DINALLO GOES TO WASHINGTON

Below is another Press Release coming out of the Dinallo For Attorney General campaign. Lets hope Eric has an impact on the financial reforms coming out of DC.

If he had resisted, Congress would have probably subpoenaed him. But Eric Dinallo is headed to Washington willingly on Thursday to urge the federal government to follow the model he oversaw while running the Insurance Department as it finalizes the financial regulations overhaul legislation that took a giant step toward passage in a deal struck late last week.

The appearance in front of the Financial Inquiry Commission will take him off the campaign trail for the day and has already consumed hours of an official pre-interview and other preparation. Nonetheless, Dinallo said that he sees the testimony not only as an obligation, but a chance to refocus attention on a main pillar of the argument he is making in the attorney general’s race: he is most familiar with financial regulations that exist, and best equipped to deal with those that will soon be added with this new bill.

“It’s important that a candidate for attorney general be able to speak and understand this topic because the next attorney general is going to have to be fairly intimate and aware and knowledgeable of this new reform,” Dinallo said. “Whoever the next AG is, he or she will have to interpret it, be able to backstop it, make sure the transparency is there.”

Dinallo’s testimony will essentially serve as advice to regulators looking for how to best ensure compliance with existing and new regulations. He will argue that federal regulators should look to what he and others did on the state level as a model. On his watch as insurance superintendent, Dinallo said, the laws were enforced to lead to what he called “bars of gold in the mud of AIG that will pay off the taxpayers for the investment banking arm, that was federally mandated, that ran the company into bankruptcy.”

Also on the list of expert witnesses for Thursday’s hearing: Stephen Bensinger, the former CFO of AIG, Elias Habayeb, the former CFO of the financial services division of AIG, and from Goldman Sachs, managing director David Lehman and CFO David Viniar.

Sitting alongside the other members of this group, Dinallo will argue that credit default swaps and derivatives should have been dealt with in a more primary way within the new financial reforms to make them more effective.

Without doing that, Dinallo said, he feared that all the moves toward changing the system could be undercut.

“These are all exceptions that may one day swallow the rule,” he said.

Between health care reform and financial services reform, Dinallo said, the next New York attorney general’s term will be complicated by Washington. There will be prosecuting the cases shaped by the new legislative framework, but Dinallo said he also expects the job to include working with the governor and Legislature to think through how far beyond the federal mandates New York should go. Already, for example, state law lets children stay on their parents’ health insurance until age 29, while the law signed by President Obama this spring will only let them stay on until age 26.

“We’re going to have to decide how much in sync New York should be with the federal program,” Dinallo said.