If you’ve been paying attention to the financial news lately, you have probably seen the name Benjamin Lawsky turning up with somewhat rabid frequency. Lawsky is New York State’s first Superintendent of Financial Services – a job that didn’t exist until three years ago – and he is also first in line when it comes to threatening financial providers over the way they conduct business.
Indeed, his challenging nature is so strong that he has earned an international reputation: the Swiss publication Le Temps dubbed him the “bête noire des grandes banques internationals” while the French Les Echos called him “la terreur de Wall Street.” Closer to home, media outlets that veer to the left have made Lawsky their newest hero. The Village Voice sang his praises with an article called “Benjamin Lawsky: The Man Who Picked a Fight With Wall Street,” and The New Republic recalled an Elizabeth Warren wisecrack in a headline that read “Benjamin Lawsky: The Toughest Cop on Wall Street.” Business Insider used a diuretic-inspired image in the headline of its 2012 coverage: “Meet The Wall Street Regulator Who Pissed Off The Fed, The Treasury, And The Entire City Of London.”
If Lawsky seems to be enjoying a surplus of attention, it is not because the media stumbled upon him by accident. Lawsky is a protégé of Andrew Cuomo, a politician that elevated the art of taxpayer funded self-promotion to reckless depths.
According to a Cato Institute report, Cuomo’s stewardship as secretary of the U.S. Department of Housing and Urban Development (HUD) was a prolonged exercise in self-congratulatory accolades: In the year 2000, HUD issued 302 press releases in 331 working days, with the majority of the press releases citing Cuomo’s role as department secretary in the headlines.
As New York Attorney General, Cuomo cynically used the subprime crisis to begin highly publicized investigations of companies that were not headquartered in his state, including the pre-conservatorship Fannie Mae and Freddie Mac. No other regulator shared in Cuomo’s highly publicized investigations, yet Cuomo’s image as a tough warrior against bankers helped get him elected governor (and it certainly helped distract from the troubling facts about Cuomo’s role in creating the subprime crisis during his HUD years).
Lawsky, who was a special assistant to Cuomo during his attorney general tenure and chief of staff after Cuomo became governor, has certainly learned quite a few things from his benefactor when it comes to spinning stories. Together, they are running an aggressively proactive publicity campaign that gives the impression of a political Batman and Robin act that is tirelessly fighting for New Yorkers that have are endlessly victimized by the financial services world. Indeed, Cuomo’s name is cited in the headlines of 14 of the 22 press releases issued by Lawsky’s department during the first five months of this year.
But has anyone stopped and wondered why this second-tier state bureaucrat is getting so much attention? Lawsky’s job combined the superintendent positions at New York’s banking and insurance departments, but none of his predecessors ever held such high visibility. No one of a similar position in the other 49 states has been so visible and litigious.
Furthermore, none of Lawsky’s counterparts in the other 49 states are participating in his various lawsuits and threats. And the federal regulators that are supposedly keeping an eye on how the financial services world operate don’t share Lawsky’s enthusiasm for stopping deals, demanding the firing of executives or questioning the capacity of transactions.
All of this comes at the expense at New York Attorney General Eric Schneiderman, who is allegedly has little admiration for Cuomo. The feeling is mutual, and there is a belief that Cuomo pushed for the creation of Lawsky’s oversized department in an attempt to dilute Schneiderman’s prominence in handling financial investigations.
I realize that these observations may sound cynical, but there has been no shortage of political figures that projected the image of a tough guy fighting Wall Street in order to leverage votes. And I am not ashamed to ask out loud if Lawsky’s actions are being used to build the foundation for a more prominent political career that would benefit himself and/or his mentor Cuomo. We know that Cuomo is a power-hungry publicity hog – is Lawsky merely feeding Cuomo’s ego or has a bit of the old man’s very bad habits rubbed off on him?
Is Lawsky really “la terreur de Wall Street” or is he just another political stooge that loves the spotlight? Let’s keep an eye on this guy – and that won’t be difficult, considering how much he loves to be in the media.
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