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Campaign aims to repair Wall Street’s image

Group’s wary of a backlash

Onetime aides to former Treasury Secretary Henry Paulson (left) are spearheading the public relations effort. Onetime aides to former Treasury Secretary Henry Paulson (left) are spearheading the public relations effort.
By Robert Schmidt
Bloomberg News / June 26, 2009
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NEW YORK - Wall Street’s largest trade group has started a campaign to counter the “populist’’ backlash against bankers, enlisting two people who were aides to Henry M. Paulson Jr. when he was Treasury secretary to spearhead the effort.

In memos about confidential meetings with top financial executives, the Securities Industry and Financial Markets Association said that this month it began the “execution phase’’ of the operation, which pledges to embrace change and accountability. The plan targets policy makers and the news media in New York, London, Washington, and Brussels and calls for a “city-by-city, grass roots’’ approach.

The securities industry “must be perceived as part of the solution, which will allow it to better defend against populist overreaction,’’ said the documents, prepared for a June 17 meeting of the association’s board.

The meeting minutes and staff-written papers, obtained by Bloomberg News, outline the program crafted by polling, lobbying, and public relations companies paid at least $85,000 a month. The memos provide a glimpse, in often candid language, into how Wall Street is grappling with its pariah status.

“It is imperative that in this historic period of reform, the industry be recognized as playing a positive role in seeking change and providing solutions to the problems we face,’’ one document said. “There is currently widespread skepticism about the industry’s commitment to this needed change.’’

The internal papers call for using regional securities firms, many of which have escaped notoriety in the financial crisis, to push the industry’s message with their local members of Congress. The plan notes brokers across the country can also be used.

“The foot power of the private client group has proven to be effective in blunting populist messages in the past,’’ said board member Paul Purcell, chief executive of the investment firm Robert W. Baird & Co., according to minutes of a meeting.

To advise on the strategy, the trade group turned to a bipartisan roster of consultants. Such advice does not come cheap, and the association is discussing dipping into its reserves to cover some of the costs, according to one memo.

Michele Davis, Paulson’s former spokeswoman, and Jim Wilkinson, his former chief of staff, are among those leading the effort. Their firm, Brunswick Group LLC, is being paid a monthly retainer of $70,000, the documents show.

Davis and Wilkinson declined to comment. Assisting them is a Democratic polling firm, Brilliant Corners Research and Strategies, for $5,000 a month. It is run by Cornell Belcher, who worked on President Obama’s campaign. BKSH & Associates Worldwide, a firm chaired by Republican strategist Charlie Black, signed on for $10,000.

In response to questions about the push for an image makeover, the association’s president, Timothy Ryan, said it has taken a lead in advocating for a federal systemic risk regulator and has pushed for increased government power to wind down financial firms that do not own banks. He also touted the group’s recently issued recommendations on executive compensation.

“This effort, which is not uncommon for a trade association, is designed to ensure our ideas for improved accountability, oversight, and transparency are heard by the widest possible audience,’’ Ryan said.

The Securities Industry and Financial Markets Association represents about 600 securities firms, brokerages, and asset-management companies. It counts among its members the biggest US banks.