First Team

Edward Garlich Jr. & team

Stanford

Second Team

Kim Wallace & team, Lehman

Third Team

Thomas Gallagher & team, ISI

Runner-Up

Leslie Alperstein & team, Washington Analysis

    Edward Garlich Jr. leads the 16-member Stanford Group team to its first-ever No. 1 finish. “They can tell you what’s happening on Capitol Hill, at the regulatory agencies, the Pentagon — you name it,” says one enthusiastic client. In December, Garlich and team alerted clients that the Department of Defense would shift billions in procurement funds from the vulnerable Humvee to the Mine-Resistant, Ambush-Protected or MRAP vehicle, benefiting contractors like Armor Holdings (acquired by U.K. military transport manufacturer BAE Systems in August for $4.1 billion); in the first seven months of the year, the military purchased more than 5,000 MRAP vehicles at a cost of $2.5 billion. Also in December the team predicted Medicare would cut payments for asthma drug Xopenex, manufactured by Marlborough, Massachusetts–based pharmaceuticals outfit Sepracor, to equal reimbursement for generic albuterol, which it did in June. “They’re often the first ones to highlight an issue, and they’re not afraid to buck the consensus,” marvels one money manager. Garlich, 63, who earned a BA at Georgetown University’s School of Foreign Service in 1968, worked as a lobbyist on Capitol Hill before co-founding Washington Research Group in 1973, which was acquired by Stanford Group in 2005. Kim Wallace and his three-member Lehman Brothers team step up a notch to claim the No. 2 spot for knowing “what’s useful and worthwhile to the securities industry,” according to one investor. The team is credited with recognizing that industry opposition would derail bipartisan efforts in Congress to impose a 27.5 percent tariff on Chinese imports — known as the “Wal-Mart boomerang” — unless China revalued its currency. The legislation, first introduced in 2004, was finally abandoned in September 2006, when Republican Lindsay Graham of South Carolina and Democrat Charles Schumer of New York, the bill’s sponsors, agreed to allow Treasury Secretary Henry Paulson Jr. time to work on a diplomatic solution to the currency valuation impasse. International Strategy & Investment Group’s three-member team, led by Thomas Gallagher, drops from first to third. Gallagher is hailed as one of Washington’s best “Fed watchers,” accurately interpreting the Federal Reserve Board’s intentions as “dovish” ahead of its August meeting and unlikely to result in an interest rate hike.