Bad Connection
The controversy surrounding former Republican uber-lobbyist Jack Abramoff has engulfed a key member of the House Financial Services Committee, Rep. Robert Ney.Rep. Ney's attorney confirmed in a Nov. 18 Associated Press report that the Ohio Republican was the lawmaker referred to as "Representative No. 1" in a Nov. 17 indictment against public relations executive Michael Scanlon.
On Nov. 21, Mr. Scanlon pleaded guilty to conspiring with Mr. Abramoff to bribe that same Representative No. 1. The plea agreement also said that the lawmaker or members of his staff received all-expenses-paid trips to the South Pacific, the Super Bowl, and Scotland, along with tickets to sporting and entertainment events.
In exchange, the agreement says, the lawmaker or his staff pushed legislation or contacted executive branch agency officials on behalf of Mr. Abramoff's clients.
Until his links to Mr. Abramoff were revealed, Rep. Ney had been considered a long-shot candidate to chair House Financial Services in 2007.
Rep. Ney's office released a statement saying the congressman had not done anything wrong.
"All that this plea agreement shows is that Mr. Scanlon had a deliberate, secret, and well-concealed scheme to defraud many people, and it appears, unfortunately, that Rep. Ney was one of the many people defrauded," the statement said.
Big-Bank Letdown
Ben Bernanke, the Federal Reserve Board chairman-designate, offered some grim news for big banks hopeful that Basel II would result in a large decline in capital requirements.An interagency study completed this spring showed that Basel II would lead to a capital level drop of at least 26% in half of the 26 banks that participated. The study, known as QIS-4, was slammed on Capitol Hill.
But Mr. Bernanke said that such capital drops would not be allowed when Basel II goes into effect in 2012.
"I am sure that the Federal Reserve and the other agencies will not countenance declines in capital of the amount that QIS-4 found for some banks," he wrote in answers to questions submitted by Sen. Jim Bunning, R-Ky., which were released last week.
There was more disappointment for those who thought Mr. Bernanke might have a different view than his predecessor, Alan Greenspan, about the need for portfolio limits on Fannie Mae and Freddie Mac.
Mr. Bernanke made it clear he supports portfolio limits.
"The GSE regulator's constrained capital authority, the ineffective receivership process, and other limitations weaken regulatory oversight of GSEs," Mr. Bernanke wrote. "Capping the size of GSE portfolios, which beyond a certain size do not contribute to the GSEs' housing mission, is also important for controlling potential systemic risk."
Passing the Baton
John R. Price will be the Federal Home Loan Bank of Pittsburgh's next president and CEO.Mr. Price, 66, starts his new job Jan. 2. He will succeed James D. Roy, 65, who is retiring at yearend.
Mr. Price, a Rhodes scholar, has been senior adviser to the Institute of International Finance since 2001, and he spent nearly 30 years at what is now JPMorgan Chase & Co.
In Recognition
The University of Massachusetts at Amherst honored Sen. Paul Sarbanes Nov. 21 for his work on the Sarbanes-Oxley Act and his 30-year tenure in the Senate.The Maryland Democrat was also a guest lecturer for an MBA class co-taught by former Treasury Department official Sheila C. Bair, who is now a professor of regulatory policy at the U. Mass. business school.
