Cantor's not lobbying, but his big payday should upset conservatives
Boutique investment bank Moelis & Company announced Tuesday it was hiring the former House majority leader as a vice chairman, managing director, and member of the board. The firm’s filing with the U.S. Securities and Exchange Commission shows Cantor receiving $1.6 million in cash signing bonuses, more than $500,000 in salary, and $1.4 million in stock options for the remainder of 2014 and all of 2015.
You can’t blame Cantor for accepting an offer like that one. But what is it that public officials do that companies would pay so much for, after just a few years in the leadership of a party that has mostly been out of power?
Cantor’s people say he won’t lobby, even after his one-year ban expires next August. The rules are murkier on the gathering of political intelligence, but precedent suggests Cantor would also be banned from, say, calling up House Speaker John Boehner and asking, “Hey, my client wants to know whether to invest in a sugar cane farm — you guys gonna renew that sugar subsidy?”
So why is Cantor worth that much? What will he be doing?
There are a few explanations that most experts and insiders agree on: 1) He will advise clients on Washington matters. 2) He will dazzle clients with his high profile and intriguing experiences. 3) He will use the problem-solving and deal-making skills honed and proven as a leader of a particularly rambunctious party.
Most important, though, is probably 4) Cantor, as a leading GOP fundraiser, built intimate connections to the financial and corporate world.
Moelis, more than some other investment banks, is about advising companies, other financial firms, and government clients. An associate of Cantor's familiar with his job negotiations, said he expects Cantor to help advise clients navigating the “intersection with public policy.” It's noteworthy that Cantor isn't moving to New York, but is launching the firm's Washington office.
On this score, one former aide told me that Cantor’s knowledge extends beyond the Beltway. The aide called Cantor “a foreign policy, geopolitical expert,” and pointed out that Moelis has clients across the world.
A Wall Street lawyer and a K Street lobbyist both added that Cantor brings star power to the firm. Surely there was more news about Moelis & Co. on the day of Cantor’s hire than any day in the firm’s history. Potential clients will see meetings with Cantor as a bonus of signing on with the firm.
Denizens of Cantorworld argue that his value to Moelis is not in his Rolodex or his legislative experience, but simply in his frontal lobe. Two different Cantor alumni warned me not to consider Cantor’s hire to be a typical politician’s pass through the revolving door. Cantor has proved himself a problem solver, an intellectual, and a hard worker, they pointed out.
“This is a real job,” one Cantor alum said.
But it’s hard to ignore the value of his contact list — not so much on Capitol Hill, but in the business world.
Cantor’s job within the GOP was largely fundraising. He was the House Republicans’ liaison to Wall Street and a major intermediary with corporate America. One Republican financial lobbyist said that if he were a Wall Streeter hiring Cantor, “I don’t give a [hoot] that he knows who Steve Southerland is, or Kevin Yoder. I care that Lloyd Blankfein returns his call or that Jamie Dimon considers him a friend.”
Moelis said in its announcement that Cantor “will play a leading role in client development,” which largely means bringing in new clients. The businesses he worked with and raised money from will likely be on his call list. Also, when Moelis clients want investors or takeover targets, Cantor’s connections will help, too.
So, if he’s not lobbying, should anyone care that Cantor’s public service is making him rich?
Again, it’s hard to fault Cantor for taking the deal. But anyone who cares about good government — especially those who advocate small government — ought to find his value a bit disconcerting.
If an investment firm is willing to pay $220,000 a month for a politician’s insight — even if he is an extraordinary politician — that tells us that Washington is more involved with our economy than it should be.
Cantor, generally a free-market guy, helped expand government’s role in the economy in important ways — championing the 2008 Wall Street bailout and the Export-Import Bank, and supporting Medicare's 2003 expansion.
The intersection of politics and business is busier than it used to be. And Cantor is as good a man as any to help businesses navigate it.Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at firstname.lastname@example.org. His column appears Sunday and Wednesday on washingtonexaminer.com.