Why did the Senate -- unprovoked by the House -- decide to insert this change into its own legislation? Sources have told me that both Senators Bayh and Mark Warner insisted on this new language after strong lobbying from the Business Roundtable. Apparently, both men threatened Sen. Dodd that they would vote against the financial reform bill without this new language, which would block cloture on the bill and slow down its passing. Dodd caved.
Sen. Warner, who bills himself as a pro-business, low-taxes Democrat, apparently buys in to the Business Roundtable's argument that large investors like John Paulson, Fidelity, CalPERS, and others can't be trusted to pick good director nominees as much as CEOs. I guess he would have been totally comfortable when Dick Fuld of Lehman Brothers asked a Broadway producer buddy, Richard Berlind, to not only serve on the Lehman board but also join its Risk Committee. That's pro-business. Perhaps Sen. Warner should propose that
(GS - Get Report)
and the other Wall Street banks should take over the messy day-to-day operations of the Securities and Exchange Commission. Wouldn't that be equally pro-business by his logic?
Starting in November, Sen. Bayh will join the nation's unemployment ranks. Although he hasn't ruled out a return to politics one day, that's not in his immediate future. Why not take a page out of his wife's playbook and join six corporate boards? He could -- I would assume -- at least match her income from these activities. It's easy work. Fly around and attend a few meetings a year. Rubber stamp a few wishes from the CEO. That sure beats manual labor.
So, if that is Bayh's goal, he has good reason to use his dwindling political capital to block this small piece of a 1,400-page financial reform bill. By doing so, he just made a lot of friends among Business Roundtable members: his future potential employers.
We contacted Sen. Bayh's office to ask him whether and why he blocked "proxy access" and they didn't respond to our questions before we went to press.
Proxy access is fair and should be part of any future financial reform -- without restrictions.
At the time of publication, Jackson held a long position in Citigroup.