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The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
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Top Financial Services Committee Members Rely Heavily On Finance Campaign Contributions
One year after the biggest economic collapse since the Great Depression, Congress is still debating new financial regulations to protect consumers and prevent risk-taking in the financial sector. The House Committee on Financial Services is currently undertaking the important first step of writing, amending and voting on some of the pieces of the long-proposed financial regulatory reform. While debating these issues top committee members have been the recipients of disproportionate campaign contributions from the very industry that they are tasked with regulating.
Twenty-seven committee members have so far received over one-quarter of their contributions from the finance, insurance and real estate (FIRE) sector. This includes Chair Barney Frank, Ranking Member Spencer Bachus, four subcommittee chairs and four subcommittee ranking members. Of the twenty-seven, twelve committee members received over 35% of their contributions in 2009 from the FIRE sector. All contribution data was collected from the Center for Responsive Politics’ OpenSecrets.org.Ranking Member Bachus, a crucial decision maker on the committee, received 71% of his campaign contributions from the finance, insurance and real estate (FIRE) sector so far this year. (These numbers run from January 1-June 30.) For his career, the Alabama congressman receives 45% of his contributions from the FIRE sector. Bachus leads the committee in his reliance on FIRE sector campaign contributions. Bachus has taking a position in opposition to most of the regulatory reforms. Bachus recently stated in a hearing, “this is absolutely the wrong time to be creating a new government agency empowered not only to ration credit, but to design the financial products offered to consumers.”
Top Recipients of FIRE Campaign Contributions by % (2009) Name Party FIRE Contributions Total Contributions Percentage Spencer Bachus R $161,200 $226,930 71.04% Kenny Marchant R $25,000 $46,043 54.30% Paul Kanjorski D $215,200 $397,215 54.18% Greg Meeks D $114,900 $218,340 52.62% Mike Castle R $104,000 $200,027 51.99% Dennis Moore D $139,097 $275,480 50.49% Mel Watt D $23,000 $50,696 45.37% Melissa Bean D $269,800 $634,535 42.52% Ed Royce R $200,635 $504,418 39.78% Randy Neugebauer R $146,810 $384,205 38.21% Jeb Hensarling R $140,660 $371,731 37.84% Nydia Velazquez D $58,100 $164,750 35.27% View the bar chart Pennsylvania Rep. Paul Kanjorski is the Chair of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and is tasked with crafting many of the initial bills for the proposed financial regulatory reform. While undertaking this important work Kanjorski has had enough time to raise large sums for his reelection. Of the $397,215 that Kanjorski has raised in 2009, 54% of it comes from the FIRE sector. For his career, Kanjorski received 44% of his contributions from the FIRE sector. Of all Financial Services Committee members, only Kanjorski and Bachus receive over 40% of their career campaign contributions from the FIRE sector.
Kanjorski has stated that he will be watchful of the influence the finance and insurance companies hold in the committee, “”We must ensure that special interests do not weaken particular solutions to the point of becoming toothless.” Earlier this year, however, Kanjorski held a fundraiser that was thrown by lobbyists for financial services organizations. Kanjorski refused to release a list of attendees to the fundraiser.
Recently, Kanjorski has introduced a series of bills to reform the regulatory structure for the SEC, hedge funds and insurance. Many trade groups and companies that have donated to Kanjorski and other committee members are organizing to oppose large sections of the bills.
The industry has already had successes this year. Committee consideration of a bill to create a proposed Consumer Financial Protection Agency was delayed after industry trade groups sent a letter to the committee demanding they delay consideration. The bill was later changed to be narrower in focus than the original language.A Bloomberg report also notes that the derivatives lobby, headed by large banks JPMorganChase, Goldman Sachs and Credit Suisse, worked the New Democrats, including Rep. Melissa Bean, to get changes made to a bill aimed at filling holes in derivative regulation. Officials in the Obama administration stated that the resulting bill, released as a discussion draft, “created too many loopholes and had the potential to exclude all hedge funds and corporate end-users from oversight.” Bean received 42% of her $634,535 in campaign contributions in 2009 from the FIRE sector.
While top committee committee members are seeing the FIRE sector make it rain on their campaign committees, a number of less senior members are pulling in more modest sums. Thirty-five committee members receive 20% or less of their 2009 contributions from the FIRE sector. Ten of these thirty-five members received 12% or less from the FIRE sector so far in 2009, half of the 24% committee average.
These bottom twelve include Rep. Maxine Waters, who has received no money from the sector, and Rep. Ron Paul who has pulled in only $1,000 or 3% of his 2009 campaign haul. The other members in the bottom ten are Reps. Steve Driehaus (8%), Keith Ellison (8%), Mary Jo Kilroy (8%), Frank Lucas (9%), Carolyn McCarthy (11%), Alan Grayson (12%), Adam Putnam (12%) and Al Green (12%).
All campaign contribution data is courtesy of the Center for Responsive Politics (OpenSecrets.org) A CSV of the research is available. Feel free to use it, but please cite Sunlight and CRP/OpenSecrets.
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New Financial Regulations and Read the Bill
Two days ago, President Obama announced his plan for new regulations to police the financial industry in the wake of last year’s global financial meltdown. One of those proposals would require oversight of financial derivatives for the first time. The oversight of financial derivatives — the trading of which is commonly thought to have led to the high risk behavior of AIG and other companies that collapsed last year — was considered back in the 1990s, but was stopped when Congress inserted the Commodity Futures Modernization Act (CFMA) into an 11,000 page conference report the day before a vote took place.
For the full story on the passage of the CFMA, read the case study I wrote a few months back. And if you find it outrageous that Congress passes bills like the CFMA without giving anyone, including themselves, time to read the bill, proceed to ReadTheBill.org to help us pass H. Res. 554, which would require bills to be posted online for 72 hours prior to consideration.
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Read the Bill: The Commodity Futures Modernization Act
As part of the Read the Bill campaign, we’ve been writing a series of case studies highlighting bills that slipped through Congress with little time for public input or for lawmakers to review. After reading the following, please go to ReadTheBill.org and sign the petition to tell Congress that bills should be made publicly available for at least 72 hours prior to consideration. And now, your case study: the Commodity Futures Modernization Act of 2000.
In the waning days of the 106th Congress and the Clinton administration, Congress met in a lame-duck session to complete work on a variety of appropriations bills that were not passed prior to the 2000 election. There were other, unmet pet priorities of some lawmakers that were under consideration as well. One of those pet priorities was a 262-page deregulatory bill, the Commodity Futures Modernization Act. Tucked into a bloated 11,000 page conference report as a rider, with little consideration and no time for review, this bill would be viewed only eight years later as part of the failure of our political system abetting a financial storm that brought the world to its knees. (Continue reading…)
