Bailout Debate Spawns High-Stakes Lobbying Scramble

The auto-financing industry packages loans and sells them as securities on Wall Street, much as mortgages are sold. While the securities have held up relatively well in the credit crisis, Wall Street has little interest in buying new ones, which is drying up credit for auto purchases, said Chris Stinebert, AFSA's president. He said he would like the Treasury Department to buy new auto-loan-backed securities to create liquidity in the market.

"Absent intervention by Congress, the ability of domestic manufacturers to finance new motor vehicle sales may come to a halt," the group's memo said. "To ensure continued auto sales, Congress should explicitly authorize Treasury to purchase motor vehicle financing assets from industrial banks and non-bank finance companies."

The Coalition of Private Investment Companies, a hedge-fund lobbying group chaired by the noted short seller James Chanos, has stayed out of the fracas over the $700 billion bailout proposal and instead focused on new short-selling rules announced by the Securities and Exchange Commission.

Last week, the SEC temporarily banned the shorting of financial stocks and said it would require big investors to start disclosing their short positions, which essentially are bets that a stock will decline.

Since July, when the SEC started limiting certain types of short selling, Chanos's coalition has had a number of meetings and conversations with the agency to discuss the role of short sellers in the market, said Andrew Lowenthal, president of the government relations firm Porterfield & Lowenthal, which represents the coalition.

But most of the coalition's efforts have not been waged behind closed doors, Lowenthal said.

Mainly, the group has relied on public statements and an opinion piece titled "Short Sellers Keep the Market Honest" by Chanos in Monday's Wall Street Journal to communicate the coalition's position

"It's been very open and overt with the way we've gone about it," Lowenthal said, "precisely because we believe the case needs to be made not just to the commission but to the public."