Startling evidence has been revealed that a June letter signed by 32 House Democrats opposing new regulations on retirement advisors was written by an employee of a financial-industry lobby group working to stop that legislation.
According to the metadata of a Microsoft Word document, which
indicates who first created the letter and subsequently edited
the file, it was drafted by Robert Lewis, a lobbyist working for
the Financial Services Institute (FSI), an investment industry
trade group. Mother Jones published its findings on Thursday
after it obtained the document.
The June 14th correspondence sent to the Department of Labor
opposes new regulations on retirement advisers. Twenty eight out
of 43 members of the Congressional Black Caucus (CBC) signed onto
the letter, along with Democratic congress members Pedro
Pierluisi of Puerto Rico, Tulsi Gabbard of Hawaii, Ed Pastor of
Arizona, and Jim Costa of California.
Though influence by lobbyist and special interests are often
inferred through campaign contribution records, the publication
of evidence showing that a letter sent by congress to a federal
regulatory body was literally
penned by a lobbyist is in itself remarkable.
“This rule is about protecting people from conflicts of
interest,” said Phyllis Borzi, the Department of Labor’s
assistant secretary for employee benefits security, who is behind
a regulatory push for stronger investment adviser rules.
The new legislation is aimed at protecting low-income workers
from predatory investment counselors, who may be acting in their
own best interest rather than that of their customers.
Even those earning comparatively little in the US can end up
seeking the advice of investment counselors when moving their
retirement nest eggs from employee-sponsored 401k plans into
other forms of retirement accounts.
As Mother Jones reports and has been widely investigated by other
publications, financial advisers often stand to profit by leading
investors into unnecessary high-fee investments. Ten million
people in the US change jobs and must handle their retirement
funds each year, according to data provided by the Congressional
Research Service.
Accordingly, it has been a main concern of the lobbying group
Robert Lewis works for, the Financial Services Institute,
to oppose new regulations on behalf of the financial investment
industry.
FSI has spent $196,000 so far lobbying in the first quarter of
this year, nearly half the total it spent in all of 2012.
According to disclosure forms filed by the group the proposed new
investment adviser rule is at the top of its lobbying issues.
The liberal lawmakers who signed onto the letter drafted by Lewis
have received tens of thousands in campaign contributions from
the securities and investment industry.
According to a copy of the document, it cautions the US Labor
Department against enacting new regulations on retirement
advisors, warning that strict new rules could push them to
abandon the market and severely limit access to low-cost
investment advice” for “the minority communities we
represent.”
FSI has so far not responded to requests for comment on the
ghostwritten letter.
Republished from: RT