Richard W. Painter

Former Chief Ethics Lawyer, President George W. Bush
Professor of Corporate Law, University of Minnesota Law School

Ethics, conflicts of interest, and the Presidency.

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Biography

Richard W. Painter served as the chief ethics lawyer for President George W. Bush and has published op-eds on government ethics for a number of first-tier national publications. He is a nationally-recognised authority on corporate, government, and lawyer ethics and ethics law, who brings a conservative perspective on meaningful reform in both business and government. He is an expert on the Sarbanes-Oxley Act, a key provision of which is based on his work. He is the author of books on banking reform, governmental ethics reform, and most recently, the first book on campaign finance reform by a conservative. Richard Painter is the S. Walter Richey Professor of Corporate Law at the University of Minnesota Law School.

Campaign finance. Richard Painter’s 2016 book Taxation Only With Representation: The Conservative Conscience and Campaign Finance Reform (coauthor John Pudner) is the first comprehensive discussion of corruption in campaign finance by a political conservative. Painter explains how our money-driven campaign system undermines essential conservative principles, which all boil down to the fundamental vision of the founders of the Republic, a government chosen by the people — that is, not by moneyed interests. His solution: defining government’s right to tax in a way that gives citizens a voice in campaign funding by dedicating the first $200 of your federal taxes to the candidate of your choice.

Bank reform. With coauthor Claire Hill, Richard Painter published Better Bankers, Better Banks: Promoting Good Business through Contractual Commitment in 2015. Better Bankers analyzes the recent history of irresponsible risk-taking by bankers to reveal its cause — lack of personal liability due to the shift in the 1980s from partner to shareholder ownership. Seeking to recall banking to its former noble role in society, Painter proposes a game-changing reform: making the risk personal by making bankers themselves liable for a portion of the debts, fines, and settlements that result from their own misbehaviour.

Government reform. In his 2009 book Getting the Government America Deserves: How Ethics Reform Can Make a Difference, Painter offers substantive suggestions for addressing systemic corruption in government. We’re not talking about individuals taking bribes, but the way aspects of our political system fail to prevent the corruption and distortion of democracy. From his deep practical experience as an ethics lawyer in the White House, he proposes stronger enforcement of existing ethics rules and reforming the lobbying industry and campaign finance.

Credentials. Richard Painter was Associate Counsel to the President in the White House Counsel’s office, serving as chief ethics lawyer for President George W. Bush, and for White House employees and senior nominees to Senate-confirmed positions in the Executive Branch. He clerked for John T. Noonan, Jr. of the US Court of Appeals for the Ninth Circuit. He has four times provided invited testimony before committees of Congress on securities litigation and/or the role of attorneys in corporate governance. He has given dozens of lectures on Sarbanes-Oxley in various venues. He is the author of two casebooks, on securities litigation and lawyer responsibility. His credentials also include the following:

  • Associate Counsel to the President, 2005 to 2007.
  • Clerk, John T. Noonan Jr., US Court of Appeals, Ninth Circuit.
  • Fellow at Harvard University’s Safra Center for Ethics, 2014–2015.
  • Practiced law at Sullivan & Cromwell, NYC, and Finn Dixon & Herling, Stamford, CT.
  • Former tenured law professor, University of Oregon School of Law and Guy Raymond and Mildred Van Voorhis Jones Professor of Law, University of Illinois College of Law.
  • BA summa cum laude in history, Harvard University.
  • J.D., Yale University; editor of the Yale Journal on Regulation.

Books

Taxation Only With Representation

Richard W. Painter

This book is the first comprehensive discussion of corruption in campaign finance from the viewpoint of a political conservative. In this book, Richard Painter discusses how our money driven campaign system undermines the vision of our Founding Fathers and just about every principle that conservatives believe in. Painter then lays out a plan for reform that conservatives, and the Supreme Court, will embrace: defining the government's right to tax its citizens in a way that will give each citizen a real voice in funding campaigns for elected officials.

Take Back Our Republic (2016)

Better Bankers, Better Banks

Promoting Good Business through Contractual Commitment

Claire Hill and Richard Painter

Taking financial risks is an essential part of what banks do, but there's no clear sense of what constitutes responsible risk. Taking legal risks seems to have become part of what banks do as well. Since the financial crisis, Congress has passed copious amounts of legislation aimed at curbing banks' risky behavior. Lawsuits against large banks have cost them billions. Yet bad behavior continues to plague the industry. Why isn't there more change? In Better Bankers, Better Banks, Claire A. Hill and Richard W. Painter look back at the history of banking and show how the current culture of bad behavior-dramatized by the corrupt, cocaine-snorting bankers of The Wolf of Wall Street-came to be. In the early 1980s, banks went from partnerships whose partners had personal liability to corporations whose managers had no such liability and could take risks with other people's money. A major reason bankers remain resistant to change, Hill and Painter argue, is that while banks have been faced with large fines, penalties, and legal fees-which have exceeded one hundred billion dollars since the onset of the crisis-the banks (which really means the banks'shareholders) have paid them, not the bankers themselves. The problem also extends well beyond the pursuit of profit to the issue of how success is defined within the banking industry, where highly paid bankers clamor for status and clients may regard as inevitable bankers who prioritize their own self-interest. While many solutions have been proposed, Hill and Painter show that a successful transformation of banker behavior must begin with the bankers themselves. Bankers must be personally liable from their own assets for some portion of the bank's losses from excessive risk-taking and illegal behavior. This would instill a culture that discourages such behavior and in turn influence the sorts of behavior society celebrates or condemns. Despite many sensible proposals seeking to reign in excessive risk-taking, the continuing trajectory of scandals suggests that we're far from ready to avert the next crisis. Better Bankers, Better Banks is a refreshing call for bankers to return to the idea that theirs is a noble profession.

University of Chicago Press (27 Oct. 2015)

Review

Fining Bankers, Not Shareholders, from Banks' MisconductThe New York Times

Praise

"A thoughtful, modern exploration of a pernicious problem: excessive risk-taking in banking. "Better Bankers, Better Banks" offers an original and path-breaking perspective to the problem, including a brave remedy to reestablish professionalism and personal liability."
— Steven Davidoff Solomon, University of California, Berkeley

"Hill and Painter have the historical sensibility, financial and legal competence, and literary skill to elaborate the most important, unanswered question facing contemporary banking: How best to curb the individual and institutional corruption that has emerged over the past decade? Their answer, carefully laid out with all its merits and potential criticisms, is rooted in the sensible notion that 'responsible' banking can be best served when senior bankers are held personally liable for a portion of their banks' debts, fines, and settlements. This is not as easy a remedy as it might seem, and the authors take the reader through all the fascinating details of this seemingly intuitive proposal. This is a provocative book. It will interest the general public, Congress, and concerned regulators, as well as many bank executives who are currently at work redefining what responsible banking means for their organizations and trying to induce constructive changes in corporate culture."
— Malcolm S. Salter, Harvard Business School

A thoughtful, modern exploration of a pernicious problem: excessive risk-taking in banking. "Better Bankers, Better Banks" offers an original and path-breaking perspective to the problem, including a brave remedy to reestablish professionalism and personal liability.
— Steven Davidoff Solomon, University of California, Berkeley

Hill and Painter have the historical sensibility, financial and legal competence, and literary skill to elaborate the most important, unanswered question facing contemporary banking: How best to curb the individual and institutional corruption that has emerged over the past decade? Their answer, carefully laid out with all its merits and potential criticisms, is rooted in the sensible notion that responsible banking can be best served when senior bankers are held personally liable for a portion of their banks debts, fines, and settlements. This is not as easy a remedy as it might seem, and the authors take the reader through all the fascinating details of this seemingly intuitive proposal. This is a provocative book. It will interest the general public, Congress, and concerned regulators, as well as many bank executives who are currently at work redefining what responsible banking means for their organizations and trying to induce constructive changes in corporate culture.
— Malcolm S. Salter, author of Innovation Corrupted: The Origins and Legacy of Enron s Collapse

Why have bankers so often behaved so badly? Two eminent legal scholars lead us on a grand tour of recent financial catastrophes to demonstrate how a shift in legal structure from partnership to corporate form transformed staid banking institutions into unscrupulous gambling houses. The cultural shift occurred once bankers realized how to impose downside risk on shareholders while still retaining upside gains through lavish compensation packages. Fortunately, the authors diagnosis comes with a cure personal liability. Instead of allowing bankers to hide behind entity shields, the authors prescribe 'covenant banking, ' a form of contractually imposed personal liability, as a means of aligning banker behavior with socially optimal risk-taking. This is a compelling policy proposal, cogently presented.
— Sean Griffith, coauthor of Ensuring Corporate Misconduct: How Liability Insurance Undermines Shareholder Litigation

Hill and Painter have thrown down the gauntlet, challenging the leaders who run modern banks to embrace a new approach they call covenant banking. They argue, with abundant passion and compelling evidence, that current modes of banking regulation and litigation have failed, and that the financial markets require that bankers undertake substantial and new forms of cultural responsibility. Their book aspires to place those who work on Wall Street in a new role in society, that of the true professional instead of the scoundrel. Both authors are well-equipped experts and their arguments are among the most provocative to emerge from the aftermath of the global financial crisis.
— Frank Partnoy, author of Wait: The Art and Science of Delay

"Better Bankers, Better Banks" is a game-changer for the financial regulatory reform. Its proposal for covenant banking is a serious formula for restoring trust in the financial services industry by requiring bankers to have skin in the game. Hill and Painter have figured out how to recreate the reputational benefits of general partnerships in an age of giant incorporated banks. This book should be required reading for anyone concerned with restoring a fair and stable banking system.
— Adam J. Levitin, Georgetown University Law Center

The change in the financial community over the past few decades has been dramatic. The economic crisis brought the activities of investment bankers into the limelight, and suddenly it seemed the staid buttoned-up banker types of the popular imagination had been transformed into wild speculators risking billions on a single trade. What happened? According to Hill and Painter," "the reason is that the billions they re risking on a single trade aren t their ownbut somebody else s. Hill andPainter want to do something about itby requiring that financial operators have their own assets at stake.
— Glenn Reynolds USA Today

Exceptionally well-written. . . . Hill and Painter do a great job of telling an impressively comprehensive story of how, in the course of the last few decades, investment bankers gradually abandoned their professional ethos in favor of purely self-serving pursuit of personal profit that is at the core of today s culture of irresponsible banking. . . . What makes the book an even more worthwhile read, however, is the authors proposed solution. . . . I hope Wall Street CEOs read this book and soon!
— Saule T. Omarova, Cornell Law School Jotwell

Hill and Painter have a proposal for fixing America s banking system: encourage banks to adopt covenant banking, a term they coined for a set of practices that would put the personal wealth and compensation of bankers at stake if something goes wrong.
— Sarah Smith National Journal

Getting the Government America Deserves

How Ethics Reform Can Make a Difference

Richard W. Painter

In order to be effective, federal ethics law must address sources of systematic corruption rather than simply address motives that individual government employees might have to betray the public trust (such as personal financial holdings or family relationships). Getting the Government America Deserves articulates a general approach to combating systemic corruption as well as some specific proposals for doing so. Federal ethics law is relatively unknown in legal academia and elsewhere outside of Washington, D.C., but it is binding on over one million federal employees. Lobbyists, federal contractors, lawyers and others who interact with the federal government are also deeply interested in federal ethics law and represent a surprisingly large market for a little-studied area of the law.

Getting the Government America Deserves analyzes government ethics law from the perspective of an academic critic and that of a lawyer who was the chief White House ethics lawyer for two and a half years. Richard Painter argues that the existing ethics regime is in need of substantial reform since federal ethics laws fail to curtail conduct that undermines the integrity of government, such as political activity by federal employees and their interaction with lobbyists and interest groups. He also contends that in some other areas, such as personal financial conflicts of interest, there is too much complexity in regulatory and reporting requirements, and rules need to be simplified. Painter's solution includes strengthening the enforcement of ethics rules, reforming the lobbying industry, and changing a system of campaign finance that impedes meaningful government ethics reform.

Oxford University Press; 1 edition (24 Feb. 2009)

Praise

"Government ethics is an area of the law that is not written about by legal academics and lawyers as much as it should be; it influences everything from how billions of dollars of taxpayer money are spent, to who gets top political appointments and whether this country is at war or at peace. Richard Painter offers concrete ideas for distancing government officials from lobbyists, campaign fundraisers, trade associations and other special interests that can easily drown out the voices of ordinary Americans. His experience includes being the chief White House ethics officer during one of the most challenging times in our recent history. His book has an intriguing set of proposals to address issues that are critical for our country's future. He addresses root causes of corruption in today's government while recognizing that many people in public life want to serve the public rather than special interests."
— Walter Mondale, 42nd Vice President of the United States

"Getting the Government America Deserves offers a comprehensive analysis and overview of ethics in government in early twenty-first century America. Melding practical experience at the highest levels and the knowledge and perspective gained from years of researching and teaching in the area, Painter provides a thoughtful perspective on crucial questions of accountability, transparency, and integrity in government. This is an original and important contribution that should be of interest to policymakers, attorneys, scholars, teachers, and anyone else who is concerned with how society should regulate the conduct of high-level government officials."
— Geoffrey P. Miller, New York University School of Law

"Everyone is in favor of ethics, and particularly ethics in government. But once we move from the abstract to the concrete, agreement fades. Professor Richard Painter is in a unique position to contribute to the debate. He is a law professor, the author of several articles, and a book on legal ethics. He was instrumental in persuading Congress to require any lawyer who represents a corporation to report known fraud up the ladder to senior management, and if that does not work, to the client's board of directors. And, he was former ethics counsel for President George W. Bush. His new book, Getting the Government America Deserves, gives us an inside look at how President Bush dealt with issues of government ethics and what President Obama can learn from that experience. This is the book that every well-informed citizen should read. Professor Painter offers substantial concrete proposals to clean up corruption in Washington."
— Ronald D. Rotunda, Chapman University School of Law

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On Taxation and Campaign Finance Reform