Maxine in the News
Maxine Waters reaches out to big banks and Wall Street
By Anna Palmer and MJ Lee, POLITICO
Maxine Waters and big banks are rarely on the same page.
But as the California congresswoman prepares to become the top Democrat on the House Financial Services panel, she is engaging in an aggressive outreach effort with some of the very institutions that she has heavily criticized for their role in the financial crisis and recent home foreclosure scandals.
From organizing industry roundtables to one-on-one meetings with Wells Fargo's CEO to holding fundraisers targeting banking donors, Waters is opening the door to big banks and Wall Street.
In some cases, it’s the first time that individual banks and association lobbyists have met with the senior lawmaker who has spent many years on the committee.
Industry officials say the increasingly aggressive outreach effort coming from Waters and her staff has been on the uptick for at least a year — ever since Rep. Barney Frank, the current highest ranking Democrat on the Financial Services Committee, announced in November his plan to retire at the end of 2012.
Her staff says Waters initially began reaching out in 2010 when she took on the ranking member slot on the capital markets subcommittee.
Despite these efforts, there’s still a ways to go before some in the industry can feel that Waters is just a phone call away, said James Ballentine, the American Bankers Association’s executive vice president for congressional relations and public policy.
“For some folks in the industry, this is the first date with Congresswoman Waters and her office. And I don’t think relationships are built over a first date,” Ballentine said. “I think she realizes that there’s outreach that’s needed from her and her office to the industry. ... And I think a firm recognition from the industry standpoint is that you get little done by ignoring the person that’s in the chair or the ranking position.”
To that end, Waters and her aides have set up a series of Washington roundtables with industry stakeholders. The events, which have drawn more than 100 people, have been issue focused on topics such as derivatives, the Volcker rule and imminent domain.
The California lawmaker has also developed an unlikely friendship with Wells Fargo CEO John Stumpf. The two met last year when Stumpf unexpectedly dropped by her office and they struck up a friendly conversation for about 30 minutes. That turned into periodic conversations about financial services issues.
Waters's chief of staff Mikael Moore said they have developed a "respectful relationship" and also recently had breakfast.
More recently, Waters has targeted her outreach effort to specific banks.
On Wednesday, her senior staff met with the American Bankers Association and more than a handful of the trade group's member companies. The meeting, which was organized by the ABA's Ballentine and Moore, was an attempt to start a conversation between downtown and Waters's office.
"It's an important step to create an open dialogue," Moore said of the discussion, which focused on reforming mortgage giants Fannie Mae and Freddie Mac. "This issue presents an opportunity to work with advocates and industry to craft a solution that makes sense."
Moore acknowledged that there is no doubt that at times there will be disagreements.
"We talked a lot about how we communicate with each other, how we have to have the necessary hard conversations and have an open and honest dialogue," Moore said.
The charm offensive comes as Waters's fundraising duties will increase sharply next cycle. Waters has made a commitment to make a significant contribution to the DCCC in the next two weeks, according to Moore.
The pressure for her to increase her financial contributions to fellow Democratic lawmakers and the party committee will only intensify next year.
Last month the Ethics Committee ended an investigation into whether Waters improperly tried to help a bank with ties to her husband get a meeting with Treasury officials in 2008.
With that case behind her, Waters now has no real impediments in her path to replacing Frank as the committee’s top Democrat and it also frees her up to be a more aggressive fundraiser.
Waters's top campaign contributors read like a laundry list of Democratic causes. Her top three contributors are the American Association for Justice, the National Association of Realtors and the United Auto Workers. Banks aren't among her top 20 donors, according to the Center for Responsive Politics.
But that could change.
Waters recently held court at a fundraiser hosted by the lobbying shop Elmendorf Ryan that had a who's who of financial services reps in attendance, including from Goldman Sachs, Bank of New York Mellon, JPMorgan Chase, Bank of America and the Investment Adviser Association.
Paul Brathwaite of Podesta Group said cozying up to the industry is normal for lawmakers when they ascend into a leadership slot. And as much as Waters is looking to create a relationship with the banking and financial services lobbyists, downtown will also benefit from it.
"Some institutions and trade associations haven't necessarily played their cards right," Brathwaite said, pointing to her high-profile role in authoring language in Dodd-Frank that requires a diversity office. "Not engaging with her and her staff is putting your company way behind the eight ball."
Still, Waters is unlikely to be as close with banks as her expected Republican counterpart on the panel — Rep. Jeb Hensarling of Texas. In private conversations, some senior banking lobbyists roll their eyes about the outreach effort, saying they aren't expecting to agree on much substance with Waters.
But as much as many in the financial services sector are bracing themselves to clash with Waters on key policy issues in the next session of Congress — especially those related to housing reform, which has long been Waters’ main areas of focus on the panel — the congresswoman’s attempt to mend ties with an industry that she’s often found herself at odds with is garnering some positive reviews.
One financial services executive said her outreach has signaled that she recognizes the very real challenges that lie ahead as she prepares to make the transition to ranking member of the Financial Services panel — a role that she probably cannot excel at without at least partly doing away with her reputation as an argumentative, fiery liberal.
“In the past she’s been a bit of a firebrand — obviously had an ax to grind against the industry whether rightly or wrongly. She can do a lot to restore her reputation,” the executive said. “She can position herself as someone who’s willing to listen and portray herself as someone who’ll listen and be thoughtful. ... She’ll never vote with us a hundred percent of the time but she’ll at least have a more informed transition. That goes a long way in Washington.”
The executive added, “At the same time, actions speak louder than words down the road so it remains to be seen if her actions will back up her words.”
Smaller banks and credit union lobbyists say that Waters is already a known commodity to them.
"We've always had a very good relationship with Congresswoman Waters," said Dan Berger, executive vice president of government affairs at the National Association of Federal Credit Unions. "I think credit unions are a bit of a different beast than some of the other folks. ... In terms of outreach and meeting with us and at least listening to us, she’s been fantastic.”
Independent Community Bankers of America chief economist Paul Merski agreed. “I haven’t noticed any uptick [in communication] because we’ve always had a pretty open dialogue with their office back and forth,” he said. “They reach out to us and we reach out to them and we’ve always had a pretty strong relationship with that office.”
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