Oldspeak: ” More Than 850 Banks, Hedge Funds, Corporations, and Others Deploy 3,000-Plus Lobbyists on Capitol Hill”. Gov’t for the people, by the people. Hmmm. Seems to me our “Corporate Citizens” are a wee bit over-represented.’
From M.B. Pell and Joe Eaton @ The Center for Public Integrity:
Businesses, trade groups and other interests hired more than five lobbyists for each member of Congress to influence financial regulatory reform legislation pending before the Senate, according to a Center for Public Integrity analysis.
More than 850 banks, hedge funds, companies, associations, and other organizations hired 3,000-plus lobbyists to work on the reform bills, according to the Center’s examination of lobbying disclosure data for all of 2009 and the first quarter of 2010. However, public outrage over Wall Street’s role in the 2007-09 financial meltdown blunted industry attempts to win loopholes in the measure now before the U.S. Senate.
Most of the big players in American business lobbying were active as regulatory reform proposals worked their way through Congress. The U.S. Chamber of Commerce deployed 85 lobbyists, including 49 hired from outside lobbying firms. Among financial services groups, the Securities Industry and Financial Market Association employed 54 lobbyists, including 37 from outside firms. The American Bankers Associationdeployed 53 lobbyists, the Business Roundtable 42, and the Mortgage Bankers Association 29, according to Center data.
In the financial services industry, some 175 companies and groups—ranging from Goldman Sachs Group Inc. to CME Group Inc. to the Private Equity Council—hired lobbyists to try to weaken or eliminate reform proposals aimed at banks and the capital markets. A distant second was the energy and utilities sector, with 91 companies and organizations, followed by manufacturing with 66 firms.
The companies and groups that lobbied on financial reform spent a total of $1.3 billion in 2009 and the first quarter of 2010 on their overall lobbying efforts, the data showed. The exact dollar amount they devoted to financial regulation reform remains unclear because lobbyists are not required to itemize how much money in a given contract is spent on a specific issue. But if only 10 percent of that spending was targeted at financial regulation bills, lobbyists would have received $133 million.
In this debate, however, public perception of big U.S. banks as free-wheeling gamblers relying on taxpayer-funded safety nets overwhelmed Wall Street’s lobbying, some experts said. Anger over bailouts, lavish bonus payments to top executives, and the Securities and Exchange Commission’s fraud lawsuit against Goldman galvanized public opinion against Wall Street.
“Political backlash overwhelmed lobbying,” said Arthur Wilmarth Jr., a banking law expert at George Washington University.
“When you see the tsunami of money flowing into Capitol Hill from these big financial players and their customers, it’s hard to imagine that the broader public interest will be taken into account,” Wilmarth said. “Earlier this year, there was a sense that we’ve gotten past the worst of it, so let’s not overreact. Now the fact that all of these (European) governments have taken on all this debt, I think people now realize the crisis isn’t over yet and don’t really want the financial industry going back to taking risks.”
Banks and the financial industry spared little expense in lobbying. Citigroup Inc. deployed 38 lobbyists, Moody’s Corp. 13, and Bank of America 11, all dedicated to the financial reform legislation, according to disclosure documents.
Even with Tea Party protests against Wall Street excesses and Democrats’ push to toughen government oversight for big banks, the financial industry managed to score some victories.
Peter Garuccio a spokesman for the American Bankers Association, said the industry’s accomplishments, at least up to now, include preserving Federal Reserve oversight of state member banks and eliminating a proposal for a $50 billion fund to help pay for dismantling large banks considered too big to fail.
“Some of the concerns we’ve raised have been addressed, others have not, and others have been partially addressed,” Garuccio said. “It’s still an on going process.”
No lawmaker wants to support a provision that could be responsible for the next financial crisis, said Bill Himpler, executive vice president of the American Financial Services Association. The challenge for lobbyists representing banking and finance organizations, which generally support some form of reform, Himpler said, is to demonstrate how various popular provisions do more harm than good for consumers and the financial industry. “I think we’ve got our work cut out for us,” he said.
Reform advocates have their own victories to point to in the legislation’s current form. They include the creation of a federal consumer financial protection bureau, fee limits on debit card transactions, and a one-time audit of the Federal Reserve’s role in the financial bailout. The Senate voted on Thursday to end debate on the bill, clearing the way for final passage.
What happens as the House and Senate reconcile separate versions of reform legislation remains to be seen, but Amaya Tune, spokeswoman for the AFL CIO, which supports reform measures, feels confident that consumers, not Wall Street, will come out on top.
“I think the chances of this staying a strong bill and not getting watered down are pretty good,” Tune said. “That being said, we’ll cross our fingers.”