Court, avoid or sideline?
Barely a month into the new Congress, financial lobbyists in Washington are already strategizing how to handle the star power of rookie Democrat lawmaker Alexandria Ocasio-Cortez.
The Democratic Socialist and Wall Street critic joined the 60-member House Financial Services Committee in mid-January and more than a dozen lobbyists interviewed by Reuters say the 29-year-old activist and former bartender is too high-profile to ignore.
Richard Hunt, chief executive of the Consumer Bankers Association, said he had not encountered a lawmaker like Ocasio-Cortez in more than 20 years in Washington. “She has the ability to influence unlike a lot of other freshmen.”
Activists zoomed in on one place in particular: the Financial Services Committee, which deals with big banks, real estate, and almost every interaction people have in dealing with their own money.
What they found was a place where big bank lobbyists were slipping in their work.
The youngest woman ever to serve in Congress, Ocasio-Cortez has become a social media phenomenon with her posts and live-streams on everything from climate change to skin care tips attracting millions of followers across Twitter and Instagram.
The New York native has proved adept at using humor to explain complex concepts or rebuke opponents, often while preparing dinner or hanging out in her pajamas. A video of the lawmaker dancing outside her Congressional office last month has been viewed 21 million times.
An economics major and self-confessed “science nerd,” Ocasio-Cortez campaigned on issues that put her at odds with the financial industry, including separating commercial and investment banking, breaking up large banks, and forgiving student debt.
Central to her campaign has been the rejection of corporate campaign dollars, closing off a traditional avenue for industry access and influence on Capitol Hill.
Now lobbyists fear that her enlarged platform will help the first-term junior lawmaker push her ideas into the mainstream and are trying to figure out how best to respond.
Lobbyists representing big banks, such as JPMorgan Chase & Co, Citigroup, Bank of America Corp, Wells Fargo and Morgan Stanley, which have embraced progressive causes such as diversity, inclusion, gun control or above-minimum wages, want to push these credentials. They also want to highlight how they employ thousands of people in Ocasio-Cortez’s district in Queens and the Bronx, they said.
Smaller and mid-size firms, meanwhile, want to distance themselves from Wall Street titans and emphasize their critical role as community lenders.
Several financial lobbyists, noting she lacks a financial services background, said they were keen to meet with Ocasio-Cortez to explain their business models and issues.
Paul Merski, executive vice president at the Independent Community Bankers of America, said the group had contacted the lawmaker’s office and was hoping to schedule a meeting. He added his focus would be to draw the distinction between larger financial firms and ICBA’s members, which as small community lenders have built-up “tremendous goodwill” across the aisle.
Spokespeople for JPMorgan, Citigroup, Bank of America, Wells Fargo, and Morgan Stanley declined to comment.
Speaking to Reuters on the sidelines of a Capitol Hill event on Wednesday, Ocasio-Cortez said the appointment of progressives like her to the panel “sends a very powerful message” to the financial industry.
She said she wanted to pursue aggressive oversight and expose financial corporations’ role in broader areas of concern, such as the detention of children in privately-funded facilities on the Mexico border.
“We can leap back in and say, what does a responsible financial sector looks like?”
“LIKE TALKING TO THE FBI”
Other lobbyists worry, however, engaging her could backfire, especially if Ocasio-Cortez uses social media to publicize the meeting. For example, she went on Twitter to name and shame corporate lobbyists at a Congressional freshman orientation event in December.
“The fear is, it’s like going in to talk to the FBI, anything you do or say can be used against you,” said one lobbyist for a major bank.
Lobbyists note how Ocasio-Cortez has already ignited a public debate on climate change and inequality by calling for a Green New Deal and proposing a 70 per cent tax on income exceeding $10 million, an idea Nobel Laureate Paul Krugman has endorsed.
Waleed Shahid, a former campaign aide and a spokesman for Justice Democrats, the progressive group that recruited Ocasio-Cortez, said her ability to raise public awareness about complex issues had caught the establishment’s attention.
“She can really explain what is happening with Wall Street in a way the public can understand it, and that’s why Wall Street is terrified.”
Speaking to Reuters, Ocasio-Cortez did not rule out listening to industry concerns to arrive at responsible regulation, but said “they have more than enough sympathetic ears” on the committee.
“We also saw in 2008 just a lot of advocacy for policies that were at its core totally irresponsible. But they were dressed up as conservative fair-minded measures,” she added.
Saikat Chakrabarti, chief of staff for Ocasio-Cortez, whose Twitter handle is @AOC, had his own message for the industry: “@AOC is here to hold Wall Street accountable, not be your buddy,” he Tweeted on Wednesday in response to this story.
The financial industry faced a similar challenge in 2012 when newly elected progressive firebrand Elizabeth Warren joined the Senate Banking Committee and her grilling of bank executives and regulators won her a national following.
But while Warren was well-known as a consumer advocate before joining Congress, she did not have the same social media platform as Ocasio-Cortez. Isaac Boltansky, director of policy research at Washington-based boutique investment bank Compass Point Research & Trading, said that whichever bank slips up next will get “taken to the woodshed in a way that we haven’t seen before.”
Often caught flatfooted by Warren, the industry hopes to rebuild bipartisan support it enjoyed in Congress before the 2007-2009 financial crisis. And with many incumbent centrist Democrats smarting after Ocasio-Cortez called them out for doing big business’s bidding, some see an opportunity to divide and conquer, according to Reuters news agency.
Several lobbyists told Reuters they believed they could isolate Ocasio-Cortez and other progressives on the financial services committee by building coalitions with moderate Democrats, such as fellow New York Representative Gregory Meeks, and centrist Republicans.
They said they would also lean on Committee Chairwoman Maxine Waters, a Democrat and a liberal who has pledged to work across the aisle, to rein in the progressive wing.
A spokeswoman for Waters declined to comment.
In a statement, Meeks said his priority this Congress would be to promote policies that “support our financial system, but ensure everyone benefits from its successes.”