The Investment Company Institute, the lobbying arm for the mutual fund
industry, has not endorsed private accounts nor has it lobbied
Congress on the matter.
But while its members are reluctant to speak out publicly on the
topic, the institute recently hired as its communications director F.
Gregory Ahern, a former executive at State Street Corporation in
Boston who was involved in that firm's aggressive lobbying effort for
private accounts during the late 1990's.
Behind the scenes, the Alliance for Worker Retirement Security, a
business coalition advocating private accounts, has begun meeting with
Congressional and White House staff members, pushing the idea that
private accounts are not only good for the country but also good for
business.
In November, Derrick A. Max, the alliance's executive director, met
with Charles P. Blahous, a special assistant to the president who has
been at the forefront in the White House on Social Security.
They have a strong connection, because Mr. Blahous preceded Mr. Max at
the alliance.
At the meeting were representatives from the Securities Industry
Association, Charles Schwab & Company, and the United States Chamber
of Commerce, all members of the alliance.
The Club for Growth, a group financed largely by conservative business
leaders that supports like-minded Congressional candidates, has also
been active in the drive for privately held Social Security accounts.
Members include Richard Gilder of Gilder Gagnon Howe & Company, a
private investment firm, and Charles H. Brunie, the founder of
Oppenheimer Capital.
The club, which is run by Stephen Moore, who once served as economic
adviser to the former House Republican Leader ***** Armey, recently
sent out a memorandum to its backers proposing a $15 million public
relations and grassroots campaign in favor of private accounts.
This increase in activity is occurring against the backdrop of a
long-running campaign by the Cato Institute, a Washington policy
research and lobbying organization with libertarian leanings that has
received financial support from, among others, American Express and
the American International Group, the large insurance company.
State Street also provided funds in the past to support the
institute's efforts to persuade Congress of the merits of personal
accounts.
Opponents of personal accounts, led by labor unions and some state
pension funds, accuse these groups of acting as a stalking horse for
the financial industry.
"Our sense is there is a lot of activity behind the curtain," said
Bill Patterson, the director of the office of investment at the
A.F.L.-C.I.O.
"There is a dangerous confluence between the industry and the
ideologues of the right. These groups can't do it by themselves - they
need the covert and overt support of the financial services industry."
Many top Wall Street executives are strong supporters of President
Bush and are philosophically in agreement with the idea of applying
the independence of the capital markets to the Social Security
program.
They have raised millions of dollars in campaign contributions:
Morgan Stanley and Merrill Lynch were among the top corporate
supporters of the president's re-election campaign, raising over $1
million combined, according to the Center for Responsive Politics, a
nonpartisan group that tracks political contributions and campaign
spending.
From The New York Times, 12/21/04:
http://www.nytimes.com/2004/12/21/business/21lobby.html?hp&ex=1103691600&en=d5bc271b9b19e0a0&ei=5094&partner=homepage
Wall St. Lobby Quietly Tackles Social Security
By LANDON THOMAS Jr.
As President Bush prepares to disclose the details of his plan to
funnel hundreds of billions of dollars of future Social Security funds
into privately held investment accounts, Wall Street has begun a muted
lobbying campaign, chastened by bolder forays that failed in years
past.
So far, the chief executives of most financial firms have refused to
take a public stand in support of private accounts, wary of being seen
as too eager to embrace a potential new revenue stream.
At last week's White House economic meeting in Washington, they were
conspicuous in their absence from the Social Security panel.
Even in direct meetings with President Bush, who actively campaigned
on the issue of Social Security, executives have shied away.
There are signs, however, that the industry is becoming a little more
aggressive in pushing for private accounts, through a loose assemblage
of trade associations, business coalitions and conservative research
centers.
These groups have lately begun trying to raise money from business
interests and to marshal support on Capitol Hill, while also seeking
to deflect criticism that Wall Street is behind the move simply to
reap rich rewards for administering the accounts.
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SURPRISE!
Harry
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