WASHINGTON — Sen. Olympia Snowe, R-Maine, was outspoken in her opposition to President Obama’s nominee to lead a new consumer protection bureau — until, she says, she realized that a “no” vote represented a conflict of interest.
On Thursday, Snowe voted “present” as nearly all other Republicans, including Sen. Susan Collins of Maine, voted against the nomination of former Ohio Attorney General Richard Cordray to be director of the Consumer Financial Protection Bureau.
Snowe’s husband, former Maine Gov. John McKernan, is chairman of Pittsburgh-based Education Management, a for-profit company that has more than 100 schools in 32 states, none of them in Maine.
With a director, the consumer bureau would be able to more strictly regulate private student loan companies. Education Management gets significant revenues from such loans.
When asked why she didn’t realize earlier that there was a conflict, Snowe said it wasn’t until Thursday’s Senate floor debate that she learned that a vote against Cordray could be interpreted as a vote against tougher regulation of her husband’s company.
Cordray’s nomination was blocked when it fell seven votes short of the 60 needed to overcome a procedural hurdle. Only Republican Sen. Scott Brown of Massachusetts voted with Democrats.
Snowe was vehement in her opposition to Cordray’s nomination as recently as Wednesday night and said she still agrees with the GOP position that no director should be confirmed until the bureau’s structure is changed. She voted for the legislation that created the bureau.
Snowe said she learned Thursday that the Senate floor debate included charges that, without a director, the new agency would be unable to use all of its powers over a number of financial institutions, including private student loan companies.
“This new agency will affect thousands of industries, one of which my husband happens to be associated with, which involves student loans,” Snowe said in a prepared statement. “As such, I do not feel it is appropriate to vote on this nomination given the debate on the Senate floor raising questions about the CFPB’s role in regulating those industries.”
Ben Grant, the Maine Democratic Party’s chairman, said he doesn’t accept Snowe’s explanation.
“The clearest way to clean up any conflict here would be for her to vote ‘yes,’ because the only conflict would be if she votes ‘no’ to relax the rules over any entities that her family has a financial interest in,” Grant said.
Snowe has abstained from voting on past issues affecting Education Management, but she didn’t mention that as an issue in the Cordray nomination until Thursday.
Snowe and Collins were among just three Republicans who voted for last year’s financial regulatory overhaul bill, broad legislation that included creation of the bureau.
But they joined 42 other Republican senators in signing a letter earlier this year saying they would block any nominee to direct the bureau until the White House agrees to changes in the bureau’s structure, such as giving Congress more power over its budget.
Snowe’s staff said she was not available Thursday evening to elaborate on how she decided just hours before the vote that she had a conflict.
Snowe’s spokesman Brandon Bouchard said it was brought to Snowe’s attention Thursday that Democrats were saying on the Senate floor that failure to confirm a director would keep the bureau from exercising its full authority over financial institutions including private student loan companies.
“It had come to our attention, upon review by staff (Thursday) morning, that there were correlations being made on the Senate floor that failing to confirm a CFPB director would preclude the implementation of stricter regulations,” Bouchard said. “Therefore, she concluded she should vote ‘present’ as we didn’t want even the perception that a vote in opposition to moving forward with the nominee was in any way linked to her husband’s position.”
MaineToday Media Washington Bureau Chief Jonathan Riskind can be contacted at 791-6280 or at: