One of the major points of contention in the regulatory reform debate is how to deal with derivatives, "the complex and opaque products used to hedge risk and bet on fluctuations in the financial markets." Some of the major Wall Street firms are now teaming up with Big Oil, industries that together have spent $938 million since 2009 on lobbying and campaign cash, to make sure strong derivatives regulations are defeated.
BP, a major player in the derivatives game, is a member of the Coalition for Derivatives End-Users, a group of companies pushing for a loophole in financial reform legislation to exclude derivatives trading. The American Petroleum Institute, which counts BP as a member, is opposed to derivatives provisions being considered as well.
BP might be hiding behind trade groups, but it's clear they are opposed to strong derivatives regulation--and they've been lobbying to make their voices heard. In 2009 and the first quarter of 2010, BP spent $19.4 million lobbying Congress. A portion of those lobbying fees was spent on trying to influence financial reform legislation, according data from the nonpartisan Center for Responsive Politics.
After years of fighting off oil industry regulations that might have prevented the disaster in the gulf coast, now BP is fighting off financial industry regulations that might have prevented the economic collapse we're all still suffering through.
As I said at a hearing before the House Administration Committee last week, the Supreme Court has given foreign-owned companies like BP the opportunity to spend tens of millions to influence our elections. If certain members of Congress vote the "wrong way" on derivatives, who's to say they won't throw money into the race to make sure their candidate gets elected? This is true of BP, Citigroup, JP Morgan, or any of the major companies with a stake in the financial legislation or other big-ticket items before Congress.
The DISCLOSE Act, Sen. Chuck Schumer (D-N.Y.) and Rep. John Larson's (D-Conn.) legislation to respond to the Court's decision, may put a dome-cap on independent spending, but campaign cash will still gush into candidate's coffers. The oil and gas industry has spent more than $150 million in the past decade on campaign cash to federal officeholders. Disclosure is important but it does not address the root problem.
To truly address the undue influence of special interests in our elections, Congress must pass the Fair Elections Now Act, legislation that would sever the ties between wealthy campaign contributors and Congress. With Fair Elections, candidates for Congress have the option of running a competitive campaign using a blend of limited public funds and a four-to-one match on donations of $100 or less. Fair Elections candidates are accountable solely to their grassroots base--not oil tycoons in Texas or Wall Street executives up north.
For years, BP and its Big Oil allies have used their money and influence to kill or weaken much needed regulations and they might soon get their way with financial reform. It's a perfect example of why we need the Fair Elections Now Act more than ever.