The NASD has named President Clinton's top congressional lobbyist to a newly created position of executive vice president of strategic development. The Feb. 17 announcement that John Hilley would join the NASD came only about a month after NASD Chairman Frank Zarb publicly asserted that the NASD had no legislative agenda. Hilley says about 20% of his time will be spent talking to Congress about specific issues, including bills currently before Congress.
It's unclear why Hilley--who has never worked in the securities industry or even in the private sector--would be tapped for a position that the NASD says will work closely with Zarb in directing corporate strategy.
Hilley had been a key power broker in the White House, credited with crafting the deal last year with Congressional Republicans to balance the federal budget. By the end of the year, The Washington Post reported Hilley would either be named the president's chief of staff or would go "out to make money."
Hilley says he started looking for a new position last summer. "I saw the NASD as an incredibly dynamic and forward-looking enterprise, and I met Frank Zarb in pursuing this job," he says. Impressed by Zarb's leadership, he says he wanted to help shape the NASD's direction. Although Hilley says he has known the SEC's Arthur Levitt well while at the White House, Levitt had no part in the NASD job offer.
The Washington Post quoted a Nasdaq source saying that Hilley was offered about $300,000 for the NASD job. Neither Hilley nor an NASD spokesperson would comment on compensation.
Hilley believes the successful strategizing he coordinated as White House director of legislative affairs speaks for itself in qualifying him for his new job. "I'm here to help senior management think through the direction of NASD and Nasdaq for the future, to think broadly of our enterprise," says Hilley. "I'll spend a lot of time thinking of our international business, exploring potential alliances overseas and attracting international issuers." He says he also will work to "make sure NASD Inc.'s near-term goals are met," and will oversee the NASD's government relations and economic research.
"A large part of my governmental relations role is simply to inform Congress about what we're [NASD] up to as part of our day-to-day business," he says. But the financial services reform bill heads Hilley's list of specific issues he'll be talking to Congress about. "We want to make sure we maintain integrity of markets, that they receive adequate oversight from functional regulators, which is the type of regulation we believe in," he says.
Hilley also plans to go before Congress to work out a plan for Nasdaq data to be protected as proprietary information. "What's drawing our interest here is our desire for reciprocity agreements internationally," he says. "Before we can pursue them, we need legislatively to have some kind of protection." Two full-time staff members have been assigned to Hilley's government relations efforts.
Hilley defends the propriety of the NASD taking on a lobbying role. The NASD operates in part as an agent of the SEC, although it has always argued that it is not a state actor. "The main issues we're working on are supported industrywide, not just by us," Hilley says. "We're working on them hand-in-hand with the SEC, completely in sync with their desires."
Hilley began in academics as an economics professor at Princeton University. He then served in Democratic senior staff positions in the U.S. Senate, including Chief Counsel for Senate Democratic Leader Tom Daschle (S.D.), Chief of Staff for former Senate Majority Leader George Mitchell (Maine) and Majority Staff Director for former Senate Budget Committee Chairman Jim Sasser (Tenn.)