Progressives pressure Hillary Clinton on Wall Street bonuses

Reuters News
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Posted: Aug 26, 2015 12:03 AM

NEW YORK (Reuters) - Eight groups representing the U.S. Democratic Party's progressive wing planned to call on Hillary Clinton on Wednesday to disavow the controversial practice of Wall Street firms paying bonuses to executives who leave for government jobs.

The groups is also asking in a letter that Clinton, the favorite to win the party's nomination for the 2016 presidential election, endorse a proposed federal law that would ban "golden parachutes", as the bonuses are sometimes known.

Clinton's two main rivals for the party's nomination, Vermont Senator Bernie Sanders and former Maryland governor Martin O'Malley, have already said they support the Financial Services Conflict of Interest Act.

The legislation, introduced this past July, would ban incoming government employees from accepting such bonuses from their former private sector employers.

It would also require senior government regulators to recuse themselves from any work that would particularly benefit any employer or client they had in the two years before joining the government.

Progressives criticize the practice of giving generous bonuses to executives for quitting to take high-level government regulatory jobs, saying it creates the presumption that the executives will work mainly to benefit their former employers rather than serve the broader public.

"At worst, it results in undue and inappropriate corporate influence at the highest levels of government – in essence, a barely legal, backdoor form of bribery," the groups wrote in their letter.

The letter was signed by Rootstrikers, American Family Voices, Democracy for America, MoveOn.org and four other groups that campaign for progressive policies. An advance copy of the letter was given to media outlets.

Spokesmen for Clinton have previously declined to say whether she supports the proposed law. It remained unclear how Clinton or her campaign might respond to the letter.

Clinton, who has said increasing the wealth of middle-class Americans would be her focus if she wins the presidency, has received generous support from Wall Street for her political campaigns and she and her husband, former president Bill Clinton, have made millions of dollars by giving paid speeches to financial companies.

She has called for increased oversight of the riskier activities of Wall Street firms. However, her campaign said she was still in the process of publicizing specific policies, risking the impatience of some in her party who want tougher regulations on the financial industry.

(Reporting by Jonathan Allen; Additional reporting by Luciana Lopez; Editing by Toni Reinhold)