Welcome to the brave new world where your federal bailout dollars will be used to re-elect member of Congress in the next Federal elections.
Hundreds of millions of bailout dollars will be used to elect members of congress, mostly conservatives. Some of the money will find its way into state elections in Gubernatorial, Supreme Court, and legislative races.
Most likely, some of the money is already earmarked to defeat Wisconsin Supreme Court Justice Shirley Abrahamson who is on the April ballot in the Badger State.
Saturday’s New York Times reported that Congress is considering legislation
that would control the lobbying and political campaigning by recipients
of federal bail outs. Firms That Got Bailout Money Keep Lobbying
......the growing dilemma facing private companies (bail out recipients), which increasingly deal with the federal government not only as rule-maker but also as shareholder, lender and trading partner.
Pressing federal policy makers risks the appearance of recycling public money to advance a private agenda, while staying on the sidelines could put a company at a comparative disadvantage.
The problem is complicated. The federal bailout money will be used to further lobby congress and to support the election of member of congress in two years.
The Times reports that, "’Nobody mentioned that you are giving up your Constitutional right to petition the government’ when accepting federal money, said Edward L. Yingling, president of the American Bankers Association."
Wrong. There is no constitutional right to take federal money and use it to buy Congress. Readers of Waxing America knew this was a pressing issue for two years and certainly since bailout discussions began in September.
Mr. Yingling, tell your members if they do not like the rules, to turn down the money.
No one made any bank or automobile manufacturer take a cent of federal bailout money. There is a constitutional right to free speech. There is no constitutional right to use federal money to influence government or to buy future elections.
There are two very critical issues.
First there is the question of bans and disclosures. Obviously a ban has more teeth than disclosure.
Secondly there is the use of the money – the financial service companies can use it for lobbying or electioneering, or both. Some of the money is already going to pay lobbyists to influence legislation such as the pending bill S. 133 Troubled Asset Relief Program Transparency Reporting Act"
Lawmakers, troubled by the prospect of taxpayer-subsidized influence-peddling, are threatening to crack down. Senator Dianne Feinstein, a California Democrat, and Senator Olympia J. Snowe, a Maine Republican, are pushing legislation that would explicitly bar companies from using bailout funds for lobbying or campaign contributions. (Emphasis added)
I have already been told that similar legislation failed in the House, where there was:
...some opposition from Committee (House) staff as well as Legislative Counsel. Committee staff was concerned that any restrictions on communication to government would restrict the free flow of information and transparency required to track their progress. Legislative Counsel was concerned about the first amendment rights issue...
Here is what will happen. Just as AIG put $25 million into the United States Chamber of Commerce from 2001-05, , similar amounts will go to that organization and trade associations like Mr. Yingling’s American Bankers Association under the guise of "lobbying."
Some portion of those hundreds of millions from AIG, Citigroup and General Motors will actually be used to pay the salary of lobbyists.
The bulk of the money will be used to purchase campaign "issue ads." These trade associations will either directly make the purchase as the U.S. Chamber of Commerce did last fall to re-elect Norm Coleman (R-MN) or funneled to organizations like American Tort Reform Association, Americans for Prosperity, and even All Children Matter who will then purchase issue ads to reward their friends.
Follow the money. Your tax dollars went from the federal government to the Citigroup to trade associations to issue groups to buy television ads to influence elections.
Firms That Got Bailout Money Keep Lobbying