Spotlight on the SEC As financial industry decision-making moves to Washington, government agencies will become more important - and less isolated from scrutiny. The Securities and Exchange Commission has operated in relative obscurity for years, with a few powerful law firms and accounting firms exerting great influence over SEC staff and determinations. Just hiring certain firms, for example, almost guarantees a favorable result. Future newsletters will report on some of the practices and powerful people. If you need quicker information, contact Ken Feltman directly.

As the first of the hordes of bankers began to plop down in Washington in October, they struggled with the alien culture. For example, a week after Neel Kashkari became one of the most important people in town (as Interim Assistant Secretary of the Treasury for Financial Stability, in charge of the $700 billion Troubled Asset Relief Program), three European bankers came to Washington to meet with him. They were sure Kashkari would want to have their opinions on how their American operations were, somehow, different and unique - and deserving of special treatment.

Because a friend in Germany suggested they talk with him, they invited a lobbyist to have a drink with them just before they left to return home. They started off by telling him how large and important their financial institutions are; he knew that already. Adroitly and in turn, each told the lobbyist how important socially and in the financial world one of his traveling companions was; that was when the lobbyist learned that the bankers may never come to understand Washington. Here, a low-level bureaucrat can tie things in knots and no amount of family ties, old school ties, old money or new money can cut the Gordian knot.

No appointment

Eventually, they confessed that they did not get an appointment with Kashkari. One of them knew Treasury Secretary Henry Paulson but despite stressing that fact to Kashkari's assistant, and leaving messages with Paulson's assistant, and despite having the chief executives of two of the largest financial institutions in New York call on their behalf, the bankers could not get an appointment.

Another of the three had attended Yale and talked about people he knew who might know President Bush. Bush would put Kashkari in his place, they were sure. They talked about high priced Washington lobbyists and lawyers who could help them because those lobbyists and lawyers "know everyone." The lobbyist needed to hear no more. He saw the tragedy coming. He suggested that they needed to get to the airport but if they did not object, he would give them the benefit of his experience. He told them that the president does not schedule appointments for department and agency staff. In fact, very few high ranking officials in Washington exert scheduling influence over other officials, even those reporting to them. One of the bankers cleared his throat.

The lobbyist concluded: Often, the people who can help are personal friends or contacts of the government official, not someone above in the official hierarchy. Therefore, a network of friends at all levels is important because being effective in Washington does not depend on access to the top person so much as it requires access to the right person. They seemed grumpy as they got in the car. They said they would return soon.

The next morning, the call came that Kashkari was available that evening. But the bankers decided not to fly back to Washington.

His German friend later told the lobbyist that he had embarrassed the bankers. Still, they wondered if they could retain him. No, he said. He would wait for a client where the personal chemistry and chances of success are better.

The lobbyist never mentioned that he has Kashkari's private mobile number in his mobile phone.

That's how Washington works. This is a business of making friends, not enemies. Going up the chain of command makes enemies below. This is a business in which you must be available on a moment's notice to make a meeting. You have no time to fly in.

Do we understand what is happening?

The financial world - especially the world centered in places like Tokyo, Frankfurt, London, Zurich, Brussels, São Paulo, Beijing, Mumbai, Moscow, Dubai and New York - needs to understand just how much has changed and how much is still left to change. Because Washington's way is alien to their current way of doing business, the world's financial communities will have rough sledding for a time. Eventually, they will adjust to Washington. Other places would accommodate the financial titans but Washington bureaucrats have no incentive to accommodate. The financial communities must accept that fact, not fight it as more than a few are already doing.

When the discussion was about Tokyo or London versus New York, I was not concerned. Wherever the financial hub was, the rest of the world would find it. Time zones would blur into computerized blips and the deals would continue. But Washington as the world's leading center of finance and commerce? That is worrisome.

I know this town and I am worried. As you re-read Dan Quayle's words, you should worry, too.