Ken Bentsen was “kind of startled” when he received the telephone call.
On the other end of the line this past summer was the president of the Securities Industry and Financial Markets Association (SIFMA), the trade group that represents Wall Street banks. Tim Ryan wondered if Bentsen would consider taking a job as head of the Washington office.
Some might find that kind of offer intimidating. Bentsen, a former House Democrat from Texas who spent eight years in the middle of some of the most challenging financial issues, saw it another way.
“The challenge was too enticing,” said Bentsen, 50, in an interview in his corner office, fresh off his first few weeks on the job at the association with modern glass offices and an electronic stock crawler.
Bentsen is taking the reins as the group’s executive vice president as both the financial industry and SIFMA look to rebuild from the crisis.
There was rampant speculation on K Street about who would fill the job, with much of the industry expecting a former George W. Bush administration official or prominent bank lobbyist.
Bentsen offered a formidable résumé. He’s a former member of what is now the House Financial Services Committee. He’s a well-established centrist Democrat, a factor not to be overlooked with his party now in control of the White House and Congress.
He also understands the association world. He served as the president of the Equipment Leasing and Finance Association, a trade association, for more than three years and worked earlier at Public Strategies. He left the House in 2002 following an unsuccessful Senate bid.
When he accepted the job at SIFMA, which represents a range of financial firms, lobbyists cheered.
“He is widely respected by members of both parties,” said Rob Nichols, president of the Financial Services Forum. “He has good industry as well as policy relationships, and, I think, has great leadership abilities.”
Bentsen is coming on as the association attempts to put the worst of the crisis behind it. The group recently hired Carter McDowell from the American Bankers Association (ABA) and may beef up its offices in Washington, New York City and London.
“We’re looking at those assets to see where we need to add things and will do so accordingly,” Bentsen said. “We’re on steady ground.”
The “resolution authority” proposal has drawn sharp criticism and pits the association against most Republicans, who argue that it promotes government bailouts. That’s a view the Obama administration and Bentsen sharply refute.
“I think it’s quite the opposite,” Bentsen said. “We want this to happen. It’s not a situation where we’re slow-boating this or throwing up roadblocks.” The government, Bentsen said, should not be faced with a crisis with only “20th-century tools.”
In the massive and nuanced debate about new regulations for over-the-counter derivatives, SIFMA wants more transparency, but is opposed to mandatory trading on public exchanges.
Bentsen brings his years on the House committee to the association at a critical time in the overhaul. Elected to the House in 1994, Bentsen represents one of the last in a long line of “Tory Democrats,” or conservative Democrats, from Texas, said Cal Jillson, a political science professor at Southern Methodist University. The late Lloyd Bentsen, his uncle, was a senator from Texas and former Treasury secretary under the Clinton administration, and both played key roles on financial issues.
“I don’t look at it from an R or D perspective,” Bentsen said of financial debates. “I think at the end of the day, when you cut through all of this, you’re going to see that there is an opportunity for more bipartisanship on these issues.”
In the House, Bentsen was a member of the centrist New Democrat coalition, which continues to have a major say in financial legislation.
Bentsen supported legislation at the end of the 1990s that was intended to modernize the financial system, but that some now look back to with biting criticism.
In his office, Bentsen keeps a framed copy of the signing ceremony for the Gramm-Leach-Bliley Act that allowed investment banks, commercial banks and other financial firms to merge to become massive companies like Citigroup.
“I have no regrets,” he said. “I personally don’t believe you can look at Gramm-Leach-Bliley and say that’s what caused us to get in this position. I think that where you had situations of perhaps too much leverage or insufficient underwriting could have happened under the old regime.”
Similarly, the derivatives market is widely blamed for exacerbating the financial crisis last year, and critics have scrutinized legislation at the end of the Clinton administration that left the over-the-counter market unregulated. “At the time, what that bill was trying to do was reflect where the marketplace had gone,” Bentsen said. “Now, we can always look back … ”
Bentsen said he hasn’t been a pure lobbyist in his post-House career, but what drew him to the job was the scope of the debate now under way.
“It’s a little different being in there and to be back on these particular issues, but that also is enticing,” he said.