“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”
– United State Senator Dick Durbin
When one of the most powerful members of Congress, a ranking member of the majority party, confesses to not being so powerful, we need to take notice.
What exactly does Durbin mean by banks “owning” Congress and what are its implications?
When it comes to politics, “ownership” can take many forms:
1. Lobbying elected officials. Corporations that received federal TARP bailout funds spent over $77 million lobbying federal elected officials in 2008. Lobbying can take many forms — from direct meetings with legislators and/or their aides to influence legislation, to sponsorship of “fact-finding” junkets to exotic locations for elected officials, to organizing groups/campaigns to influence legislators.
2. Providing campaign contributions (I prefer the more accurate term “investments”) to elected officials. The Center for Responsive Politics (CRP) reports that TARP bailout corporations in 2008 made $37 million in campaign investments in 2008.
3. Having your own people in political decision-making roles. The list under Bush and now Obama of former big bankers now writing the laws and/or supposedly “regulated” bank actions is led by none other than former Goldman Sachs executive Timothy Geithner, who now heads the Treasury Department. So many former Goldman Sachs execs occupied key financial roles in the Bush and now Obama administrations that the company is affectionately referred to by many as “Government Sachs.”
What are the implications of all this?
1. Money. CPR states the combined $114 million in lobbying and campaign contributions/investments in 2008 yielded $295.2 billion from the federal government’s Troubled Asset Relief Program (TARP) to 26 mega corporations. That translated to a 258,449 percent return. Not a bad investment! And there’s more coming. An additional several trillion dollars in loans and other federal guarantees have been made to the banks — many to back up their so-called “assets” that represents in many cases multiples pieces of paper backing up the same real tangible true asset. It’s a financial mirage in which we taxpayers and our descendents will be paying off for generations.
2. Protection from regulation or control. The mega banks have turned to their friends inside the administration to prevent major regulations from being enacted. AIG employees still received their bonuses. Banks were not forced to use TARP money to expand credit. No audits of banks receiving bailout funds has been passed. There have been no laws calling for a return of misused bailout funds. Legislation to protect home owners from foreclosures through the courts was foiled. Enforcement of the Prompt Corrective Action Law (mandating public control of insolvent banks) is nonexistent. The rules governing “stress tests” of banks are (re)written in by banks The list is long.
Ownership indeed has its privileges.
Top Senate Democrat: bankers “own” the U.S. Congress
TARP Recipients Paid Out $114 Million for Politicking Last Year