Securities industry lobbyist Steve Judge has been sucked into a Washington club he did not mean to join.
Nearly 20 years after leaving Minnesota to become a congressional staff member, the Securities Industry Association lobbyist belongs to the clique of political insiders who have devoted their careers to tearing down laws that wall off banking from other businesses.
"I never thought I would be putting my kids through school on Glass- Steagall," he said with amazement recently in his swank office in downtown Washington.
As the association's senior vice president of government affairs, Mr. Judge represents roughly 780 securities brokerages and investment banking firms nationwide.
In his vision of 21st-century finance, commercial banks, investment houses, insurance agencies, and others will affiliate with one another. The holding companies of these diversified financial services firms will embark unfettered on nonfinancial commercial ventures, Mr. Judge says.
The association's constituents advocate functional regulation of trading, meaning the Securities and Exchange Commission would regulate securities activities conducted by any type of company. And bank and securities operations should be kept separate even when owned by the same company, according to the Securities Industry Association.
Longtime relationships among Mr. Judge and veteran lobbyists from banking and other financial services industries led to the creation of the Alliance for Financial Modernization about two years ago. The alliance has established common ground among groups that historically butted heads.
"Steve was certainly instrumental in getting that up and running," says Edward L. Yingling, executive director of government relations for the American Bankers Association.
The Securities Industry Association hired Mr. Judge in 1991, about the time the trade group reversed its opposition to Glass-Steagall reform. He had been deputy staff director of the House Banking Committee and legislative director for Rep. Bruce F. Vento, D-Minn.
His baptism of fire on House Banking came during passage of the Competitive Equality Banking Act of 1987, says Paul Nelson, a partner with the law firm Royer & Babyak in Washington. That law put the brakes on nonbank banks.
Mr. Judge deftly handled a "three-ring circus" of special interests during House-Senate negotiations and contributed mightily to the act's passage, says Mr. Nelson, the committee's former staff director.
He adds that Mr. Judge, 44, has all the attributes of a successful Washington lobbyist: knowledge of process, substance, and people, as well as an honest reputation that opens doors.
Today Mr. Judge juggles many federal issues of concern to securities firms, such as capital gains tax cuts and establishment of uniform national standards for class actions. But he spends most of his time on financial modernization.
The Securities Industry Association generally likes the reform bill passed by the House Banking Committee in June, he says, but it wants Federal Reserve Board control of financial services companies reduced and the SEC-not banking regulators-to oversee securities work at banks.
The association also is fighting to restore provisions eliminated by the House Commerce Committee that would permit a mixture of banking and commerce.
"I still think there is a better than fifty-fifty chance of legislation passing the House and Senate in the next two years," he says. "It's time for all of us to put this issue behind us and move on."