Financial companies may be scrambling for cash but being low on funds hasn’t stopped their political spending according to a report in the Los Angeles Times.
The U.S. Chamber of Commerce, the strongest voice in Washington for the business community, spent $30 million on lobbying in the third quarter of this year, more than twice as much as it spent for the same purpose in the previous quarter. The spending is part of the most aggressive election-year effort the chamber has ever made, a spokesman for the organization said.
… This month nearly two dozen chamber lobbyists blanketed Capitol Hill, leading a business coalition that argued for swift passage of a financial rescue measure. Among other things, the chamber opposed any amendments that would make it easier to file lawsuits against banks and other firms receiving federal aid through the rescue package.
As Congress considers stronger oversight of the financial industry, lawmakers must ensure that bailout funds can’t be spent to lobby against taxpayer interests.
This week Sen. Dianne Feinstein (D-San Francisco) announced plans to introduce legislation to "ensure that government loans or federal funds granted to ailing companies as part of the recent economic rescue package are not used for lobbying."
She also wants to limit use of the money for extravagant perks, such as the $440,000 weeklong event at the St. Regis Resort in Dana Point attended by senior executives and salespeople of AIG just days after the federal government lent the company billions.
"The day should be over for these kinds of things, particularly for the public company that is using taxpayer money because they’ve done bad things or made poor decisions," Feinstein said.
She and Sen. Mel Martinez (R-Fla.) blasted AIG for recently lobbying state regulators to delay or weaken new rules for mortgage lending.
AIG said this week that it was suspending all lobbying activities temporarily.
"We find it unconscionable that AIG would take advantage of these taxpayer loans while paying lobbyists to roll back taxpayer protections against misrepresentations, deception and fraud in mortgage lending," the senators wrote to AIG Chief Executive Edward M. Liddy on Oct. 17.
The legislation should be fast-tracked when Congress returns to Washington. Re-regulation of the financial industry could be the only good thing to come out of this crisis.
Congress can’t bail out companies that crashed because no one was watching, then let those companies spend the fix-it money fighting stronger oversight.