Nides and former undersecretary Robert Hormats, took golden parachutes worth millions of dollars to serve work under her. Both men remain close to Clinton’s orbit and Nides has been reported to be a potential chief of staff in a Clinton White House.
“Golden parachutes” for government service are highly controversial because it is unclear how they serve the interests of bank shareholders unless they are intended to curry favor and influence with newly minted government officials. After all, bonuses are generally intended to reward valuable executives for staying at a company – not for leaving it. If it is the case that the parachutes intend to influence new government officials, they fall just millimeters short of violating federal criminal bribery statutes and create significant harm to the public interest.
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