In the aftermath of his stunning electoral defeat against Tea I party-backed challenger, David Brat, in the 2014 House Republican primary in Virginia, Eric Cantor soon vacated his political seat in Washington DC to join a Wall Street investment firm.
On Sept. 2, the firm, Moelis and Company, reportedly hired the former Republican congressman as the new vice chair- man and managing director. It was stated that Cantor would be elected to a position on the company’s board of directors as well. He is intended to receive a combined total of US$3.4 million from his estimated salary and other projected earnings throughout 2014 and 2015 for his services.
According to a Moelis and Company press release, Eric Cantor, among other duties, will, “provide strategic counsel to the Firm’s corporate and institutional clients on key issues.” While Cantor may certainly favour this opportunity, some individuals have essentially showcased skepticism when con- sidering Moelis and Co.’s intentions.
As such, given the status he built within the Republican Party inside the House of Representatives, this recent career transition has been perceived as a major cause for concern.
After serving nine years in Virginian state politics from 1992 to 2001, Eric Cantor was soon elected to Virginia’s seventh congressional district seat in January 2001, where he remained until his resignation on Aug. 18.
Within that timeframe, he performed various crucial legislative roles in the Republican-controlled House, eventually earning the post of House Majority Leader in 2011. Cantor and fellow Republican John Boehner, whom became Speaker of the House, asserted their political dominance over various legislative matters and issues, ranging from corporate taxation to immigration reform.
In general, the relatively low profile investment bank is being harshly accused of only appointing Cantor for the sole purpose of increasing their lobbying presence on Capitol Hill in Washington DC. Democratic Massachusetts Senator, Elizabeth Warren, a potential contender in the 2016 presidential race, openly criticized him for the decision.
She said people like Cantor, “head straight out into the industry, not because they bring great expertise and insight, but because they’re selling access back in to their former col- leagues who are still writing policy, who are still making laws.” Sheila Krumholz, an executive director for the Center for Responsive Politics, a nonpartisan organization that studies the dynamic of money and politics, shared similar sentiments when attempting to understand this event.
Cantor fits the description of an ex-elected official offering insider advice that can influence US legislation far more effectively than registered lobbyists, as expressed by Krumholz. Formerly a 13-year leading Member of Congress, it is now presumed that Cantor is perfectly positioned to utilize his distinct political insight to further Moelis and Co.’s business interests.
Eric Cantor was even considered a key legislative ally to Wall Street’s financial industry. From a New York Times article, some of his pro-business actions included fighting any White House proposals that imposed higher taxation rates on private equity firms. Additionally, during this election period, he obtained US$5.4 million in campaign contributions from firms like Goldman Sachs and Blackstone Group.
Despite these previous ties, opposition has been constructed to refute this claim that Cantor will virtually be a lobbyist to unfairly benefit Moelis and Co., or Wall Street for that matter. For legislation regarding financial regulation, Bloomberg View’s Matt Levine argued if Cantor aggressively spearheaded financial deregulation it would negatively impact Moelis and Co., as they gain much of their business from delivering advice to clients related to navigating intricate regulations.
Overall, it seems appropriate to label Eric Cantor as a clear political insider, but it is yet to be determined how his new working relationship with Moelis and Company will truly unfold.