Thursday, August 21, 2014

Eric Cantor’s Big Payoff

Don't worry about Eric Cantor, who resigned as House leader shortly after losing the Virginia Republican primary to an even more right-wing candidate. He'll be just fine. Cantor's "public service" career, in fact, epitomizes America's political corruption. He stood for the interests of Wall Street and, in turn, received their campaign donations. Now he's about to collect, as the New York Times put it in an editorial, his "big payoff" as he enters the financial industry and cashes in on the favors he's done:

Mr. Cantor, who was the House majority leader and clearly didn’t want to spend four months as a backbencher, is about to embark on the next phase of his life, which inevitably involves making a lot of money. His aides and colleagues told Politico that he is already looking for a job in the private sector, ideally with a hedge fund, a private equity firm, or a big bank. So let the favor-trading begin.

“He’s got a lot of private-sector friends he has done favors for,” Tom Davis, another former Republican congressman from Virginia, told The Times Magazine a few weeks ago. “I think it would be easy for him to become Eric Cantor Inc. and make a few million dollars a year.”

His attractiveness to the hedge-fund crowd is not, of course, because of his proven acumen managing big money. Before his first election as a state legislator in 1991, he practiced law in his family’s real-estate development firm in Richmond. What he brings to that world are the connections he built in what is still known, innocently enough, as public service.

From his first assignment on the Financial Services Committee, Mr. Cantor courted the favor and the donations of Wall Street. He opposed raising the absurdly low income taxes for private-equity managers, and personally eliminated a requirement that hedge funds disclose how they gather market-sensitive intelligence. He stopped other Republicans from taxing Wall Street banks to pay for tax reform ideas. And he correctly fought Tea Party conservatives who were trying to eliminate the Export-Import Bank and limit terrorism risk insurance, two business priorities that actually do some good.

He has been well rewarded, raising more than $3 million since 1999 from the securities and investment sector. (In the last few years, he has been the top congressional recipient of its generosity.) His close ties to big money were one of the reasons he was defeated by a little-known candidate, but, in the modern calculus of Washington, his work for his patrons is about to produce its real payoff.

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