When Wall Street and Washington get messy
BlackRock and Goldman courted a government pension official, perhaps too eagerly. He sought their help, perhaps too freely.
(breakingviews.com) -- The porous divide between Wall Street and Washington is getting grayer and messier. Look no further than the unfolding tale of Charles Millard, the former head of the U.S. Pension Benefit Guaranty Corporation.
BlackRock (BLK, Fortune 500) and Goldman Sachs (GS, Fortune 500) in particular lobbied him for lucrative asset management gigs, perhaps too eagerly. He sought their help, perhaps too freely -- including in looking for a job after he left office.
The PBGC concluded in May that Millard had inappropriate contact with the two firms, and with JPMorgan (JPM, Fortune 500) also, at a time when the agency was in the process of selecting them to manage money on its behalf (PBGC has since revoked the contracts). Whether or not he actually stepped across legal lines, Millard seems to have shown poor judgment.
On the other hand, it's a fair bet President Bush's team picked him for the job hoping he would, up to a point, take advantage of his financial background and Wall Street contacts. After all, that back and forth can be helpful if it genuinely keeps both sides better informed. Drawing that line is difficult for any official.
It doesn't help that Washington and Wall Street share a revolving door. Perhaps the least edifying of the emails recently unearthed by the New York Times involve Millard apparently using his contacts to tout himself around for a financial sector job in anticipation of leaving office. He hasn't taken one yet, and he isn't allowed to join a firm he helped select as a government contractor for at least a year.
Overall, it's not a pretty story. But change the names, organizations and even the country, and it's easy to imagine similar interplay between business and government the world over. The U.S. and other places have rules designed to block the worst excesses. But even the best rules can't outlaw human nature or substitute for sound judgment. 
-
The retail giant tops the Fortune 500 for the second year in a row. Who else made the list? More -
This group of companies is all about social networking to connect with their customers. More -
The fight over the cholesterol medication is keeping a generic version from hitting the market. More -
Bin Laden may be dead, but the terrorist group he led doesn't need his money. More -
U.S. real estate might be a mess, but in other parts of the world, home prices are jumping. More -
Libya's output is a fraction of global production, but it's crucial to the nation's economy. More -
Once rates start to rise, things could get ugly fast for our neighbors to the north. More
