Saturday, September 20, 2014

Mark Brnovich proposes legislative fix to close Revolving Door loophole

Rotellini leaves regulator’s post to profit off insider knowledge
The State of Arizona and more than 31 fellow states have passed laws to prohibit public officials from leaving elected office and immediately lobbying the government body they just departed.

The reason for these so-called “cooling off” periods is simple: Elected officials shouldn’t see their time in public service as the setup for a private-sector payday. And taxpayers should have confidence that elected officials are representing the public’s interest while in office, not special interests.

In Arizona, State law prohibits legislators and public officers from lobbying for at least one year after leaving elected office. For at least two years, public officers may not disclose for personal gain any confidential information.

But there’s a gaping loophole in the law: The statute doesn’t apply to State regulators, the very individuals perhaps best positioned to game the system.

Once elected Attorney General, Mark Brnovich will propose legislation to extend the State “cooling off” statute for elected officials to top State regulators who serve in a supervisory and decision-making capacity.

Take the case of Felecia Rotellini. From 2006 to 2009, she was Superintendent of the State Banking Department (subsequently renamed the Arizona Department of Financial Institutions). According to the AZDFI website, the agency “is statutorily charged with licensing, supervision and regulation of State-chartered financial institutions and enterprises,” and ensures “the safety and soundness of the financial services industry in Arizona.”

Yet, after heading this organization for the better part of four years, Rotellini left in August 2009 and immediately went to work for local law firm Zwillinger, Greek & Knecht. The firm says it represents a range of “Fortune 100 and multinational corporations.” Rotellini promotes her services to banks, credit unions and other financial institutions this way:

“Ms. Rotellini is an expert in administrative law with her background as both a lawyer for state agencies and as the ultimate decision maker when she was the Superintendent of the Arizona Department of Financial Institutions. She provides advice and counsel to businesses and individuals regarding regulatory and administrative issues in a myriad of situations. She leads the firm’s administrative law practice and regularly guides businesses through licensing processes with state agencies and how to best respond to government examinations and inquiries.
“Ms. Rotellini brings her perspective as a former prosecutor and regulator to the representation of her clients, such as community banks and credit unions, mortgage and other financial services companies, and individual licensed professionals.  She is currently representing clients before professional licensing boards, in administrative disciplinary proceedings, and during investigations and enforcement actions by agencies such as the Arizona Department of Financial Institutions (ADFI), the Arizona Board of Appraisal, the Arizona Board of Accountancy and the Arizona Attorney General’s Office.
In other words, Rotellini was Arizona’s top regulator with the sole duty to serve as a watchdog over the banking industry and safeguard consumers. But she left State government in order to cash-in on that knowledge – immediately going to work for the very same banks and credit unions she had been entrusted to watch over.

“Arizona taxpayers are right to be sick of this kind of Revolving Door political gamesmanship. As a State regulator, Felecia Rotellini was entrusted to look after Arizona consumers. But now she uses her insider knowledge to help big banks cheat the system,” Brnovich said. “When I’m Attorney General, I’ll work with legislators and the Governor to close this loophole and make certain the lobbying ‘cooling off’ period for legislators is applied to top State regulators, as well.”

1 comment:

Frank Morris said...

And how long til this fix actually gets into place, if ever? 5 Years? Things like this happen far too slowly...