For lobbyists, banks tap Washington pipeline, report finds
Tuesday, May 11, 2010; 5:38 PM
The country's largest banks and trade groups have hired more than 240 former government officials and legislative staffers to lobby on their behalf in Congress, part of a broader campaign by Wall Street firms to limit the impact of proposed reforms on their industry, according to a report issued Tuesday by liberal groups.
The list of former government employees who have lobbied for the nation's six largest banks since last year includes 33 chiefs of staff, 28 legislative directors and 54 staffers with ties to the House Financial Services Committee or Senate Banking Committee, the report said. The study also estimates that the top banks -- Bank of America, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Wells Fargo -- joined with financial services trade groups to spend nearly $600 million on lobbying and campaign contributions since the government's first major bailout of Bear Stearns in March 2008.
The report, compiled by the Campaign for America's Future, the Public Accountability Initiative and the Service Employees International Union, is aimed at increasing the political pressure on Wall Street banks as Congress enters the final stages of debate over a proposed overhaul of the financial regulatory system. Unions and liberal activists say the financial sector has already successfully beaten back attempts to limit the overall size of banks and is now intent on limiting the bill's impact on derivatives trading and other lucrative but risky practices.
"They exercise immense political power," said Robert Borosage, co-director of the Campaign for America's Future. "What for the banks is a relatively small investment in lobbyists and legislators can provide a massive return on investment for the dollar."
Representatives of several banks and financial trade groups blasted the report as an unfair and distorted attack by liberal interest groups. "What this report ought to look at is the virtual extortion of political contributions from unwilling union members and the failure to properly register senior leaders as lobbyists," said Glenn Spencer, executive director of the Workforce Freedom Initiative at the U.S. Chamber of Commerce.
Molly Millerwise Meiners, spokeswoman for Citigroup, which was a major beneficiary of federal aid during the banking crisis, said the report used flawed data that inflated the bank's roster of 37 registered lobbyists.
"Our government relations department serves as a link between the businesses and government, advocating policies and positions that shape the operating environment and providing industry expertise to further develop the operations of financial institutions as a whole," Millerwise Meiners said. "Citigroup supports modernizing financial regulations to ensure a strong global financial system that fosters economic growth and provides financial services and security to the American people."
The report comes amid a furious lobbying frenzy by the financial sector over the financial overhaul legislation, which among other things would create an agency to protect consumers and give the government power to wind down large, troubled firms. Disclosure records show that the top 25 firms in the commercial banking industry spent more than $11 million on lobbying during the first three months of 2010, but some of the industry's most powerful lobbyists complain that the legislation has become too politicized and open to public input.
SEIU and other liberal groups are planning a protest May 17 on K Street in downtown Washington as a way to further highlight the role of lobbyists in the financial overhaul debate, organizers said. "Wall Street's recovering but America's still in huge trouble," said Stephen Lerner, director of SEIU's banking and finance campaign.