The complete meltdown in subprime mortgages has caused a total makeover of the investment industry. The effect of the makeover on Wall Street will trickle down to Washington, with diminished campaign contributions, lobbyists out of work, and new bills and regulations to wrangle over.

First came the government takeover of Fannie Mae and Freddie Mac. The home loan giants were two of the biggest names in the Washington influence game over the past decade. The two organizations spent a combined $200 million on lobbying over the last ten years and, since 1990, have contributed $19.5 million to political campaigns. It is no wonder that Fannie and Freddie avoided the crucial scrutiny that they needed over the last ten years. And now, Fannie and Freddie’s lobbying shops are shuttered, their political contributions are cut off, and they will no longer throw extravagant fetes for lawmakers and cabinet secretaries.

Yesterday’s collapse of Lehman Brothers, the Bank of America takeover of Merrill Lynch, and today’s AIG firesale, will cause similar aftershocks in Washington. Since 1989, these companies have contributed millions to federal candidates for election:

Merrill Lynch - $14.7 million

Lehman Brothers - $9.2 million

AIG - $9.7 million

The fall-off in campaign contributions from these companies will likely spread to the entire securities and investment industry. The Wall Street Journal points out that during the 2008 election cycle securities and investment contributions are the 2nd largest source of money for Democratic candidates and the 3rd largest source for Republicans. Already those contributions have slowed over the summer months preceding this crisis.

Lobbying spending is likely to shift, but probably not drop-off. Since 1998, Merrill Lynch spent $39.3 million on lobbying in Washington. That account will likely be wiped out for now, as Bank of America takes over for them. Lehman Brothers, which was denied help during their collapse, is a smaller player in Washington with $6.3 million in lobbying expenses since 1998. The events of the past few days have completely wiped out the lobbying enterprises of two companies that spent over $45 million over the decade.

The securities and investment industry is one of the biggest spenders on lobbying Washington. Since 1998, this industry has pumped $551 million into influencing decision makers in Washington. Over the past two years, 2007-2008, the industry spent over $132 million on lobbying.

With the raft of new legislation and regulations about to break through like storm surge over New Orleans levees, the industry, despite its massive financial problems, can’t afford to cut their lobbying expenses. Some lobbyists may wind up out of a job, but there will always be new ones to take their place.

(All totals calculated from data available at OpenSecrets.org.)

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Our Party Time hostess, Nancy Watzman, looks back fondly over her two weeks of Democratic and Republican convention party crashing and provides some highlights.  The Party Time project documented more than 400 parties during the two conventions, and Watzman, along with Sunlight Foundation communications director Gabriela Schneider, tried to “crash” as many as they could and blog on what they saw. Their reporting shows that despite a new ethics law in effect for the first time this year, members of Congress made merry with lobbyists at the conventions.

Read Watzman’s post to find out which party featured the best slogan—”Vote for real estate!” Find out where she observed partiers eating Caesar salad in a shot-glass, exemplifying the best “toothpick exemption” food. Read about the best no show event—a party sponsored by U.S. Bank and Visa to honor freshmen Democratic lawmakers, a party that got a lot of sunlight and exposure in the media. Learn about the most creative application of ethics law, a Kanye West concert that House members and staffers had to pay for but senators and Senate staff could attend for free. The best party-attendee perk went to the luxury porta-potties outside a Denver event. And for best definition of a “customer”, check out the account of a party thrown by Qwest CEO Ed Mueller.

Party Time doesn’t end now that the convention parties are over. The project now turns to the thousands of invitations to fundraisers and members of Congress that Watzman and staff have been collecting. There is a lot of partying happening this month, as congressional candidates get ready to report their third-quarter fundraising totals (pdf) to the U.S. Federal Election Commission on September 30. As they say over at Party Time, party on.

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Birds of a feather flock together. On Monday, our nation’s legislators will return, on winged flight, to finish up the year’s legislative work in less than 30 days. The bills of most pertinent attention will likely be appropriations bills, defense authorization, and, if necessary, a continuing resolution. The Senate Democrats just released an e-mail describing their September legislative agenda and groups are lining up to fight over a number of bills. Below, I’m going to take a quick look at the influence game around three of the bills that will surely get a vote in the next three weeks.

There are three bills outside of appropriations and military authorization that will come up in September. These include S. 3268, a bill to restrain energy speculation markets; S. 3186, a bill to provide low income heating assistance; and H.R. 1338, a bill to end gender discrimination in workplace pay. Using MAPLight.org’s listing of supporting and opposing interest groups and Open Secrets’ campaign contribution and lobbying data I have created some graphs showing the level of money groups are pumping into these two influence channels, and which side is spending more.

[Update: I only used 2008 data for these numbers. Campaign finance data at Open Secrets is updated through the second quarter filing period, which covers contributions up to June 30, 2008. Lobbyist disclosures also go through the second quarter filing covering spending up to June 30, 2008.]

S. 3268 — Stop Excessive Energy Speculation Act of 2008

S. 3186 — Warm in Winter and Cool in Summer Act

H.R. 1338 — Paycheck Fairness Act

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From Teapot Dome to Ted Stevens, the oil and gas industry holds a special place in imagination of Americans. This industry is one that is deeply connected to numerous corruption scandals throughout American history. In the 1920s, the Ohio Gang bought the election for Warren Harding, installed their own Interior Secretary and Attorney General, and went about stealing public lands to drill for resources. In the late 1990s and early 2000s, Enron rigged the electricity market in California, helped elect a president, and funneled huge amounts of money into Republican coffers. And in 2008, Alaska’s senior senator, Ted Stevens, was indicted on charges related to his accepting gifts in exchange for seeking favors for the Alaskan oil company VECO.

Today, campaign contributions from the oil industry are ubiquitous in presidential and congressional races and oil lobbyists are paid millions in Washington. But in many ways, this is an old story. Instead of looking at oil and gas influence, why not look at the influence coming from new energy sources. If you’ve been watching television or reading the news, you’ve probably noticed the growth of stories surrounding alternative energy, from the explosion of wind turbine farms, Al Gore’s WE campaign, and T. Boone Picken’s plan. How does this nascent, yet exploding, industry measure up to the influence giants in Washington? (more…)

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Last week, finger food and Kanye; this week, finger food and Tom DeLay. The convention parties have already kicked off in St. Paul and you can still follow intrepid party-reporter Nancy Watzman at Party Time.

Brian Ross and the ABC investigative team were in St. Paul last night and found quite a few parties happening:

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Public Campaign Action Fund just released a report on total influence spending by the big oil, coal, and electricity interests for the first half of this year. The report shows that from January 1 to June 30 these companies have put down nearly half a billion dollars on trying to influence members of Congress, officials in Washington, and, through advertising, you. The total amount, viewed above, consists of campaign contributions, lobbying expenses, paid advertising and media, and contributions to 527s and other organizations doing political work.

Check out the report. It’s an excellent examination of how industries use various channels to gain trust and influence.

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