Wary of relentless public anger over bailouts and bonuses, major U.S. financial firms have taken a low profile when it comes to congressional and administration efforts to regulate the industry. Some have even said they agree with the need for new regulations and the drive to end "too big to fail." Behind the scenes, it's a different story. Lobbying expenditures by the eight firms that spent the most rose 12% to nearly $30 million in 2009. This effort was particularly intense in the final three months of the year, as Nathaniel Popper reports today at the Los Angeles Times:
"I have never seen such a scrum of bank lobbyists as I have in the last year -- and I've worked on quite a few bank issues over the years," said Ed Mierzwinski, a lobbyist for the U.S. Public Interest Research Group, a coalition of state consumer organizations. "It seems like everybody is out of work except for bank lobbyists." ...
At a hearing this month, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), who has had a generally warm relationship with the financial community, lashed out at the "refusal of large firms to work constructively with Congress."
"Too many people in the industry have decided to invest in an army of lobbyists, whose only mission is to kill the common-sense financial reforms that we are working so hard up here to try to achieve," Dodd said.
Lobbying by insurers and banks, including Morgan Stanley, may kill a provision in the overhaul bill that would make retail brokers more accountable to their clients, Bloomberg News reported last week. ...
"Despite the decline in credibility with the public, the banks appear to have increasing power" on Capitol Hill, said Travis Plunkett, a lobbyist with the Consumer Federation of America.
Among the "common-sense" financial reforms they'd most like to drive a stake into is the proposed Consumer Financial Protection Agency.
Freshman Senator Jeff Merkley put the spotlight on the financial industry's approach in a piece last week in which he took note of a "cynical" how-to memo from Frank Luntz to the firms and their allies in Congress. Wrote Merkley:
The memo lays out an unapologetic roadmap for harnessing Americans' anger with bailouts and their demand for accountability ...
Say you're for reform while you kill it
Luntz writes that in order for politicians to remain popular on financial issues, they need to "be an agent of change" and state that the "status quo is not an option." Of course this advice is included in a memo explaining how to preserve the status quo. Luntz is saying, in short, pretend to be for reform while you work to kill reform.
Call financial reform a job killer
The memo tells opponents of reform to say that financial reform kills jobs. I'm sorry, but have they checked the unemployment rate lately? Failure to enact reform earlier led to the biggest loss of jobs since the Great Depression.
Blame the government
Predictably, given that the goal is to allow the banks to keep doing what they've been doing, the Luntz memo advises Republicans to blame the crisis on government instead of the banks. I will concede one point here - the government is responsible for not doing its job and allowing Wall Street abuses to run amok. But it's a tough stretch to argue that the cure is for the government to continue the same bad behavior and forgo accountability and oversight.
Merkley pointed out that this isn't theoretical, that, in fact, one of his Republican foes used a phrase right out of the Luntz memo in arguing against reforms.
While the banking firms lobbyists are at work, steadily chipping away at what is already diluted legislation, other efforts are also afoot. Senator Jon Tester challenged a bogus Luntz-inspired ad falsely claiming reform legislation now in Congress is a "$4 trillion bailout" for the banks. The ad was run in newspapers in several states by the Orwellian-named Committee for Truth in Politics.
CTP's attorney, James Bopp Jr., was behind the recent RNC "purity resolution," which aimed to get all GOP candidates to abide by a pledge not to waver from conservative orthodoxy. Bopp, an RNC committee member, also represented Citizens United in its successful bid to challenge laws limiting corporate spending on politics. And he has sued the FEC, arguing that CTP shouldn't be required to file any disclosure reports with the agency.
Writing in the Clark Fork Chronicle, Tester said:
I—along with most Americans—believe very strongly that Wall Street and its CEOs ought to play by the rules. Our economy almost collapsed a year and a half ago because there were no referees on Wall Street. And Montana’s Main Street small business owners and families should never have to pay the price of greed on Wall Street.
As jhwygirl at the progressive Montana blog 4@20Blackbirds says: Amen to that.
There's nothing astonishing about the financial industry's maneuvers. Our oligarchs didn't climb to their high perches by luck. And they won't depend on luck to eviscerate any reform that might cost them an iota of control. They never do.