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K Street Weighs Ramifications of Ban on Former Frank Aide

Paese, who served most recently as deputy staff director to Frank, is a close confidant of the Massachusetts Democrat. He joined Goldman Sachs in April after a short stint as the chief lobbyist for the Securities Industry and Financial Markets Association.

While Goldman Sachs has a lower profile inside the Beltway compared to many of its counterparts, the bank has beefed up its Washington government affairs operation in recent years.

Goldman Sachs spent more than $5 million in federal lobbying in 2008. The bank spent $1.3 million during the first half of 2009.

Still, the bank has remained short-handed in its in-house capabilities on the House side since Marti Thomas, then-Goldman Sachs’ most senior Democratic lobbyist, left for the Duberstein Group in April. Thomas remains as an outside consultant to the bank.

Thomas’ departure followed that of Jud Sommer, Goldman’s longtime head of the Washington office, and Mark Patterson, its co-head of U.S. government relations, leaving in 2008. Sommer went to UnitedHealth Group as its top lobbyist, while Patterson was tapped to serve as chief of staff to Treasury Secretary Timothy Geithner. Ann Costello, former head of its U.S. government relations, also left this spring for Bank of New York Mellon Corp.

Earlier this year, the firm picked up Republican Todd Malan, who was president of a trade association representing foreign companies’ U.S. subsidiaries, and Democrat Ken Connolly, who was at Mintz Levin.

Goldman Sachs also beefed up its Democratic House ties this spring, hiring Steve Elmendorf, a former senior adviser to then-House Democratic Leader Richard Gephardt (Mo.), of Elmendorf Strategies.

Banking lobbyists downplayed the significance of extending the lobbying ban, saying that Paese was hired for strategy and substance.

“They have plenty of resources to carry their message,” said one Democratic lobbyist, noting that Goldman Sachs and its other in-house lobbyists and contract consultants can continue to push the bank’s position before Congress.

“I don’t see it handicapping them at all,” said a financial services lobbyist familiar with Goldman Sachs. “Michael is running the office. While he’s close to Barney, he’s got a very solid staff underneath him.”

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