The six biggest bailed-out banks have hired more than 240 ex-government workers as lobbyists in an effort to influence the financial regulatory reform bill.
A report by the Campaign for America's Future and the Public Accountability Initiative estimates that the six banks—Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley and Wells Fargo—and their trade associations have spent close to $600 million on lobbying and other political contributions since the first major bailout of Bear Stearns in March 2008. Two of the top trade associations the report lists are the Securities Industry & Financial Markets Association and the American Bankers Association.
"This report would be shocking, were it not so sad and predictable," said Robert Borosage, co-director of the Campaign for America's Future. "The revolving door continues to swing fast and loose in Washington as the big banks continue to try to kill or weaken common sense financial reforms."
The report says that Citigroup employs 55 lobbyists, more than any other bank or financial company. (Citigroup says that number is too high, The Huffington Post reported.) Until recently the government was Citigroup's largest shareholder.
Two of the 27 pages in the report identify lobbyists by name and photograph. This includes 33 former chiefs of staff, 54 former staffers to the House Financial Services Committee and Senate Banking Committee and 28 former legislative directors.
"Congress has become a job placement agency for big bank lobbyists," said Kevin Connor, author of the report. "This report shows how the six biggest banks have used the revolving door and legal bribery to gain unrivaled access to Washington's corridors of power. The result is a never-ending cycle of fraud, bailouts, and backroom deals."
Nonetheless, lobbyists are still fretting about the details of the financial overhaul legislation, which seeks to address the regulatory lapses that led to the financial crisis.
The report, "Big Bank Takeover: How Too-Big-To-Fail's Army of Lobbyists Has Captured Washington," does not include other industries that are spending similar amounts of money to influence Congress.
"I would suspect that if you added up money spent by all industries together it probably dwarfs what the banks are spending," said Mark Calabria, director of Financial Regulation Studies at the CATO Institute, a public policy research center. "Clearly they are after their own interests, but so are lots of other industries."
The report suggests that banks are gaming the process, but Calabria says the setup isn't unique to their industry, and that to some extent it's justified. "You should be able to spend money to protect yourself," Calabria said. "Saying banks shouldn't be able to spend money on lobbying is like saying homeowners shouldn't spend money on locks."
