Financial firms have long lobbied the Federal Reserve, high-minded maker of monetary policy. But the Fed's foray into lending during the financial crisis this year has opened it up to lobbying from niche industries like recreational boat manufacturers, rental car companies, and -- Dunkin' Donuts?
Indeed. Dunkin' Brands, parent company of Dunkin' Donuts and Baskin-Robbins, began lobbying the Fed in the second quarter of this year, according to lobbying disclosure reports filed with Congress.
The New York Times reported in June that economists were uneasy with the Fed's role as a credit allocator, because decisions to favor one industry or another can be seen as political, and the Fed is supposed to be insulated from such pressure.
The number of special interests that reported lobbying the Fed shot up from 102 to 143 from the second to third quarters of 2008, as the Fed prepared to announce its Term Asset-Backed Securities Loan Facility (TALF), which lends money to investors who buy asset-backed securities from lenders in order to keep credit flowing to borrowers. When it was announced last November, the program was for securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration. The program officially launched in March, and was expanded to include commercial mortgage-backed securities in July.
So what does Dunkin' want from the Fed, exactly?
In a statement to the Huffington Post, Dunkin' Brands emphasized the fact that its franchises across the country are small businesses, and said its lobbying is on behalf of its franchises and "our nation's entrepreneurial spirit."
"While financing is still available for strong brands such as ours, for the small business community as a whole, gaining access to credit has been challenging and this has limited opportunities for entrepreneurs to go into business for themselves," said Cicely Simpson, top lobbyist for Dunkin' Brands. "On behalf of our nation's entrepreneurial spirit and in honor of our more than 2,200 franchisees, Dunkin' Brands has engaged in conversations with the Federal Reserve, the Administration, and Congress to ensure that they are aware of the credit needs of small business owners."
Simpson was not made available for a conversation, but LobbyBlog wanted to know more. What exactly was on the table during Dunkin's conversation with the Fed -- Donuts? Ice cream?
Joking aside, economists queried by LobbyBlog confirm that there is, in fact, something funny about Dunkin' lobbying the Fed.
"It's a sign of how different the world is, of how much more involved the Federal Reserve is now in specific credit allocation," said Brookings Institution fellow Doug Elliott. Elliott supports the TALF program but is one of those economists who is wary of the Fed's lending role.
"When it was just doing things that affected the economy as the whole there wasn't as much reason to lobby them, but if they're now doing things that provide help to certain categories and not others, then you have a lot of reasons to go lobby them."
Dunkin' Brands has spent $680,000 lobbying the government since last year, according to the Center for Responsive Politics. The two quarterly filings that reported the Fed had been contacted (along with the Congress and the Treasury) on Dunkin's behalf accounted for $60,000 of that total.
Fed critic Robert Auerbach was baffled.
"I just don't understand what the Fed could do for them," he told the Huffington Post. "The regulator of the banking system should not intercede for any particular investor. That should be up to private banks."
Fed officials declined to comment.