Lawmakers are lashing out at the financial industry for lobbying against regulatory changes even as they receive millions of dollars in campaign contributions from the same interests.
Political action committees (PACs) for the financial, insurance and real estate sectors have contributed roughly $20 million this year to House and Senate lawmakers as well as other political committees, according to the nonpartisan Center for Responsive Politics.
President Barack ObamaBarack ObamaWhite House staff to skip correspondents' dinner Overnight Energy: Trump signs climate order | Greens vow to fight back GOP lawmakers defend Trump military rules of engagement MORE called bankers “fat cats” this week before meeting at the White House with the CEOs of some of the nation’s largest firms to encourage them to lend more money to small businesses.
Democratic leaders have lashed out at financial lobbying interests for attempting to scuttle significant parts of the overhaul effort, particularly a new Consumer Financial Protection Agency (CFPA) to regulate mortgages, credit cards and payday lenders.
But as the rhetoric heated up, the industry has continued to make campaign donations, and lawmakers have continued to receive them.
Industry employees have not shied away from making campaign contributions. At eight of the nation’s largest banks — the eight that were first to receive government bailout money — employees, including CEOs, contributed roughly $1.5 million in campaign contributions, according to the Center for Responsive Politics.
Some of that money went to industry PACs, including those at their own firms, while other money went directly to candidates.
The eight banks include Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, Wells Fargo, JP Morgan Chase & Co., State Street and Bank of New York Mellon. Those banks have repaid a total of more than $100 billion in taxpayer bailout money.
“Our people have an involvement in the process of government, as is their right as citizens. That explains why people see fit to make contributions,” said a Goldman Sachs spokesman.
Earlier this year, when the financial crisis had yet to begin to ease, lawmakers were wary of receiving contributions from banks that held money from the $700 billion bailout program.
Consumer watchdog groups, such as Public Citizen, urged bailout recipients not to make campaign contributions. Fannie Mae, Freddie Mac and American International Group (AIG) stopped, but Craig Holman, of Public Citizen, said the effort saw few other successes.
And now, with the biggest firms repaying money, “that pressure is off,” Holman said. He is seeing more money flowing to swing voters on the House Financial Services and Senate Banking committees.
Meanwhile, PACs for those banks contributed roughly $1 million to federal campaigns. The numbers will likely rise significantly as the 2010 elections approach.
The main lobbying associations for banks and securities firms have also donated millions of dollars to political campaigns.
The PAC for the American Bankers Association (ABA) contributed roughly $1.5 million to federal politicians this year. In the 2008 election cycle, the PAC gave roughly $3.7 million to federal candidates, according to PoliticalMoneyline.
The Credit Union National Association (CUNA), one of two main associations for credit unions, has given a little more than $1 million this year, said Richard Gose, senior vice president of political affairs at CUNA.
Gose said the PAC has given 57 percent of contributions to Democrats and 43 percent to Republicans. The contributions are down compared to 2007. In 2007, the PAC gave 25 percent more money, Gose said.
“Campaigns go on. They’ve got to raise money,” Gose said. “When our folks give, they give because they want to help members of Congress that are at least amenable to listening to our side of the arguments on these questions.”