Letter signed by 32 members of congress opposing financial regulations written by lobbyist
Published time: August 16, 2013 16:39
Edited time: August 16, 2013 20:38
Startling evidence has been revealed that a June letter signed by 32 House Democrats opposing new regulations on retirement advisors was written by an employee of a financial-industry lobby group working to stop that legislation.
According to the metadata of a Microsoft Word document, which indicates who first created the letter and subsequently edited the file, it was drafted by Robert Lewis, a lobbyist working for the Financial Services Institute (FSI), an investment industry trade group. Mother Jones published its findings on Thursday after it obtained the document.
The June 14th correspondence sent to the Department of Labor opposes new regulations on retirement advisers. Twenty eight out of 43 members of the Congressional Black Caucus (CBC) signed onto the letter, along with Democratic congress members Pedro Pierluisi of Puerto Rico, Tulsi Gabbard of Hawaii, Ed Pastor of Arizona, and Jim Costa of California.
Though influence by lobbyist and special interests are often inferred through campaign contribution records, the publication of evidence showing that a letter sent by congress to a federal regulatory body was literally penned by a lobbyist is in itself remarkable.
"This rule is about protecting people from conflicts of interest," said Phyllis Borzi, the Department of Labor's assistant secretary for employee benefits security, who is behind a regulatory push for stronger investment adviser rules.
The new legislation is aimed at protecting low-income workers from predatory investment counselors, who may be acting in their own best interest rather than that of their customers.
Even those earning comparatively little in the US can end up seeking the advice of investment counselors when moving their retirement nest eggs from employee-sponsored 401k plans into other forms of retirement accounts.
As Mother Jones reports and has been widely investigated by other publications, financial advisers often stand to profit by leading investors into unnecessary high-fee investments. Ten million people in the US change jobs and must handle their retirement funds each year, according to data provided by the Congressional Research Service.
Accordingly, it has been a main concern of the lobbying group Robert Lewis works for, the Financial Services Institute, to oppose new regulations on behalf of the financial investment industry.
FSI has spent $196,000 so far lobbying in the first quarter of this year reports Mother Jones, nearly half the total it spent in all of 2012. According to disclosure forms filed by the group the proposed new investment adviser rule is at the top of its lobbying issues.
The liberal lawmakers who signed onto the letter drafted by Lewis have received tens of thousands in campaign contributions from the securities and investment industry.
According to a copy of the document, it cautions the US Labor Department against enacting new regulations on retirement advisors, warning that strict new rules could push them to abandon the market and severely limit access to low-cost investment advice" for "the minority communities we represent."
FSI has so far not responded to requests for comment on the ghostwritten letter.