Over the course of the financial reform process, the six biggest banks and their trade associations have waged an historic assault on democracy, hiring hundreds of revolving door lobbyists and spending hundreds of millions of dollars to push their legislative agenda, according to a report released today by the Campaign for America’s Future.
The report, Big Bank Takeover: How Too-Big-To-Fail’s Army of Lobbyists Has Captured Washington, shows how the six too-big-to-fail banks have hired 243 lobbyists who once worked in the federal government, including 202 who used to work in Congress, with others having worked at the Treasury, the White House, or a relevant federal agency like the SEC. (I authored the report, with assistance from researchers at LittleSis.org).
This translates into an average of 40 revolving door lobbyists per big bank.
Previous studies, including one by Public Citizen, have shown that the finance industry is spending $1 million dollars a day to fight financial reform and employing 940 former federal government employees. “Big Bank Takeover” shows that the six biggest banks — JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America, and Wells Fargo — account for a disproportionate share of this activity.
The revolving door lobbyist number includes 54 former staffers to the Senate Banking Committee and the House Financial Services committee (or a current member of that committee), 33 former chiefs of staff, and 28 former legislative directors. Citigroup leads the big banks with 55 revolving door lobbyists, though the federal government was its largest shareholder for much of this period (2009-2010).
These lobbyists left their old jobs for a simple reason: there is a fortune to be made working the halls of Congress on behalf of too-big-to-fail banks. Steve Bartlett, a former member of the House Banking Committee (now the Financial Services Committee), brought home $1.6 million in 2008 as head of the Financial Services Roundtable. SIFMA, another lobby, paid its top official, Timothy Ryan, $2 million in 2008. Ryan is a former JPMorgan executive and former director of the Office of Thrift Supervision.
SIFMA recently hired former Representative Ken Bentsen as head of its DC lobbying operation. Bentsen keeps a framed photograph of a landmark deregulatory bill, Gramm-Leach-Bliley, on the desk of his office, and for good reason: that bill helped spur the growth of megabanks like Citigroup, JPMorgan Chase, and Bank of America that fund SIFMA and pay his salary.
Bentsen was on the other side of the revolving door when that bill was passed, in 1999 — as a member of the House Financial Services Committee. He has a lot of company in that respect: Big Bank Takeover shows that many of these lobbyists worked in government during the 1990s when the too-big-to-fail banking sector got a big boost from bipartisan efforts to deregulate the financial sector.
Former House minority leader Dick Gephardt and Senate majority leader Trent Lott have a combined 16 former staffers who are now working for big banks, including Citigroup and Goldman Sachs. Lott and Gephardt are also lobbying for the banks.
Senator Chris Dodd leads current members of Congress with five former staffers now working as big bank lobbyists. One big bank lobbying firm, Porterfield, Lowenthal & Fettig has ties to the Banking committee chair, Chris Dodd, the ranking member, Richard Shelby, and Dodd’s rumored successor as chair, Tim Johnson.
Big money buys this kind of mercenary army. Between campaign contributions, lobbying spending, and trade association activity at SIFMA, the ABA, and elsewhere, the big banks and their main lobbies have spent close to $600 million since the first major federal bailout of the financial sector happened with Bear Stearns in March 2008.
Of course, that’s a drop in the bucket compared to the $160 billion these banks have received from the US Treasury, and the trillions in free money they’ve received from the Federal Reserve. But these investments are more than enough to buy their way in Washington.
And Wall Street’s lobbying operation is actually much more concentrated than the healthcare lobby. For the healthcare lobby, LittleSis.org put together a similar list of revolving door lobbyists and we found over 500 healthcare lobbyists who used to be Congressional staffers. But that was for literally hundreds of companies in the healthcare sector.
The 240 we came up with this time work primarily for six big banks.
These big bank lobbyists want to operate in the shadows. The banks are hiding much of their lobbying activity in a stealth lobby of generic business associations like the Chamber of Commerce. The report points to several instances of how banks are routing their political spending through these organizations, but there are likely many more examples.
The Washington Post reported last week that lobbyists are now looking to Congressional leaders to work out the final details of the bill in closed-door conference. Big Bank Takeover notes that at least one infamous deregulatory catastrophe happened behind closed doors: the Enron loophole, a legislative exclusion in 2000 derivatives legislation which has been blamed for spikes in energy prices. The same lobbyists that pushed for that measure are on the scene once again.
The report was released in anticipation of next week’s Showdown on K Street, when thousands of Americans will descend on DC in the hopes of setting things straight with the big bank lobby.
I’ll have more on the big banks and their influence army throughout the week. In the meantime, all this data also exists in an open format at LittleSis.org, so if you’d like to take a closer look you can check it out there. Special thanks to Priscilla for helping compile it, as well as Matthew, co-founder of LittleSis.org. OpenSecrets.org was also an invaluable resource in putting it together.
Originally posted at the Institute for America’s Future, OurFuture.org.