Newly installed Treasury Secretary Timothy Geithner issued new rules Tuesday restricting contacts with lobbyists – and then hired one to be his top aide.
Mark Patterson, a former advocate for Goldman Sachs, will serve as chief of staff to Geithner as the Treasury Department revamps the Wall Street bailout program that sent an infusion of cash to his former employer.
Patterson’s appointment marks the second time in President Barack Obama’s first week in office that the administration has had to explain how it’s complying with its own ethics rules as it hires a bevy of Washington insiders for administration jobs.
Last week, the White House announced the president had waived the ethics rules to clear the way for the nomination of William Lynn, a former Raytheon lobbyist, to be deputy defense secretary.
“This is exactly the kind of thing that makes the American public suspicious of politicians. You say one thing and do another,” said Melanie Sloan, founder of Citizens for Responsibility and Ethics in Washington.
“The problem is Obama set a standard he can’t live with, which was predictable.”
Treasury spokeswoman Stephanie Cutter lauded Patterson’s “long history of public service in the U.S. Senate, both as a staff director of the Senate Finance Committee and policy director for the Senate leader.
“He brings significant expertise to the job of chief of staff and has agreed to a far-reaching ethics pledge to remove any hint of a conflict of interest,” she added.
According to that pledge, Patterson will be prohibited for the next two years from participating in Treasury decisions related to Goldman Sachs and the specific issues on which he lobbied.
Still, Sloan and financial service lobbyists question how Treasury will make those determinations. “Goldman so permeates the markets, how can you separate them out?” Sloan asked.
Patterson was a registered lobbyist for Goldman Sachs from 2005 until April of 2008. Lobbying disclosure forms suggest he represented the financial giant on a wide array of issues, including visas, tax credits for cellulosic ethanol and an Indian gaming facility in New York state.
His reports also list a July 2007 meeting at Treasury, but sources familiar with the meeting say it was an informational session about Goldman’s business practices organized at the department’s request.
The Treasury lobbying rules issued by Geithner Tuesday would restrict department lobbyist contacts connected to applications for funding from the Troubled Asset Relief Program and those associated with banks receiving government assistance.
Geithner also pledged that only banks recommended by top regulators would be eligible for TARP funding and that a detailed description of the review process would be made public.
“American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system,” Geithner said in a statement. “Today’s actions reaffirm our commitment toward that goal.”