If money is the mother milk of politics, then big bucks from the banks and financial industry are souring financial reform legislation being debated in the House of Representatives this week. A new analysis by Consumer Watchdog shows just how rotten the Capitol Hill dairy is.
Thirty-four members of the U.S. House of Representatives that offered floor amendments to weaken consumer protections in the House financial reform package received $3.8 million in campaign contributions from the financial sector in 2009, an average of $111,000 each. "New Democrats," who delayed consideration of the bill last night until their demands on amendments were met, raised $6.5 million from firms in the financial sector.
The financial sector gave a total of $28 million to all members of the House of Representatives this year.
What's at stake is weakening the Consumer Financial Protection Agency, the top priority for financial industry lobbyists. U.S. Chamber of Commerce executive David Hirschmann said, "We'll spend whatever it takes," upon the launch of a multi-million dollar financial industry campaign against the consumer protection agency in September.
Another top priority is for the banking industry to prohibit states from enacting strong consumer protection laws against financial abuses when federal rules do not provide consumers with enough protection. According to news reports Wednesday night, the amendment forced unspecified changes to the financial reform bill, presumably allowing some additional preemption of state authority. The New Democrat coalition held up consideration of the financial reform bill until changes were made. The list of proposed amendments that would have weakened the Consumer Financial Protection Agency can be found here.
Sponsors of the original amendment to override state consumer protections received $1.4 million in campaign contributions from companies in the financial sector in 2009, and $11.4 million over the course of their careers. Primary sponsor, Illinois Representative Melissa Bean, has received $393,000 from the financial sector, 50% of all the money she raised in 2009. The other sponsors were Reps. Adler (D-NJ), Castle (R-DE), Crowley (D-NY), Herseth Sandlin (D-SD), Lance (R-NJ) and Royce (R-CA). Adler, Bean and Crowley are members of the New Democrat coalition.
Bean represents the worst of the financial industry's Democratic representatives. She's also led a separate drive to preempt state insurance regulations. When half your money comes from one industry, it's sure you're going to represent that industry more than your constituents.
Bean and her fellow representatives may be calling themselves "New Democrats," but there's nothing new about taking money to help a wealthy interest group. That type of corruption is older than Congress. Consumer Watchdog's analysis shows "Banking Democrats" would be a far more appropriate label for this crowd.