ACR Applauds Move by Obama Administration and Senators to Limit Lobbying By Financial Companies Using Bailout Funds, Urges Further Action

Americans for Campaign Reform (ACR) applauds recent actions by the Treasury Department and Members of Congress to prevent financial institutions receiving taxpayer bailouts under the Trouble Asset Relief Program (TARP) to continue spending those funds to lobby government officials. The new Treasury Department ruling will limit contacts with lobbyist whose firms receive public funds, while Senators Dianne Feinstein (D-CA) and Olympia Snowe (R-ME) seek legislation to bar banking and credit card companies from using those monies for lobbying or campaign contributions.

"In a year of bad investments, Wall Street continued to strike gold in Congress. Millions of dollars in campaign contributions and lobbying expenditures ensured that the interests of Wall Street were well represented in Washington while ordinary Americans lacked a similar voice," said ACR President Dan Weeks. "We commend the swift actions by the administration and Senators Feinstein and Snowe to prevent misuse of public money and preserve openness in government. We urge further action to address the inherent conflict of interest created by big money in federal election."

Lobbying disclosures filed with the government this week confirm that many of the same financial groups that received billions from the TARP continued to invest millions of dollars in government lobbying and campaign contributions last year. Commercial banks invested $42 million to lobby the federal government in 2008 and contributed $35 million to federal campaigns. Since 1990, those same banks have contributed $213 million to congressional and presidential candidates in a pattern of bipartisan giving that consistently favored the political party in power. Members of key financial oversight committees in Congress were heavily favored, with nine of the top ten House recipients of industry contributions serving on the Financial Services and Ways and Means committees. (Figures based upon analysis of Federal Elections Commission data by the Center for Responsive Politics).

"While recent actions to bring transparency and accountability to the use of taxpayer bailouts are important, they are not sufficient to address the underlying problem of special interest money in politics. Fundamental reform of our campaign finance system through the Fair Elections Now Act is required," Weeks said.

Introduced by Senators Dick Durbin (D-IL) and Arlen Specter (R-PA), the Fair Elections Now Act would provide a citizen-driven alternative to the current campaign finance system. Under the proposed law, qualifying candidates who accept only small donations would receive sufficient matching funds to run competitive campaigns.

"When politicians responsible for writing America's financial regulations rely on substantial sums of campaign contributions from affected industry groups, their independence as regulators is undermined," Weeks said. "Only by severing the link between special interest money and elected officials can we restore integrity to the policymaking process in time to prevent future crises."