Brian Beutler has a disturbing article about House conferees working inside the conference committee on behalf of the New Democrats and the New York delegation to kill or weaken key provisions of the Wall Street reform bill.

Because of the conference committee’s complex rules, the Wall Street friendly House members negotiating the final bill have little power to alter the rules on derivatives, which already appear in the base bill. Of greater concern to reformers on the Hill and in advocacy groups is their position on the Volcker rule, named after former Fed chair, and Obama adviser Paul Volcker, and authored by Sens. Carl Levin (D-MI) and Jeff Merkley (D-OR). That provision isn’t in the base bill yet, and that gives the House Dems greater latitude to meddle with it before it’s offered as an amendment.

Two sources identified four House members on the conference committee–Reps. Dennis Moore (D-KS), Gregory Meeks (D-NY), Mel Watt (D-NC), and Luis Gutierrez (D-IL)*–who have privately pushed to write a loophole into the Volcker rule which would allow banks to invest in hedge and private equity funds. That loophole has the strong backing of Bank of New York Mellon, and State Street Bank and Trust among other firms, but is fiercely opposed by Volcker himself, who has had tremendous influence over the shape of the reform bill up to now. Volcker was supposed to meet with the Democrats yesterday to warn them away from supporting this loophole, but the meeting was canceled at the last minute.

There’s an asterisk next to Gutierrez’ name because his office denied his participation, saying “He hasn’t been working on the Volcker rule.” I actually believe that; Gutierrez has been more heavily invested in pre-funding. But the rest make sense; Moore is a Blue Dog/New Democrat, Meeks is part of the New York delegation, and Watt was last seen under investigation by the Office of Congressional Ethics for holding fundraisers within days of the financial reform vote in the House.

One of the banks leading the charge on this, Mike Konczal explains, is State Street Bank, the poster child for why we need a stronger Volcker rule:

Hey look, it’s noted TARP-recipient State Street Bank lobbying and teaming up with Democrats! Remember the Cambridge Winter analysis, released this week, of the complete 2008-2009 failure of State Street and the subsequent taxpayer bailout? If you are interested in reform and the lobbying process read it again (here’s my discussion of it).

State Street runs the custodian business of 19 trillion dollars in assets. This is the business of physical and electronic safekeeping and record-keeping of equity, fixed-income, and money market securities for institutional investors. It’s really low margin, high volume, and boring. Essential, but boring. If one of these firms had a major guns-blazing-into-failure collapse like Lehman did, it would destroy a large part of the world economy. Hence the reason we bailed it out when its shadow banking division collapsed in 2008-2009 [...] And there State Street goes, lobbying away to make sure it can continue to do the very things that required taxpayers to bail it out the first time around.

On a separate front, the White House apparently stepped in to gut corporate governance provisions, and then lied about it to Ryan Grim and Shahein Nasiripour.

The White House is intervening at the last minute to come to the defense of multinational corporations in the unfolding conference committee negotiations over Wall Street reform.

A measure that had been generally agreed to by both the House and Senate, which would have affirmed the SEC’s authority to allow investors to have proxy access to the corporate decision-making process, was stripped by the Senate in conference committee votes on Wednesday and Thursday. Five sources with knowledge of the situation said the White House pushed for the measure to be stripped at the behest of the Business Roundtable. The sources — congressional aides as well as outside advocates — requested anonymity for fear of White House reprisal. A White House spokesperson did not respond to a request for comment.

They responded to comment later that the White House “has not taken a position explicitly” on the issue, which is demonstrably false. Basically, this protects Wall Street CEOs from having their salaries determined by shareholders.

By the way, the ballyhooed “transparency” of the conference committee ran into the lack of C-SPAN channels. They’re not televising the committee right now, opting for the BP hearing (a good call, by the way). Cate Long is the only one I know of live-tweeting from inside the room. I will update when I have more information.