Corporate Governance

Government agencies charged with implementing the Dodd-Frank financial reform act are slated to receive additional funding under a continuing resolution (CR) proposed by the House Appropriations Committee. 

A group of business leaders is calling for policymakers to revisit two of President Obama's key legislative achievements — healthcare and financial regulatory reform — as well as take additional steps to boost the economy by supporting the private sector.

The plan comes as the Obama administration works to dispel the notion that it is anti-business, even as it fends off attacks from the left over its agreement with Republicans to extend tax breaks for all Americans.

Martin McGuinness, a former special assistant to President George W. Bush and a top lobbyist for the American Insurance Association, is joining the Unum Group, a Chattanooga, Tenn.-based insurance company, later this month.

McGuinness will serve as vice president of government affairs for the company in its Washington office.

“I’m thrilled to have the opportunity to join this industry leading company,” McGuinness said. “Federal legislation and regulation continue to have an increasing role in financial services, and I’m looking forward to helping Unum engage in Washington in a positive and productive way.”

“Marty has a solid understanding of both government relations and the financial services industry,” said Scott Maker, senior vice president and chief government affairs officer at Unum. “His depth of experience and his insight into these sectors make him a fine addition to our team.”

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Taxpayers have made an extra $1.8 billion on the initial public offering of General Motors's new stock after underwriters came back for second helpings of the government's share of the stock.

Sen. Bernie Sanders (I-Vt.) said the Federal Reserve's recent disclosure about transactions it undertook during the financial crisis lifted the "veil of secrecy" at the Fed, one that he wants to further expand with congressional investigations.

A retooled General Motors debuted to the largest initial public option in American history on Thursday.

American business leaders are concerned about the pressure they feel to donate to political campaigns and the influx of large, undisclosed donations to third-party political organizations that are not required to disclose their sources of funding, according to a new Zogby poll commissioned by the Committee for Economic Development (CED). 

The survey found that 60 percent of the over 300 business leaders polled say there is pressure to contribute to political efforts. 

Treasury Secretary Timothy Geithner is aiming to put to rest what he calls five “myths” about the controversial Troubled Asset Relief Program, which expired last week and was born at the peak of the financial crisis in 2008.
 
Geithner — in an op-ed published Sunday by the Washington Post — argues TARP “was doomed to be unpopular from inception, because Americans were rightfully angry that the same firms that helped create the economic crisis got taxpayer support to keep their doors open.”

But, he added, the program “was essential to averting a second Great Depression, stabilizing a collapsing financial system, protecting the savings of Americans and restoring the flow of credit that is the oxygen of the economy. And it helped achieve all that at a lower cost than anyone expected.”
 
He said the argument that TARP cost taxpayers hundreds of billions of dollars is a myth. The true cost of TARP, he said, “will be considerably lower than once feared.” The direct budget cost of the program and the full investment in the insurer AIG is likely to be “well under $50 billion — $300 billion less than estimated by the Congressional Budget Office last year.”
 
He said taxpayers are also “likely to receive an impressive return (totaling tens of billions)" on the investment outside the housing market.
 
He said a second myth was that TARP was merely a gift for Wall Street that did nothing for common folk.

“To protect Main Street from the damage caused by a financial crisis, you must first put out the financial fire,” Geithner wrote. “That is precisely what the government did.”
 
TARP did not leave the financial system weak, he wrote. “The U.S. financial system has been completely overhauled and is in a much stronger position today than before the crisis,” he wrote. “In fact, the weakest parts of the system are gone.”
 
The U.S. banking system, he wrote, is still less concentrated than those in other major countries and is a comparatively smaller share of the economy.
 
“We have 7,800 banks, not two or five, and we are less dependent on banks overall for credit, with securities markets and other financial institutions providing roughly half of all credit to businesses and individuals,” he wrote.
 
Finally, Geithner asserted TARP was not a centerpiece of any strategy by President Obama to assert more government control over the economy, noting it was created by former President George W. Bush, who committed nearly $300 billion for the program when he was forced to take over lenders Fannie Mae and Freddie Mac and lend billions to the auto industry and guarantee money-market funds. It was also “championed by the same Republican congressional leaders who are in office today,” he wrote. “They deserve more credit for the courage they showed than they seem willing to accept now."
 
Obama, Geithner argued, “adopted a strategy designed to get the government out of the private sector as quickly as possible” and that the U.S. government has recovered more than $200 billion in TARP funds and made $28 billion in profits.
 
“And, in the end, 90 percent of that once-feared $700 billion TARP price tag either will not have been spent or will be returned to the taxpayers,” he wrote.

The computer-automated sale that created the "flash crash" was too large and moved through the market too quickly.

Two of the country's largest business lobbying groups sued the Securities and Exchange Commission (SEC) on Wednesday, challenging new rules designed to empower shareholders in corporate board elections.

The U.S. Chamber of Commerce and the Business Roundtable said the SEC rules are "special-interest driven" and benefit labor unions and activist investors. The groups are seeking a permanent injunction against the SEC rules taking effect.

"The SEC’s proxy access rule empowers unions and other special interests at the expense of the vast majority of retail shareholders,” said David Hirschmann, president and CEO of the U.S. Chamber’s Center for Capital Markets Competitiveness. 

The "proxy access" rule, approved in August, provides greater power for shareholders to nominate candidates to corporate boards. Under the rules, investors who hold at least 3 percent of outstanding shares for at least three years will be able to nominate candidates on ballots distributed by companies.

John Nester, SEC spokesman, defended the rule in a statement issued after the lawsuit was filed. 

"We believe that the commission’s proxy access rules are both lawful and in the best interests of the public and shareholders," Nester said. "The commission will, of course, carefully consider and timely respond to the motion for a stay."