Sunday, May 03, 2009
Don’t shed tears for the poor banking industry, which Americans taxpayers have had to bail out in recent months. From 1997 to 2008 the financial sector did very well for itself, accounting for up to 40% of all corporate profits. With their accounts flush with cash, banks, insurance companies and real estate ventures spent heavily on lobbyists in Washington, DC—to the tune of $3.6 billion during this time period. Overall, the investment in lobbyists by the financial industry went up 260% over these 11 years, according to the Sunlight Foundation.
The money was well spent, as the financial sector won important changes in federal law, such as the deregulation of financial derivatives and credit default swaps, the elimination of the line between investment banks and commercial banks, tougher requirements for consumers to declare bankruptcy, and fewer restrictions on the accounting methods of Fannie Mae and Freddie Mac.
Approximately 3,000 lobbyists were paid by the financial sector from the late 1990s until now. According to a report by Essential Information and the Consumer Education Foundation, about 140 former government officials have lobbied on behalf of finance sector firms since 1998, including five former congressmen and dozens of top aides to congressmen, senators, and key congressional committees.
-Noel Brinkerhoff
“They Frankly Own The Place” (by Paul Blumenthal, Sunlight Foundation)
Sold Out: How Wall Street and Washington Betrayed America (Essential Information and Consumer Education Foundation) (PDF)
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