Perception is reality and the Networks own the perception. Thus, be afraid, very afraid. You will soon hear the Goldman Sachs salary and commissions of Hank Paulsen @ 700 Million US$ was actually "well deserved". Shouldn't we pay for the best brains in the world?
Wall Street Begins Campaign to Thwart "Populist" Overreaction
June 25 (Bloomberg) -- Wall Street’s largest trade group has started a campaign to counter the “populist” backlash against bankers, enlisting two former aides to Treasury Secretary Henry Paulson to spearhead the effort.
In memos of confidential meetings with top financial executives, the Securities Industry and Financial Markets Association said it began this month the “execution phase” of the operation, which pledges to “embrace change” and accountability. The plan targets policy makers and the media in New York, London, Washington and Brussels and calls for a “city-by-city, grass roots” approach.
The securities industry “must be perceived as part of the solution, which will allow it to better defend against populist overreaction,” the documents, prepared for a June 17 meeting of SIFMA’s board, said.
The board meeting minutes and staff-written papers, obtained by Bloomberg News, outline the program crafted by polling, lobbying and public relations companies paid at least $85,000 a month. The memos provide a glimpse, in often candid language, into how Wall Street is grappling with its pariah status.
“It is imperative that in this historic period of reform, the industry be recognized as playing a positive role in seeking change and providing solutions to the problems we face,” one of the documents said. “There is currently widespread skepticism about the industry’s commitment to this needed change.”
The internal papers call for using regional securities firms, many of which have escaped notoriety in the financial crisis, to push the industry’s message with their local members of Congress. The plan notes that brokers across the country can also be used.
“The foot power of the private client group has proven to be effective in blunting populist messages in the past,” said board member Paul Purcell, chief executive officer of Milwaukee investment firm Robert W. Baird & Co., according to the minutes of one meeting.
To advise on the strategy, the trade group turned to a bipartisan roster of consultants. Such advice doesn’t come cheap and SIFMA is discussing dipping into its reserves to cover some of the costs, according to one memo.
Michele Davis, Paulson’s former spokeswoman, and Jim Wilkinson, his former chief of staff, are among those leading the effort. SIFMA is paying their firm, Brunswick Group LLC, a monthly retainer of $70,000, the documents show. Both Davis and Wilkinson declined to comment. Paulson left office in January.
Assisting them is a Democratic polling company, Brilliant Corners Research and Strategies, which is paid $5,000 a month. It is run by pollster Cornell Belcher, who worked on President Barack Obama’s campaign. BKSH & Associates Worldwide, a lobbying firm chaired by Republican strategist Charlie Black, signed on for $10,000.
In response to questions about the push for an image makeover, SIFMA President Timothy Ryan said the organization has taken a lead advocating for a federal systemic risk regulator and has pushed for increased government power to wind down financial firms that don’t own banks. He also touted the group’s recently issued recommendations on executive compensation.
“This effort, which is not uncommon for a trade association, is designed to ensure our ideas for improved accountability, oversight and transparency are heard by the widest possible audience,” Ryan said.
The industry has “a duty to help craft a solution, so we’ll continue leading by example in our efforts to properly safeguard our financial system and serve the needs of the overall economy, local communities and individual investors,” he added.
SIFMA represents about 600 securities firms, brokerages and asset-management companies. It counts among its members the biggest U.S. banks, including Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co., which have received capital injections from the $700 billion Troubled Asset Relief Program. Bloomberg Tradebook, a broker-dealer subsidiary of Bloomberg News’s parent Bloomberg LP, also belongs.
While financial companies’ lobbying clout has been reduced in the crisis, SIFMA’s memos said that Wall Street can’t afford to be left out as the Obama administration and Congress push for increased oversight, executive-pay limits and other restrictions likely to affect the industry for decades.
“The mess is so big that we all have to work together,” minutes from one meeting said.
‘Lot of Anger’
The group’s polling “indicated that there is a lot of anger out there and feelings that the industry is not focused,” the minutes said. While “Wall Street and CEOs” received low scores, local banks and brokers got better marks.
The outside consultants join SIFMA staff for a daily 10:00 a.m. conference call, “given the importance, complexity and real-time nature of the campaign style-implementation,” according to one of the memos.
Still, that kind of approach may not be enough for Wall Street to lift its reputation, said Bill Brown, a visiting professor at Duke University School of Law in Durham, North Carolina.
“It’s right for them to try to come back from this, but they have to realize that they are not going to be reborn into what they were,” said Brown, who was global co-head of listed derivatives at Morgan Stanley. “The best P.R. comes from doing good, not from having to manage your image.”