WASHINGTON — Nearly two years after the American financial system teetered on the verge of collapse, congressional negotiators reached agreement early Friday morning to reconcile competing versions of the biggest overhaul of financial regulations since the Great Depression.
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A 20-hour marathon by members of a House-Senate conference committee to complete work on toughened financial regulations culminated at 5:39 a.m. Friday in agreements on the two most contentious portions of the financial regulatory overhaul and a host of other provisions. On a party-line vote, the House conferees voted 20-11 to approve the bill; the Senate conferees voted 7-5 to approve.

Members of the conference committee approved proposals to restrict trading by banks for their own benefit and requiring banks and their parent companies to segregate much of their derivatives activities into a separately capitalized subsidiary.

The agreements were reached after hours of negotiations, most of it behind closed doors and outside the public forum of the conference committee discussions. The approvals cleared the way for both houses of Congress to vote on the full financial regulatory bill next week.

The bill has been the subject of furious and expensive lobbying efforts by businesses and financial trade groups in recent months. While those efforts produced some specific exceptions to new regulations, by and large the bill’s financial regulations not only remained strong but in some cases gained strength as public outrage grew at the excesses that fueled the financial meltdown of 2008.

Legislators had aimed to finish their reconciliation work before President Obama travels to a G-20 meeting this weekend in Ontario, and to approve and deliver a final bill for the president’s signature by Independence Day.

At two minutes before midnight Thursday, some 14 and a half hours after they began work Thursday morning, members of the House-Senate conference committee approved a final revision of the measure known popularly as the Volcker Rule.

The rule, named for Paul Volcker, the former Federal Reserve chairman who proposed the measure earlier this year, restricts the ability of banks whose deposits are federally insured from trading for their own benefit. That measure had been fiercely opposed by banks and large Wall Street firms, who viewed it as a major incursion on some of their most profitable activities.

“One goal of these limits is to reduce participation in high-risk activity that can cause significant losses at institutions which are central to the financial system,” Senator Christopher Dodd, the Connecticut Democrat who shepherded the financial bill through the Senate, said. “A second goal is to end the use of low-cost funds — to which insured depositories have access — to subsidize high-risk activity.”

Banks managed to wrangle limited exceptions to the rule that would allow them to continue some investing and trading activity. The agreement limits banks’ investments in hedge funds or private equity funds to no more than 3 percent of a fund’s capital; those investments could also total no more than 3 percent of a bank’s tangible equity.
Many Wall Street firms, including Goldman Sachs, Morgan Stanley and others, have long engaged in significant amounts of trading for their own accounts, a practice that commercial banks and their parent companies were traditionally less inclined to adopt.

The Wall Street institutions might not have been subject to the new rules except for their decisions during the 2008 financial crisis to convert themselves into bank holding companies in order to gain access to the emergency lending authority of the Federal Reserve.

LONDON — Elizabeth Windsor decided to take in some tennis at Wimbledon yesterday. Although tickets are scarcer than elephants cavorting at Piccadilly Circus, she managed to cop a couple, and in the front row of Centre Court, no less.

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When she walked in, people began to cheer and clap and point cameras at her. She looked a sprightly, likable 84, and she is used to this kind of attention because in her day job, she is Queen Elizabeth II.

Her Majesty last had an urge to see tennis at Wimbledon in 1977, 33 years ago. Her father, King George VI-to-be, actually played Wimbledon. It was doubles in 1926, an embarrassing hackerly performance prompting his wife to veto any repeats.

As far as tennis goes these days, Her Majesty’s domain is down to one body. It belongs to a prickly Scotsman, Andy Murray. Last year, the queen sent Murray a good-luck note, and yesterday wished him well in person in a chat that followed his batting-practice victory over Jarkko Nieminen, 6-3, 6-4, 6-2.

Three sets were enough for the queen, who departed beneath a robin’s-egg blue bonnet that looked more comfortable than a crown. Alas, her handlers blew it. They should have escorted her to the back court, where the Impossible Match was still outrageously in progress, in its third day, with an overflow crowd delighted to be in on a tennis classic.

Linked forever as partners in tennis crime or tennis glory — take your pick — are Long John Isner, once an All-American at the University of Georgia, and quick Nic Mahut, with a French background. Foes for three days, and now lifetime friends, they collaborated in an expanding dream that amazed the sporting world and looked endless.

“I honestly thought it was a dream,’’ said the towering Isner, whose zipping two-fisted backhand punctured the revelry of 11 hours 5 minutes that began Tuesday. “I was expecting to wake up, in all seriousness. I didn’t think that type of match was possible.’’

It wasn’t — a match of 183 games beyond any imagination — but was. Game after game after game, it finally came out like this for Isner: 6-4, 3-6, 6-7 (7-9), 7-6 (7-3), 70-68.

Yes, 70-68 — an unheard-of score in tennis. Never happened; never will. But it did on Court 18. Two serving heavies got caught up in it, blasting each other like prizefighters, and couldn’t get out. It was too absorbing for them and the witnesses, a once-in-forever trip through 183 games, 20 of them on the last day after darkness had stalled the fateful fifth at 59-59 Wednesday.

Absurd. Who could have conjured it?

“You can’t imagine going to 20-all,’’ Isner said.

You couldn’t have broken serve with a sledgehammer. Each guy lost serve only once until the conclusion, ending a stretch of 168 holds.

“I lost track of the score,’’ said Isner. “Just tried to hold serve. One break would mean the match.’’

It was abrupt: a Mahut error, good low returns, and the backhand passer. Suddenly it was over, and they had their niche in sporting history.

Aces flew like hailstones: 112 for Isner, 103 for Mahut. Every time they struck one, it added to the all-time record.

They said they were delirious as the score ascended — and so were the observers.
Ever aware of history, the Wimbledon folks immediately presented the protagonists and the umpire with gifts and took photos of them with the scoreboard, honoring their unbelievable feat.

While it was pleasant to see the queen, it’s too bad she missed Isner and Mahut tearing apart all the records while creating a match for the ages.

Even though the U.S. Supreme Court has upheld Washington's law that says ballot-measure petitions are public records, the drawn-out battle over whether to release Referendum 71 petition signatures is not over.

The high court ruled Thursday in an 8-1 decision, with Justice Clarence Thomas dissenting, that disclosing the identities of petition-signers does not, generally, violate the First Amendment.

But the justices also said their decision "does not foreclose success" should Ref. 71 sponsors decide to pursue an exemption in a lower court — which the sponsors said they will do.

Those who want to keep Ref. 71 signers' names confidential now will have to prove in U.S. District Court that there is "reasonable probability" that disclosing the names will lead to threats, harassment and reprisals.

That's "a high standard to meet, and they just don't have the evidence to meet it," contended Washington Attorney General Rob McKenna, who argued the case on behalf of the state in April.

Ref. 71, sponsored by Protect Marriage Washington, unsuccessfully sought to repeal a 2009 state law granting expanded, marriagelike benefits for gay and lesbian couples registered as domestic partners.

McKenna called Thursday "a good day for transparency and accountability in elections," saying that "citizen legislating is too important to be conducted in secret."

But James Bopp Jr., the lead attorney for Protect Marriage Washington, said "supporters of traditional marriage have been subject to death threats, vandalism, and even the loss of their jobs" in Washington, California and elsewhere. "We are confident that the District Court will agree that these tactics have no place in the discussion of marriage and will prevent the release of the personal information."

What the justices said

The Supreme Court ruling in the Doe v. Reed case comes after nearly a year of legal wrangling over Ref. 71.

In the months leading up to the November elections, when voters opted to keep the expanded benefits law, a gay-rights advocate said he would request — as permitted under the state's Public Records Act — the names of those who signed petitions to get the referendum on the ballot. He said he would post the information on a searchable website.

Protect Marriage Washington filed suit to keep the names private, saying disclosure would scare supporters away from exercising their free-speech rights.

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The question that worked its way up to the Supreme Court was focused only on the broader issue of whether it's constitutional to disclose the identities of signers of all ballot-measure petitions, not just Ref. 71.

It left unanswered the narrower question of whether it's constitutional to release the names in the case of Ref. 71 specifically, given that sponsors fear disclosure may lead to harassment. That question is what will come before a U.S. District Court.

The justices' opinions Thursday offers the sponsors some hope that they could prevail in lower court — though not a lot.

Chief Justice John Roberts, writing for the majority, said the state has a strong interest in guarding against election fraud and rooting out invalid signatures on petitions — an interest that defeats the argument that petition disclosure is unconstitutional in all cases.

But he also said "upholding the law against a broad-based challenge does not foreclose a litigant's success in a narrower one."

The court also ruled that signing a ballot petition is political expression and that requiring disclosure of signatures can be subject to First Amendment review.

Most of the justices expressed some doubt about the argument that in the case of Ref. 71, the fear of possible harassment should override the state's disclosure law.

Justice Sonia Sotomayor, in a concurring opinion joined by Justices John Paul Stevens and Ruth Bader Ginsburg, wrote that "even when a referendum involves a particularly controversial subject and some petition signers fear harassment," a state's important interest in protecting the initiative process remains undiminished.

Stevens, in a concurring opinion joined by Justice Stephen Breyer, said: "Any burden on speech that petitioners posit is speculative as well as indirect."

Justice Samuel Alito, though, in his concurring opinion, seemed to find the argument that Ref. 71 signers would be subject to intimidation persuasive, and the state's interest in compelling disclosure inadequate, saying courts "should be generous" in granting exceptions to disclosure in such cases.

Thomas, the sole dissenter, wrote that the Public Records Act, which subjects all referendum and initiative petitions to public disclosure, is unconstitutional because there are less restrictive means to preserve the integrity of elections.

The Seattle Times was among 22 news organizations and media trade associations that filed a brief in the case supporting public disclosure of the petitions.

What's "reasonable probability"?

Stewart Jay, a First Amendment expert at the University of Washington School of Law, said he believes the plaintiffs could be successful in demonstrating that they have a "reasonable probability" of being subjected to harassment.

But Jay also said the high court, as is typical, provided only vague guidance for the lower courts.

Eugene Volokh, a First Amendment expert at the University of California, Los Angeles, said that while the Supreme Court has allowed for case-by-case exemptions to disclosure, "nobody knows exactly how high" the standard for "reasonable probability" is.

"It's very very hard to figure out just what the likelihood of harassment is going to be," he said. "And even if we do figure it out, we don't know for sure what the threshold is for the amount of harassment that would justify an exemption from the disclosure requirement."

Bopp, the attorney for Protect Marriage Washington, says that he can hardly demonstrate that Ref. 71 petition signers have been harassed since their names haven't been released.

But he will argue that there's a reasonable probability of harassment based on what happened in California. There, he says, people whose names were posted online as campaign contributors to Proposition 8, a 2008 ballot issue that banned gay marriage in California, were victims of threats, vandalism or harassment.

Tom Lang with knowthyneighbor.org, a gay-rights group that has posted names on the Internet, said that harassment has not resulted from the posting of identities of those against gay-rights ballot measures in Massachusetts, Florida and Arkansas.

And in Washington state, the names of donors to the Ref. 71 campaign — not petition-signers — have been public for months now. While the Ref. 71 campaign chairman and some top lieutenants have brought forward allegations of threats and harassment, "that's not the standard," Attorney General McKenna said.
"The issue is whether the average petition signer has a legitimate fear of threats, harassment or reprisals," he said. "And there just hasn't been evidence presented to date that that was the case."

In any case, the Ref. 71 names are not immediately available, as the Supreme Court decision is not final for 25 days.

A Thurston County judge also must lift an injunction he issued banning the release of all voter petitions, pending the Supreme Court decision. McKenna said the state would ask the judge to lift the injunction.