THURSDAY, SEPTEMBER 9, 2010
KLMNO
EZ SU THE FED PAGE
The smallest casualties of the financial reform battle An unintended consequence of the regulatory overhaul legislation: A D.C. child-care center will probably have to close
BY LISA REIN
kind of collateral damage. President Obama and Con-
W
gress foughtWall Street for a year to push through a law to reform the country’s banks. But now they’re facing another fight they never expected — steps from the White House — against the tod- dler set and their high-octane parents. The newlawis threatening the
existence of the Small Savers Child Development Center, whichhas operated for24years in the basement of the Office of Thrift Supervision at 1700 G St. NW. The bank watchdog that failed to police the country’s sav- ings and loans is being closed — and its property dissolved. That meansSmall Savers has to go, too. Small Savers parents — who
include White House staffers, World Bankers, lobbyists, lawyers and journalists — have quickly become a lobbying juggernaut to save the small Washington insti- tution underGStreet. “It will be a real tragedy if the
financial crisis and the whole great economic soap opera claimed this day care center, too,” said Leon Wieseltier, literary edi- tor of the New Republic maga- zine, whose 8-year-old son spent “four very happy and rich years” at Small Savers. “It may turn out the only thing working [in the building]wasthedaycarecenter.” Wieseltier said he’s going to
“call my various illustrious friends in the White House” to save the place. Samantha Power and Cass Sunstein, both Obama advisers, have enrolled their tod- dler at Small Savers, too. The home-away-from-home
for 70 children has been a haven for federalandprivate-sector par- ents since 1986, when a group of parents persuaded the thrift reg- ulator’s predecessor to donate the empty basement space. In a city where quality, afford-
able child care is scarce, federal government child-care centers can be premium spots. The federal government runs
16 child-care centers in the Dis- trict and close to 100 more in 31
Parents of Small Savers students are lobbying legislators and federal officials to save the center.Avery Adler, 3, attends Small Savers.
states, serving 8,000 children. Some agencies subsidize slots. At SmallSavers,whereit’s $1,425per month for infants, the tuition is higher than the government’s but cheaper than many private child- care centers. The center also of- fers some subsidies. Like Small Savers, with 60 per-
cent federal parents, other gov- ernment child-care centers give preference to federal employees beforeopeningspots to parents in nonprofits and the private sector.
But, as with many day care cen- ters, long waiting lists are legend- ary. It’s the management, parents
say, that makes Small Savers so beloved. The $1 million-a-year nonprofit is run by a parent board and enjoys free rent and utilities, which holds down tuition costs. Parents, who are required to vol- unteer every year, drop off kids— from the tiniest babies to 5-year- olds—starting at 7:30 a.m. The 22 teachers, trained in the
THE INFLUENCE INDUSTRY Dan Eggen
Egypt pushes back against Senate resolution
and free elections has sparked an aggressiveWashington lobbying campaign by the longtimeU.S. ally, which argues that the measure could harm theMiddle East peace process and its relationship with theUnited States. The resolution, under consideration in the Foreign Relations Committee, outlines continuing allegations of abuse by Egyptian security services. It also condemns PresidentHosni Mubarak for renewing an emergency security lawallowing broad arrest powers and indefinite detention of suspects without charges. “Authorities in Egypt continue
A
to harass, intimidate, arbitrarily detain and engage in violence against peaceful demonstrators, journalists, human rights activists, and bloggers,” the resolution says. It adds that the Obama
administration should “make respect for basic human rights and democratic freedoms a priority” in its relations with Egypt. Egypt, which spent more than
$1.5 million onU.S. lobbying efforts last year, has responded with a quiet but persistent effort to derail the resolution, according to legislative aides familiar with the discussions. The Egyptian Embassy in Washington declined to comment. The debate comes amid fast-
moving events in theMiddle East, including a planned trip by Secretary of StateHillary Rodham Clinton to Egypt next week as part of the administration’s attempt to restart the Israeli-Palestinian peace talks. Egypt is also planning parliamentary elections this fall and a presidential election next year amid persistent reports that Mubarak, 82, is in failing health. The developments have
Senate resolution condemning Egypt’s record on human rights
prompted increasing calls for reform from human rights groups and someU.S. lawmakers. The administration openly criticizedMubarak’s decision this year to extend the emergency security law, which has been renewed repeatedly since 1981. In a meeting withMubarak
last week, President Obama also took the unusual step of specifically referring to the need for “credible and transparent elections in Egypt,” according to an official WhiteHouse summary of the discussion. The Senate resolution, authored by Sen. Russell Feingold (D-Wis.), has garnered particular attention in Cairo because of its prominent list of backers. Co-sponsors include Sens. JohnMcCain (Ariz.), the former GOP presidential nominee; Richard J. Durbin (Ill.), the Democratic majority whip; Jon Kyl (R-Ariz.); and Joseph I. Lieberman (I-Conn.). Egypt is one of the leading recipients ofU.S. foreign aid, receiving about $1.5 billion last year. The country has accelerated its lobbying spending inWashington from $214,000 in 2006 to $1.5 million last year, according to disclosure records filed with the Justice Department. In 2007, the records show,
Egypt enlisted the services of three prominentWashington lobbyists who formed a special partnership called PLM Group: Democratic power broker Tony Podesta; former representative Bob Livingston (R-La.); and former representative Toby Moffett (D-Conn.). The partnership has taken in more than $4 million in fees during that time, according to the Justice records. Moffett, who is listed as the
lead lobbyist, did not respond to a telephone message. “We are aware of the legislation, but we are not releasing anything,” Egyptian Embassy spokeswomanAmyWatkins said
of the Feingold resolution. In a statement earlier this
year, Feingold said that the coming period in Egypt “could be one of transition, possibly one of tumult,” and that theUnited States should take advantage of the opening to push for greater reforms.
“Continuing to provide uncritical support to an authoritarian regime undermines our credibility as champions of political and civil rights and creates tensions, particularly in theMuslim world, which are ripe for exploitation,” Feingold said. “Those tensions, in turn, threaten our own national security.” Even so, the resolution doesn’t
go as far as previous legislation enacting specific punishments for Egypt’s behavior. In 2007, for example, Congress approved legislation to withhold $100 million in annual aid to the country; then-Secretary of State Condoleezza Rice got around the penalty by invoking a waiver. Michele Dunne, a senior
associate at the Carnegie Endowment for International Peace and editor of the Arab Reform Bulletin, said the resolution’s prospects are unclear.
A new generation at Pepsi One ofWashington’s veteran
industry representatives is retiring: Galen J. Reser is stepping down after 19 years handling PepsiCo’s lobbying efforts. “Over the years, Galen became
one of the respected voices on behalf of the food and beverage industry inWashington,D.C.,” said PepsiCo executive Dan Bryant, a former Justice Department official. Reser is being replaced by
Elizabeth Avery, who has been with PepsiCo since 2004 and previously worked for ConAgra Foods and the Grocery Manufacturers Association.
eggend@washpost.com
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PHOTOS BY RICKY CARIOTI/THE WASHINGTON POST
Small Savers Child Development Centermay have to shut down because the Office of Thrift Supervision, which houses the center, will soon be dissolved. Above,teacher Daniel Powell with some students.
Montessori child-development method, get full benefits and va- cations and they stay for years. The director, CarolynMackey, has lasted 17 years. “We’re a small family,” Mackey
said. “Youshould see the kidswho come back when they grow up.” Embedded in Title 3, Section
323, of the 2,300-page financial reform bill the president signed in July is a line designating that the property belonging to the thrift supervision office be dis- solved, as well. “We’ve been eliminated by reg-
ulatory reform,” said William Ru- berry, spokesman for the Office of Thrift Supervision, which sent the child-care center a letter last month. “We told them we’ll con- tinue to support them as long as OTScontinues to exist asanagen- cy.” The agency’s 1,000 employees will be transferred to various fi- nancial agencies that are imple- menting the law. As for whether Congress knew financial regulation would elimi-
ashington’sbattle for reg- ulatory reform wasn’t supposed to have this
nate Small Savers, Ruberry said: “I’dbesurprised ifanybodyonthe Hill was aware of this question. Legislation always has winners
and losers, but they’re usually easy to spot. The consequences for Small Savers were harder to predict. “We’re trying to convey to con- gressmen, ‘Sir, you didn’t intend to close down a day-care center,’ ” saidAdinaReneeAdler,anenergy lobbyist leading the public rela- tions campaign. Her 3-year-old daughter started at Small Savers when Adler worked in the Office of the U.S. Trade Representative. “But that’s the reality of this fi- nancial reform bill.” Though the deadline is 10
months away, Adler said the cen- ter may have to close sooner if families begin pulling out their children and tuition dollars begin to disappear. The parents are targeting e-
mail groups and legislators, in- cluding the lead sponsors of the financial reform bill, Sen. Chris- topher J. Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.), and Sen. Kirsten Gillibrand (D-N.Y.) for her family-friendliness. They’ve appealed to the transi-
tion teams for the financial agen- cies administering the new law. They have talking points and fact sheets. Every lever of power is being pushed. “We’re hitting everyone hard,”
Adler said. “Nicely, of course.” There are limits to how public
the lobbying by some parents can be, sincetheyworkattheagencies that helped write the financial reform law. “He’s not going to comment on
this type of issue,” Office ofMan- agement and Budget spokesman Kenneth Baer said of Sunstein, a constitutional scholar who heads the White House Office of Infor- mation and Regulatory Affairs. Sofar, lobbying effortshavenot
yielded much. “I don’t have anything for you
on that issue right now,” said KevinMukri, a spokesman for the Office of the Comptroller of the Currency, which is absorbing a majority of the thrift agency’s em- ployees, banks and field offices,
and couldmoveinto the building. The fate of Small Savers “is one
issue of hundreds” that need to be settled when one government agency is absorbed by another, Mukri said. “Like many things in government, there’s not a simple answer.”
Complicating the situation is
the fact that the center never had aformallease or contractwiththe Office of Thrift Supervision, just aninformalagreement.Theagen- cy is not funded by the govern- ment, but by assessments on sav- ings and loans, further placing its operations out of the govern- ment’s reach. Just 10 percent of the children have parents who work at the thrift office. Dodd,the Senate bankingcom-
mittee chairman, released a state- ment through his communica- tions office. “Senator Dodd be- lieves it is vital that all American familieshave access to affordable, quality childcare,” said the sena- tor, who has two young children. He “is looking into” whether Small Savers can stay once the thrift agency closes. JohnHarrington, who has sent
three children to Small Savers, said the center is a model of effective government: It pays for itself and operates in surplus space. “It definitely is frustrating to
sit up on Capitol Hill at these hearings and think, ‘This is an interesting law, but it’s not going to impact me,’ ”Harrington, pres- ident of the White House News Photographers Association, said. “Now it’s hitting me.”
reinl@washpost.com
The Federal Worker Giving Back
The federal government’s Combined Federal Campaign officially kicked off Wednesday. B3
Check the Ego The Federal Coach talks with Ambassador Janice L. Jacobs, the State Department’s assistant secretary for consular affairs. B3
A19
Ourapartment homesaren’tthe only things that look good from every angle.
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