With senators voting this week on financial reform legislation, let's peer into the smoke-filled rooms to see where real business is conducted.
Since the feds bailed out Bear Stearns in March 2008, the six largest U.S. banks and their main trade associations have dropped roughly $600 million on lobbying activities, according to a new report released by labor union SEIU and progressive political groups. The financial industry has spent an average of $1.4 million per day during the reform fight. Where does the money go? Projects like this:
During the "Hill Blitz" organized by the Financial Service Centers of America, a trade group, about 40 industry executives pushed to exempt check cashing from the purview of a proposed bureau that would oversee consumer financial products.Like pilot fish trailing a whale, lobbyists always escort major bills in Congress. But the effort to revamp the financial industry has caused a veritable feeding frenzy. Over the last two years, big banks have greatly stepped up their financial contributions to anti-reform organizations such as the U.S. Chamber of Commerce and Business Roundtable.
In turn, the groups hire "astroturf" shops like Democracy Data & Communications. The Chamber has retained the firm on behalf of Bank of America (BAC), JPMorgan Chase (JPM) and other banks, to rally corporate employees and customers to oppose reform.
But the key to effective lobbying is getting into the smoke-filled room. Fortunately, it has a revolving door. In all, 243 lobbyists working for six big banks and their trade associations are former federal government employees, according to the report. Of these, 202 worked in Congress, mostly as aides to lawmakers, while the rest were in the White House, U.S. Treasury or another government agency.
Citigroup (C) has the biggest team of "revolving door" lobbyists, with 55, followed by Goldman Sachs (GS), JPMorgan, Morgan Stanley (MS), Wells Fargo (WFC) and B of A. [After this piece was published, a Citi spokeswoman contacted me to say that as of the first quarter, the company employed a total of 37 in-house lobbyists and "outside consultants." That would rank Citi No. 2, after Goldman, by size of lobbying team.]
Here, as summarized in the report, are some of the big banks' top lobbying guns:
Bank of America B of A's in-house lobbyist team is headed by John Collingwood, formerly the FBI's congressional liaison and a top official under three different FBI directors. After retiring, he became a top lobbyist for credit card company MBNA and played a major role in passing the 2005 bankruptcy reform bill. When B of A bought MBNA, he became the bank's top lobbyist and brought other credit card lobbyists with him.Image from Flickr
Citigroup Head lobbyist Nick Calio was formerly a top congressional liaison for both George H. W. Bush and George W. Bush. As the Republican arm of lobbying firm O'Brien-Calio during the Clinton administration, he was hired by big business to lead the lobbying fight over the the North American Free-Trade Agreement, fast-track trade authority and expanded trade with China.
Goldman Sachs Head lobbyist Faryar Shirzad joined the bank after serving as a top national security and international economics adviser to President Bush. He coordinated trade policy for the Bush-Cheney Transition Team in 2000 and was previously a top international trade adviser to the Senate Finance Committee.
JPMorgan Chase The bank's top government relations executive and in-house lobbyist is William Daley, former Clinton official, brother of Chicago mayor Richard Daley and co-chair of President Obama's inauguration. The bank's top registered lobbyist, Democratic insider Peter Scher, reports to Daley. Scher was a top Democratic staffer during the Clinton years, serving as chief of staff to Sen. Max Baucus, D-Mont., then to Secretary of Commerce Mickey Kantor.