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Surprised? Trump’s Advisor on Wall Street Regulations is a Longtime Swamp-Dweller

| November 25, 2016

paul atkins sec trump transition

A closer look at Paul Atkins (SEC)

President-elect Donald Trump’s transition-team adviser on financial policies and appointments, Paul Atkins, has been depicted as an ideological advocate of small government. But the ways that the Trump administration and Congressional Republicans are likely to approach financial deregulation could serve Atkins’ wallet as well as his political agenda. Like Trump himself, Atkins himself faces potential conflicts between his business dealings and his public role.

In 2009, a year after he finished his term as a Republican member of the Securities and Exchange Commission, Atkins formed Patomak Global Partners, a consulting firm headquartered on 17th Street, nestled blocks from the Hay-Adams Hotel and the south lawn of the White House. While Trump promised to “drain the swamp” of Washington, Atkins’ environs could not get any swampier. Patomak’s president is Daniel Gallagher, also a right-leaning former SEC commissioner who might be a candidate for SEC chairman under Trump. Former high-level government officials populate Patomak’s ranks.

Patomak has thrived as financial firms tried to navigate the new world of post-crisis regulations. Patomak and its counterparts, like Promontory Financial Group, are not technically lobbyists, but they exploit their connections to regulators to help their clients — banks and other financial institutions — navigate the rules. (Such consulting firms say they help clients comply with, not circumvent, the rules. A Patomak spokeswoman did not respond to a request for comment.)

The firms stand as emblems of the Washington revolving door. Banks pay a premium to former high-level regulators, valuing them for their contacts at the regulatory agencies. Stacked with Republicans, Patomak is well positioned to benefit from the new power structure in Washington. “They have better lines of communications with those in power. They are better able to see and understand what is coming down the pike,” says one former high-ranking regulator who now works for a hedge fund.

Under a court order last month, Atkins and his firm are now monitoring Deutsche Bank’s agreement with the Commodities Futures Trading Commission to properly oversee and disclose its derivatives trading. Separately, Deutsche Bank is negotiating with the Department of Justice over the size of its fine to settle mortgage related misdeeds. Donald Trump has outstanding loans from Deutsche Bank. These inter-connections raise a host of conflict of interest issues. Will Patomak monitor Deutsche Bank vigilantly? Will financial regulators, perhaps appointed by Trump on Atkins’ recommendation, be inclined to soften their regulatory stance on Deutsche Bank in exchange for business favors to the Trump empire?

Wall Street is thrilled about the incoming Trump administration. Bank stocks are soaring. Atkins, who is overseeing the appointees to the independent financial regulators like the SEC and the Federal Deposit Insurance Corporation, will be able to help shape the Trump Administration approach to financial regulation. But just what does that vision entail? Or, among the disparate groups vying for influence, whose ideas will win out?

There seem to be three tribes in the Trump financial regulatory coalition: ideologues, Wall Streeters and populists.

Atkins belongs to the first tribe. “I think of him as more libertarian than conservative,” says Simon Lorne, the former general counsel for the SEC, who worked with Atkins in the Clinton Administration.

In testimony last year to the House Financial Services Committee, Atkins opened by approvingly quoting Friedrich Hayek, the Austrian economist and philosopher beloved by libertarians. Hayek, Atkins explained, identified the “fatal conceit”: the idea that “man is able to shape the world around him according to his wishes.”

Governments, in Atkins’ view, share this hubristic notion. When they try to corral capital markets to prevent exploitative or risky behavior, they end up hurting the economy. Since the financial crisis, Atkins has been a part of the steady assault on Dodd Frank.

“The real tragedy — or inconvenient truth — behind Dodd-Frank and the hundreds of other rules flowing from Washington every year is that consumers, investors, and small business are harmed the most,” he told Congress in May.

But as the existence of Patomak demonstrates, even ideologues find the regulatory state lucrative.

Meanwhile, the Wall Street crowd appears to have a seat at the table. Steve Mnuchin, the former Goldman Sachs partner who was the Trump campaign’s national finance chairman, is a possible Treasury secretary.

The third tribe, in theory, is the populists. Trump campaigned with a populist message but they have no representatives on regulatory transition team or among the rumored appointees. Steve Bannon, Trump’s chief political strategist and a former Goldman Sachs partner, has criticized the 2008 bank bail-out, and the Republican platform called for breaking up the big banks. But few expect anything resembling that.

Experts say the GOP isn’t likely to repeal Dodd Frank wholesale. Instead, they will likely chip away at it, opening up loopholes. Some changes will come from Congress, others from inside the regulatory bodies themselves. Many “elements can be dismantled in back rooms,” says Marcus Stanley, policy director of the consumer group Americans for Financial Reform.

Instead of shuttering the Consumer Financial Protection Bureau, the GOP-controlled Congress may change its leadership structure, shift its source of funding, and shave its budget. Instead of repealing the Volcker Rule, which prohibits banks from trading for their own account, regulators may widen the number of trades that fall outside the definition. Legislators have floated proposals to loosen derivatives trading rules. They aspire to weaken the Financial Stability Oversight Council. Congress will likely continue to trim the budgets for the SEC and the CFTC and reverse rules extending fiduciary standards to new classes of financial advisors.

Such moves diminish Republican vulnerability to Democratic attacks that a repeal of Dodd Frank is a gift to Wall Street. Maintaining a sprawling kudzu of arcane rules and regulations preserves the necessity of specialists in the art of navigating the bramble of the swamp. Including firms like Patomak.

–Jesse Eiseinger, ProPublica

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16 Responses for “Surprised? Trump’s Advisor on Wall Street Regulations is a Longtime Swamp-Dweller”

  1. Makeitso1701 says:

    President elect-chump promised to “drain the swamp”. When he leaves the white house,hopefully in less than four years, because most likely he will be impeached, the next president in 2020 will have to ” drain the septic tank”.

  2. Katie Semore says:

    The American voters have given the keys to the asylum to the inmates, unbelievable and truly sad. How long will it take them to realize how stupidly they acted and also to realize they acted against their own best interest?

  3. DaveT says:

    Wow the guy has not even taken office yet and these know it all’s can predict the future. I’m going to watch and see what happens.

  4. The Ghost of America says:

    hahahahaha look at all of that buyers remorse

  5. Katie Semore says:

    For those who are literate, the handwriting is on the wall.

  6. Yellowstone says:

    Come on now . . . all that talk before the election was nothing more than “locker talk”. Get over it!

  7. Percy's mother says:

    Incredible negativity in these posts by those who don’t like Trump . . . such incredible negativity, and these are the same people decrying what they perceive as Trump traits when in actuality, it is they who harbor hatred within. Absolutely sickening.

  8. Edith Campins says:

    So Trumpians, how is that swamp draining working for you?

    And no, Percy’s Mother, we weren’t the ones spewing hatred and insulting paople. We didn’t insult women, blacks, the military, the handicapped , the pope, Latinos, members of Congress, the media (for reporting his own words), other candidates…..

  9. Sherry says:

    Yes. . . let’s let Trump speak for himself. . . check out this extremely lewd video of him bragging about being a sexual predator:

  10. Sherry says:

    Here’s just a few of Trump’s quotes from an article in Marie Claire. . . he’s a laughing stock in the UK:

    1. “An ‘extremely credible source’ has called my office and told me that Barack Obama’s birth certificate is a fraud”

    Trump was determined to ‘expose’ President Obama’s birthplace back in 2012, and even claimed to have sent investigators to Hawaii in the hopes of proving Obama wasn’t born in the United States.

    2. “Robert Pattinson should not take back Kristen Stewart. She cheated on him like a dog & will do it again – just watch. He can do much better!”

    Clearly Donald is a Team Edward kind of guy…

    3. “Ariana Huffington is unattractive, both inside and out. I fully understand why her former husband left her for a man – he made a good decision.”

    Trump always has charming things to say about successful, prominent women – but he stooped particularly low with this comment about Huffington Post founder.

    4. “You know, it really doesn’t matter what the media write as long as you’ve got a young, and beautiful, piece of ass.”

    Trump proves (again) that he views a woman’s looks over anything else…

    5. “I will build a great wall – and nobody builds walls better than me, believe me – and I’ll build them very inexpensively. I will build a great, great wall on our southern border, and I will make Mexico pay for that wall. Mark my words.”

    Oh for goodness sake.

    6. “When Mexico sends its people, they’re not sending the best. They’re not sending you, they’re sending people that have lots of problems and they’re bringing those problems with us. They’re bringing drugs. They’re bring crime. They’re rapists… And some, I assume, are good people.”

    Just another casually racial slur, then…

    7. “Our great African-American President hasn’t exactly had a positive impact on the thugs who are so happily and openly destroying Baltimore.”

    Don’t worry, his racist outbursts aren’t just directed at Mexico.

    8. “If I were running ‘The View’, I’d fire Rosie O’Donnell. I mean, I’d look at her right in that fat, ugly face of hers, I’d say ‘Rosie, you’re fired.’”

    Trump has infamously hated on Rosie O’Donnell, making crude, sexist and misogynistic remarks about her on multiple occasions.

    9. “All of the women on The Apprentice flirted with me – consciously or unconsciously. That’s to be expected.”

    Because of course, no woman can resist Trump’s charms. [Throws up on keyboard]

    10. “One of they key problems today is that politics is such a disgrace. Good people don’t go into government.”

    Well at least he’s showing some self awareness.

    11. “The beauty of me is that I’m very rich.”

    And not that fabulous barnet of yours?

    12. “It’s freezing and snowing in New York – we need global warming!”

    Definitely not missing the point…

    13. “I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her.”

    Possibly (/definitely) one of the creepiest things we’ve ever heard…

    14. “My fingers are long and beautiful, as, it has been well documented, are various other parts of my body.”


    15. “I have never seen a thin person drinking Diet Coke.”

    We’re glad he’s so concerned about the obesity crisis.

    16. “I think the only difference between me and the other candidates is that I’m more honest and my women are more beautiful.”

    Women aren’t possessions, Donald. They can’t belong to you.

    17. “You’re disgusting.”

    To put this into context, Donald Trump said this to the opposing lawyer during a court case when she asked for a medical break to pump breast milk for her three-month-old daughter.

    18. “The point is, you can never be too greedy.”

    Campaign slogan = sorted.

    19. “Sorry, there is no STAR on the stage tonight!”

    In his Twitter liveblogging of the Democratic debate, Trump seemed to think he was watching a talent show rather than looking for the next POTUS.

    20. “My Twitter has become so powerful that I can actually make my enemies tell the truth.”

    We think Donald may be overestimating the power of Twitter.

    21. “My IQ is one of the highest — and you all know it! Please don’t feel so stupid or insecure; it’s not your fault.”

    Don’t worry, we won’t.

    22. “I have so many fabulous friends who happen to be gay, but I am a traditionalist.”

    What does that even mean?

    23. “The other candidates — they went in, they didn’t know the air conditioning didn’t work. They sweated like dogs…How are they gonna beat ISIS? I don’t think it’s gonna happen.”

    Because sweating = the inability to solve a political crisis. Gotcha.

    24. “Look at those hands, are they small hands? And, [Republican rival Marco Rubio] referred to my hands: ‘If they’re small, something else must be small.’ I guarantee you there’s no problem. I guarantee.”

    Along with the petition to keep him out of the UK, can we also campaign for Trump to stop talking about his penis?

  11. Anonymous says:

    But people who make tons and tons of money can always be counted on to share the wealth and put the fiscal interests of others above their own, right? Because, after all, that’s we’ve all experienced before with all those prior versions of “Trickle Down” economics. We all know what’s going to “trickle down”…and it ain’t “the wealth.” Apparently, however, some people’s prejudices and paranoia, which they cling to and hold dearer than dear, are worth taking the serious risks that threatened to sink our economy before–and not so long ago..

  12. William Moya says:

    Shouldn’t we bring back the “Pay to Play” slogan?

  13. r&r says:

    You sore losers never questioned the so call birth place, ssn, and all those so called achievements at Hartford and Yale when nobody who was at those schools know him or remember him. This guy has lived a lie his entire life. So stop the whining and let’s make America GREAT AGAIN.

  14. footballen says:

    Hillary is so proud of you all.

  15. r&r says:

    The only thing Hillary is proud of is the Clinton foundation.

  16. Anonymous says:

    Hey Edith…..Hill the liar lost, get over it!

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