By Elana Schor - 11/30/05 12:00 AM EST
While the race for the gavel at the House Financial Services Committee has recently become a hot topic on K Street, many financial-industry giants already have let their money speak for them.
The contenders to succeed Chairman Mike Oxley (R-Ohio), who announced earlier this month that he would retire at the end of this session, have been waging subtle campaigns. Lobbyists consider the field to be smaller than earlier anticipated — Oxley’s heir, they say, will be either Rep. Richard Baker (R-La.) or Rep. Spencer Bachus (R-Ala.).
The two Southern lawmakers, both well-liked in the chamber, have received a steady stream of campaign and PAC contributions from corporations and trade groups with business before their respective Financial Services subcommittees. Baker’s panel has jurisdiction over insurance, the capital markets and Fannie Mae and Freddie Mac, while Bachus oversees banks and credit unions.
But the money flowing from financial powers to Baker and Bachus ensures more than a seat at the table during legislative negotiations. In addition to seniority, in which Baker outflanks Bachus, the Republican Steering Committee will examine fundraising prowess and relationships with industry players.
“It comes down to more than one bill, but a history” of success, when scrapping for a chairmanship, one financial-services lobbyist said.
Each hopeful has a network of faithful former staffers-turned-lobbyists, the lobbyist added, but in the end “K Street has not squat to do with it. You will have guys saying … ‘We’ll help pick the next chairman,’ but it’s leadership that decides this and a lot of factors go into it.”
“Whenever you give campaign contributions or contributions to leadership PACs, you are making a bet. You’re betting on that person winning, so they’re in a better position to help you,” said Larry Noble, executive director of the nonpartisan Center for Responsive Politics.
Bachus sits on the Steering Committee himself and is renowned for his leadership PAC largesse. In this campaign cycle, he has steered a total of just over $18,000 to 11 of the Steering Committee’s 27 members and $15,000 to the National Republican Congressional Committee.
Several of Baker and Bachus’s biggest financial-industry allies have given to both chairmanship rivals, though one lawmaker tends to outgross the other in total contributions received so far this year.
“When you’re dealing with leadership races, contributors may take sides. They have to be careful because they may be on the losing side,” Noble said.
Credit-card conglomerate MBNA, for example, gave Bachus $18,000 during the 2004 cycle and already has sent his committee and leadership PAC $15,000 for 2006. MBNA gave Baker $7,000 in the 2004 cycle and has matched that for 2006.
Similarly, Wachovia has given $13,000 to Bachus this year but just $2,000 to Baker. The banking corporation gave equal amounts to both lawmakers for the 2004 election.
Investment bank UBS Americas has shown a distinct preference for Baker, sending his campaign double the amount of Bachus’s and giving in a comparable ratio for 2004.
The New York Stock Exchange (NYSE) is Baker’s top PAC backer for 2006 but has given no money to Bachus. Despite the NYSE’s support, Baker has been one of the leading proponents of repealing the securities “trade-through rule” that helped the exchange cement its market share.
Wal-Mart is on the verge of a crucial financial-services win, as the retail empire proceeds with a bid to begin conducting banking transactions in Utah. Rep. Jim Leach (R-Iowa) withdrew his effort to block Wal-Mart before the House broke for Thanksgiving recess, citing an agreement with Bachus to examine the issue next year.
Wal-Mart has given the maximum of $5,000 to Bachus’s leadership PAC this year and for 2004, while sending nothing to Baker.
The Mortgage Bankers Association deals more often with Baker’s subcommittee than Bachus’s, particularly as Baker and Oxley work to create a stronger regulator for Fannie and Freddie, the principal government-sponsored enterprises (GSEs). But the bankers group has given $12,000 this year to Bachus’s campaign and PAC, sending Baker one-quarter that amount. Those totals are nearly identical to 2004 figures.
The National Association of Home Builders (NAHB) has joined the MBA in preferring the House’s Fannie-Freddie regulation bill to the Senate’s, whose restrictions are considered more stringent. Still, the NAHB would reap the greatest benefits from preserving the GSEs’ existing regulator, and this year could be the first that its multimillion-dollar PAC gives no money to Baker.
At a closed-door meeting among top trade-association officials in May, the NAHB criticized the House GSE bill.
The NAHB has given Bachus $5,000 for his reelection campaign, consistent with its historical pattern.
Mutual funds, under Baker’s jurisdiction and the focus of unwelcome congressional scrutiny over the past several years, have given nearly equal amounts to the two lawmakers this year through their industry trade association, the Investment Company Institute (ICI). Last year, however, the ICI formed an alliance with Bachus when its then-president and top lobbyist served as treasurers of Bachus’s joint fundraising committee.
Bachus’s partners in that now-defunct committee, Good Government 2004, were Reps. Melissa Hart (R-Pa.) and Pat Tiberi (R-Ohio) and House Administration Committee Chairman Bob Ney (R-Ohio), said to have an interest in taking the Financial Services gavel at the end of this Congress.
With just over a year remaining until the Steering Committee makes its final decision on Oxley’s successor, the front-runners are keeping their powder dry. Baker said he has been so focused on directing aid to victims of Hurricane Katrina, which brought many uprooted Gulf Coast residents to his district, that he has not yet begun planning his chairmanship campaign.
“I’m honored — I’ve been on the committee for many years — but I’ve got to focus on getting the essential business of my state organized,” Baker said. “Politics will take care of itself.”
In an e-mailed statement, Bachus echoed his colleague.
“Mike [Oxley] is chairman and will remain chairman through 2006. Until that time, our focus should be on legislative duties and maintaining our majority,” Bachus said.