A.P.E.X. - Ask. Ponder. Educate. [X].
 
Steve Blumenthal - 40 Years in the Swamp

Steve Blumenthal

November 21, 2019
The Great Hall

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40 Years in the Swamp

Mr. Blumenthal retired from the practice of law in 2018, ending a forty-year career covering the spectrum of Washington, D.C. representations. His service as an industry self-regulator, trade association executive, law firm contract lobbyist, congressional counsel, and head of a federal regulatory agency give him a unique perspective on government and regulatory relations.

His government service included serving as the Acting Director/Deputy Director of the Office of Federal Housing Enterprise Oversight, an independent agency in the Department of Housing and Urban Development. OFHEO was the federal regulator of Fannie Mae and Freddie Mac until Congress replaced it with the Federal Housing Finance Agency. Mr. Blumenthal led “Special Examinations” of accounting irregularities at both companies that produced what are to this day the largest financial restatements in the history of this country.

Earlier in his career Mr. Blumenthal served as a Counsel to the Energy and Commerce Committee of the U.S. House of Representatives, specializing in securities and financial institutions. His responsibilities included oversight of the Securities and Exchange Commission and interacting with federal banking and commodities regulators on legislation and regulation.

In addition to his government service, Mr. Blumenthal spent years in the private sector. Immediately prior to his retirement, he was a principal in the law/lobbying firm of Williams and Jensen. He also served as the Director of Regulatory Relations for the Securities Industry Association, the trade association of securities broker/dealers, i.e. “Wall Street’s lobby.” He first came to Washington to be an attorney in the Office of the General Counsel of the National Association of Securities Dealers, the owner of the Nasdaq System and regulator of the over-the-counter securities industry.



Reflection

 

On Thursday, November 21st, 2019, The 2019 APEX Events closed with politician and Washington veteran, Steve Blumenthal, sharing his experiences and advice with SUU students and community. Blumenthal, who retired from law in 2018, served as Acting Director/Deputy Director of the Office of Federal Housing Enterprise Oversight (OFHEO) and the Counsel to the Energy and Commerce Committee of the U.S. House of Representatives, as well as the Director of Regulatory Relations for the Securities Industry Association. He was introduced to the stage by SUU Assistant Professor of Political Science and Chairman of the Department of Political Science and Criminal Justice, Doug Bennett.

After thanking the university and those involved with his presentation, Blumenthal began his speech by talking about the federal regulatory agencies, or as he referred to them, “the Swamp” and “the Deep State,” along with explaining aspects of the government. He goes on to explain how the founders of the United States didn’t foresee the growth and power that the bureaucracy has today, to the point where it is unknown exactly how many government agencies exist in the country today and the people in these positions, ranging from the House of Representatives, to Supreme Court justices, to the ever-growing number of civilian government employees. 

He also explained how agencies can exist in complex forms, with independent agencies to departments of agencies within other agencies, but that there’s only three that play a huge role in the U.S.; the executive agencies (i.e. the IRS within the Department of the Treasury), the independent agencies (the Securities and Exchange Commission), and agencies that are a “hybrid” of executive and independent agencies (the agency that Blumenthal served under, OFHEO). Blumenthal also went into detail about how regulations are created and passed, the role Congress plays in these regulations, and the Federal Nation Mortgage Association and the Federal Home Loan Mortgage Corporation, known as Fannie Mae and Freddie Mac, respectively. 

Blumenthal concluded his lecture with the importance of regulation and thoughts on the current political state and reformation of the system, saying “Certainly, there will be no system wide regulatory reform at a time when the political debate is how much Socialism is good for the country...The way you correct flaws in the system is not by abandoning the system, but addressing the flaws that have become apparent. You rebuild the wall one brick at a time.”

by Emily Sexton



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