Big Bank Takeover: Report Blames Revolving Door For 'Too Big To Fail'
How have big banks preserved their "Too Big To Fail" status? With giant bags of money and an army of lobbyists who used to work in government, says a report to be released Tuesday by the SEIU, Campaign for America's Future and the Public Accountability Initiative.
The six biggest banks -- Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley, and Wells Fargo -- employ 243 former staffers and members of Congress as in-house lobbyists and via trade associations and boutique K Street firms. That total includes 33 chiefs of staff, 54 staffers from the House Financial Services and Senate Banking committees, and 28 legislative directors.
"Many of the revolving door lobbyists were key architects of financial deregulatory legislation during their time as congressional staffers," the report notes, "including Gramm-Leach-Bliley and the Commodity Futures Modernization Act."
The flipside of this phenomenon, which the report doesn't mention, is lobbyists taking jobs on the Hill. It's rampant: A HuffPost analysis of House Financial Services staffers found in December that 18 percent of current committee staff previously worked on K Street, mostly for banks -- and mostly Democrats. (After all, if people just went from the Hill to K Street, wouldn't it be more of a turnstile than a revolving door?)
Citi has hired 55 former staffers as lobbyists -- the most of the big six banks. Who are these people? The report, written by Kevin Connor of the Public Accountability Initiative, wants you to know: Click HERE to see their names and faces. The Public Accountability Initiative runs LittleSis.org, best known as an involuntary Facebook for lobbyists.
Some key members of Congress are losing patience with the revolving door thing. In April, Rep. Barney Frank (D-Mass.), chairman of the financial services committee, permanently banned a committee staffer from lobbying his committee after the staffer cashed out for a K Street job.
About those moneybags: The six big banks have spent just under $600 million since the bailout of Bear Stearns in March 2008 -- the dawn of the current TBTF era -- on lobbying, trade association activity, and political contributions. A huge proportion of that total is spending by trade groups like the American Bankers Association and the Financial Services Roundtable.
The report notes that to a certain extent, as Barney Frank will tell you, big bailout banks have toxic reputations on the Hill. That's why the number of finance lobbying filings by generic groups like the Chamber of Commerce and the Business Roundtable -- the "Shadow Bank Lobby" -- has nearly tripled since 2007.
What's the upshot of all this? The defeat of the Brown-Kaufman amendment, which would have broken up the big banks and which went down in flames last week despite bipartisan support. From the report: "The four Democrats with the most staffers lobbying on behalf of big banks -- Chris Dodd, Charles Schumer, Tom Carper, and Tim Johnson -- all voted against the amendment."
There is a distinct lack of consensus that the remaining provisions of the bill before the Senate will end TBTF.
Click HERE to download a PDF of the report.
UPDATE 11:45 AM: Citi says it currently employs fewer than 55 lobbyists.
"Citigroup employed fewer internal and external consultants than reported, and that number has consistently trended downward since the beginning of 2009," said a Citi spokeswoman in a statement. "As of the lobbying disclosure report filed in the first quarter of 2010, Citi has a total of 37 in-house and outside consultants on staff. We have an obligation to our employees, shareholders and customers to advocate our positions to policy makers."
Kevin Connor, the report's author, says the number is based on lobbying data from the first quarter of 2010 and all of 2009.