People's Champion? Rick Lazio Is a Wall Street Creature

His fingerprints are all over the recent economic collapse

Responding in 1992, and again in 1994, to questionnaires from Suffolk Life Newspapers about whether congressmen "should be forbidden by law to lobby Congress" or a federal agency for five years after leaving office, Lazio offered a resounding yes, both times. (Within five months of leaving office in 2001, he was lobbying Congress for Wall Street.)

In fact, all four of the aides who emerge in the memos as Lazio's most influential staff members became lobbyists, too, with JPMorgan retaining one, David Horne, as an outside lobbyist soon after Lazio joined the bank. Horne was so cozy with lobbyists while working for Lazio that ex–Republican Congressman Ray McGrath, who had become Tom Downey's partner in a lobbying firm, wrote Lazio praising Horne's help pushing a bill. Lazio jokingly scrawled on the letter a note to Horne: "Please stop having your family write me about you." The one-man firm Horne created after Lazio lost has cultivated a coterie of clients ostensibly tied to his six years with the congressman—Freddie Mac, the International Swaps & Derivatives Association, and the National Association of Mortgage Brokers.

Another ex-aide, Andy Ehrlich, joined B&D Consulting, a lobbying firm that represented JPMorgan and lobbied Lazio's office while he was in Congress. Ehrlich hasn't worked the JPMorgan account, but his earliest clients included Ranieri & Company and another firm tied to Lazio's former finance chair, Merrick Bank. Ehrlich, a point man in Lazio's office on Gramm-Leach, penned a remarkable seven-page review of "my accomplishments" in his first six months and sent it to Lazio in August 1997. Since Lazio's staff or the archivists appear to have removed the memos Lazio wrote himself, the notes from Ehrlich and other insiders best define the office's culture. Ehrlich started his memo with the celebratory claim that "within the first month of joining your staff, I met with 75 to 100 lobbyists.

AP Images
Lazio worked hard to pass the toxic 
law named after Phil Gramm.
AP Images
Lazio worked hard to pass the toxic law named after Phil Gramm.


Additional reporting by Cat Contiguglia, Sara Gates, Alana Horowitz, Bill Kline, Simon McCormack

"I wanted them to know immediately that I was aggressive and we were going to legislate," wrote Ehrlich. He then detailed "why industry groups appreciate your work," listing the commercial banks "for merging the charter and protecting the operating subsidiaries," the investment banks "for protecting the banker/broker/dealer exemptions," and the insurance companies "for the definition of insurance," all of which were fights Lazio led in the shaping of Gramm-Leach. "Your reputation among the industries has improved considerably," he concludes, listing 13 of the leading financial service lobbyists, starting with JPMorgan's Strupp and including heavy hitters for Citigroup, Merrill, Chase, and AIG, and saying they "would tout my work."

Ehrlich wasn't shy about connecting all this policy work with its natural result: cash. Under the title "I have assisted with fundraising and will do more in the future," he wrote that Ann Costello from Goldman Sachs "has agreed to raise $3,000 in personal money from Goldman Sachs partners," but insisted "that is not enough." Ehrlich also indicated that he had asked Phil Anderson, whose lobbying clients included top banking and insurance associations, "to put together a New York event," adding that "Phil has agreed to arrange a personal money event."

These personal events were distinguished from PAC fundraising, which Ehrlich said he was also organizing. "I made many calls (and organized everyone else's calls, including yours) for your April PAC event," Ehrlich recalled, writing that he had also overseen "the reconfiguration of your PAC Fundraising Call Book." He listed every category of industry types who came before the Commerce Committee, indicating that he was meeting with a lobbyist and committee staff to go through the names and meet with all of them to develop relationships. He assured Lazio that "you are already benefiting from this outreach plan.

"I am committed to playing a larger role here as the Commerce Committee outreach plan and the two fundraisers you held last week attest," he volunteered, indicating that he and Lazio were both oblivious to any of the legal lines that theoretically separate House staff and campaign work, much less any ethical line between working with lobbyists and interest groups on bills while simultaneously extending an open palm in their direction.

This lack of restraint continued into 1998, when Dennis Ryan, another Lazio staffer, e-mailed Ehrlich on May 4, a couple of weeks before the first House vote on what would become the Gramm-Leach bill. Noting that Lazio was scheduled to speak before a New York group of accountants and bankers soon, Ryan said that David Horne "wants someone outside the office to draft an economic speech—NY-centered/internationalist," adding "I was thinking maybe AIG or Travelers," both of which were at the center of the ongoing interest-group pressure for a financial modernization bill.

Ehrlich, who was the aide that met with AIG and got the faxes from Travelers' Roger Levy on Gramm-Leach, replied: "Not Travelers, I've asked them to do some things before, I like AIG." Ehrlich sent Ryan to Brad Welling, AIG's director of federal government affairs, and Welling tried to be helpful, contacting others to supply information to Ryan. "We do not have any relevant prepared speeches in-house," Welling wrote. Ehrlich remained Lazio's legislative assistant until he left the House.

This peek into the Lazio mode of operation was hardly the only moment of scandalous candor in the Lazio file. Lazio's longtime counsel, Ken Trepeta, who was so close to him that he followed him to the Financial Services Forum, where, his Web bio says, "he led successful efforts to reform the nation's class action laws" (similar to Lazio's congressional attacks on such suits), and then to JPMorgan, where he worked as a vice president under Lazio. Before these jobs, he staffed a national commission on senior housing that Lazio created on his way out of the House. Trepeta also worked on Lazio's campaigns, taking a leave for the 2000 race against Clinton.

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