Sunlight Foundation

Ethics broadens Waters probe to examine communications with key committee

The House Ethics Committee is said to have broadened its inquiry into Rep. Maxine Waters by examining whether the Financial Services Committee fully complied with requests to turn over documents. Waters was scheduled to go on trial last month for inappropriately using her position in Congress to aid a bank that her husband had an ownership stake in in receiving money from the government bank bailout fund. That trial was delayed due to the revelation of a new e-mail that could be used as corroborating evidence. The revelation of that e-mail has led to broader questions of whether there is other evidence being withheld.

The Washington Post reports:

Four officials, congressional staff members, and others familiar with the probe confirmed on Thursday that her trial was postponed two weeks ago in part to explore the delay in not turning over that e-mail and to examine whether other evidence was withheld.

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What to expect with Rangel

Since the C-Span archives only go back to 1987 the best example that I can provide is the 1990 debate on the floor of the House over reprimanding Rep. Barney Frank.

Despite the ethics committee report recommending a reprimand for Frank, Rep. William Dannemeyer introduced a resolution to expel Frank. With Dannemeyer's resolution failing, Rep. Newt Gingrich shows up at the end of the debate to offer a motion to recommit with instructions to censure Rep. Frank instead of reprimand.

I would expect some activity like this to occur during the debate over a censure of Rep. Charlie Rangel. A Republican may offer a resolution to expel instead of censure and, more likely, a Democrat, likely a member of the Congressional Black Caucus, will offer a resolution or a motion to recommit to reprimand Rep. Rangel instead of censuring him.

Facing tough election, House Democrats contribute to build firewall

House Democrats have contributed nearly $40 million to the congressional campaign committee tasked with protecting the party's majority in the midterm elections in November, according to data obtained from TransparencyData.com.

The contributions from 166 members of the 253 members of the House Democratic Caucus account for 37 percent of the contributions made to the Democratic Congressional Campaign Committee (DCCC). These contributions could help to build a well-funded defensive line against the insurgent Republicans.

The DCCC has raised over $100 million this election cycle and has nearly $40 million in cash on hand, but has only spent $7 million so far on independent expenditures to protect their majority. According to a report by the Sunlight Foundation's Reporting Group, the National Republican Congressional Committee (NRCC) has spent nearly double that of the DCCC so far this cycle.

Majority Leader Steny Hoyer contributed the most of any member of the caucus sending $2.35 million from his campaign committee and political action committee (PAC) to the DCCC. Speaker Nancy Pelosi has sent the second most money to the DCCC with a total of $2.225 million. The third-ranking Democrat, Majority Whip Jim Clyburn, is also the third-ranking giver to the DCCC with contributions totaling $2.2 million.

One hundred and eight Democrats have contributed over $100,000 to the DCCC. The biggest givers include the party leadership and major committee chairmen including Reps. Henry Waxman ($800,000), George Miller ($765,000) and Barney Frank ($600,000).

Perhaps an admission of the treacherous electoral climate ninety-seven members have not given any money to the DCCC. Nearly all Republican House members have contributed to the NRCC.

Many of these members are freshmen or sophomores elected in the 2006 and 2008 Democratic waves and are now facing a tough path to reelection. These Democrats are relying on the contributions to the DCCC by their fellow caucus members.

Some of the non-contributors will be facing little competition in November yet still have not sent campaign cash to help their party. In fact, twenty Democrats listed as not yet contributing to the DCCC are currently in races rated as "Solid Democratic" by the Cook Political Report.

Reps. Zoe Lofgren, Jesse Jackson, Jr., Maxine Waters, Dan Lipinski, Carolyn McCarthy, Pete Stark, Luis Gutierrez and Corrine Brown are among those who are facing little to no opposition and have not contributed to their party's campaign committee as of the last filing period. Some of these members are sitting on cash on hand piles of at least half-a-million dollars.

The contributions to the DCCC and the lack of contributions by some members produce a dynamic that highlights some of the Democratic Party's internal ideological divisions. Many of the non-contributing members are Democrats from the moderate-to-conservative wing of the party. These are also the same members who are facing difficult reelections.

Those contributing to the party committee are more representative of the party's liberal wing including many members of the Congressional Progressive Caucus. While fifty-three of eighty-two Progressive Caucus members contributed to the committee, only seventeen out of fifty-four members of the conservative Blue Dog Coalition did as well.

Over the past two years, Progressive Caucus members have voiced concerns about deals crafted to win the votes of Blue Dog Democrats and other moderate and conservative Democrats. The make-up of the caucus after November 2 could likely determine the party's ideological temperament heading into the 2012 presidential cycle.

Feature photo credit: Dominic Alves

Revolving Door Staffer Rebuked, Permanently Banned From Talking to Committee Staff

Earlier this week, Peter Roberson, a top staffer on the House Financial Services Committee, jumped ship to lobby for Intercontinental Exchange, Inc., the owner of the largest credit-default swap house. Today, Financial Services Committee Chair Barney Frank issued a statement banning committee staff from talking to Roberson about financial regulation or financial matters until Frank is no longer chairman.

Roberson previously worked as a lobbyist for the financial services industry. From 2000 to 2006, Roberson worked for the Bond Market Association. In 2006, Roberson joined the Financial Services Committee as a senior advisor and worked as part of a team to draft rules in the financial reform bill to cover over-the-counter derivatives and credit-default swaps. Ryam Grim reported that the part of the bill that Roberson worked on "has been criticized as one of the weakest elements of the package. Since its passage, Frank has said that he would be pleased if the Senate is able to pass tighter derivatives regulation."

Roberson is one of the worst examples of the revolving door between government and the lobbying world. Both require expertise and those with that expertise can move in and out of either world to increase their market potential. Roberson began as a financial services lobbyist, went into Congress to write rules governing financial services companies and then left Congress to help a financial services company navigate and circumvent the very rules he helped write. There are fewer more striking examples of corruption than Roberson's spin through the revolving door.

Top Financial Services Committee Members Rely Heavily On Finance Campaign Contributions

One year after the biggest economic collapse since the Great Depression, Congress is still debating new financial regulations to protect consumers and prevent risk-taking in the financial sector. The House Committee on Financial Services is currently undertaking the important first step of writing, amending and voting on some of the pieces of the long-proposed financial regulatory reform. While debating these issues top committee members have been the recipients of disproportionate campaign contributions from the very industry that they are tasked with regulating.

Twenty-seven committee members have so far received over one-quarter of their contributions from the finance, insurance and real estate (FIRE) sector. This includes Chair Barney Frank, Ranking Member Spencer Bachus, four subcommittee chairs and four subcommittee ranking members. Of the twenty-seven, twelve committee members received over 35% of their contributions in 2009 from the FIRE sector. All contribution data was collected from the Center for Responsive Politics' OpenSecrets.org.

Ranking Member Bachus, a crucial decision maker on the committee, received 71% of his campaign contributions from the finance, insurance and real estate (FIRE) sector so far this year. (These numbers run from January 1-June 30.) For his career, the Alabama congressman receives 45% of his contributions from the FIRE sector. Bachus leads the committee in his reliance on FIRE sector campaign contributions. Bachus has taking a position in opposition to most of the regulatory reforms. Bachus recently stated in a hearing, "this is absolutely the wrong time to be creating a new government agency empowered not only to ration credit, but to design the financial products offered to consumers."

Top Recipients of FIRE Campaign Contributions by % (2009)
Name Party FIRE Contributions Total Contributions Percentage
Spencer Bachus R $161,200 $226,930 71.04%
Kenny Marchant R $25,000 $46,043 54.30%
Paul Kanjorski D $215,200 $397,215 54.18%
Greg Meeks D $114,900 $218,340 52.62%
Mike Castle R $104,000 $200,027 51.99%
Dennis Moore D $139,097 $275,480 50.49%
Mel Watt D $23,000 $50,696 45.37%
Melissa Bean D $269,800 $634,535 42.52%
Ed Royce R $200,635 $504,418 39.78%
Randy Neugebauer R $146,810 $384,205 38.21%
Jeb Hensarling R $140,660 $371,731 37.84%
Nydia Velazquez D $58,100 $164,750 35.27%
View the bar chart
Pennsylvania Rep. Paul Kanjorski is the Chair of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and is tasked with crafting many of the initial bills for the proposed financial regulatory reform. While undertaking this important work Kanjorski has had enough time to raise large sums for his reelection. Of the $397,215 that Kanjorski has raised in 2009, 54% of it comes from the FIRE sector. For his career, Kanjorski received 44% of his contributions from the FIRE sector. Of all Financial Services Committee members, only Kanjorski and Bachus receive over 40% of their career campaign contributions from the FIRE sector.

Kanjorski has stated that he will be watchful of the influence the finance and insurance companies hold in the committee, “"We must ensure that special interests do not weaken particular solutions to the point of becoming toothless.” Earlier this year, however, Kanjorski held a fundraiser that was thrown by lobbyists for financial services organizations. Kanjorski refused to release a list of attendees to the fundraiser.

Recently, Kanjorski has introduced a series of bills to reform the regulatory structure for the SEC, hedge funds and insurance. Many trade groups and companies that have donated to Kanjorski and other committee members are organizing to oppose large sections of the bills.

The industry has already had successes this year. Committee consideration of a bill to create a proposed Consumer Financial Protection Agency was delayed after industry trade groups sent a letter to the committee demanding they delay consideration. The bill was later changed to be narrower in focus than the original language.

A Bloomberg report also notes that the derivatives lobby, headed by large banks JPMorganChase, Goldman Sachs and Credit Suisse, worked the New Democrats, including Rep. Melissa Bean, to get changes made to a bill aimed at filling holes in derivative regulation. Officials in the Obama administration stated that the resulting bill, released as a discussion draft, "created too many loopholes and had the potential to exclude all hedge funds and corporate end-users from oversight." Bean received 42% of her $634,535 in campaign contributions in 2009 from the FIRE sector.

While top committee committee members are seeing the FIRE sector make it rain on their campaign committees, a number of less senior members are pulling in more modest sums. Thirty-five committee members receive 20% or less of their 2009 contributions from the FIRE sector. Ten of these thirty-five members received 12% or less from the FIRE sector so far in 2009, half of the 24% committee average.

These bottom twelve include Rep. Maxine Waters, who has received no money from the sector, and Rep. Ron Paul who has pulled in only $1,000 or 3% of his 2009 campaign haul. The other members in the bottom ten are Reps. Steve Driehaus (8%), Keith Ellison (8%), Mary Jo Kilroy (8%), Frank Lucas (9%), Carolyn McCarthy (11%), Alan Grayson (12%), Adam Putnam (12%) and Al Green (12%).

All campaign contribution data is courtesy of the Center for Responsive Politics (OpenSecrets.org) A CSV of the research is available. Feel free to use it, but please cite Sunlight and CRP/OpenSecrets.

Rep. Frank Extends Communication Ban on Former Staffer Turned Lobbyist

Michael Paese used to be the chief of staff to Finance Committee Chair Barney Frank until he took a job as a chief lobbyist for Goldman Sachs last September. Congressional ethics laws forbid former staffers from contacting the office or committee of their previous employment for one year. Paese's year was about to be up, just in time for him to lobby his former employer and coworkers as they took up work on an extensive financial regulation package. Frank, however, took the rare step of prohibiting Paese from communicating with any staff of the committee for an undetermined amount of time to avoid any appearance of a conflict of interest.

This continues a trend in Washington where decision makers understand where the the lines of a conflict of interest could be crossed. The White House has instituted new lobbying policies for both the TARP and stimulus funding (with many loopholes, as Daniel Schuman has pointed out). A former lobbyist turned chief of staff to Rep. Jim Matheson turned down an invitation to a lobbyist thrown party. And now, Frank has refused to allow his staff to talk to one of Goldman Sachs' prime hires.

This could point towards a moment where Congress could enact further lobbying reforms to strengthen those passed in the 2007 ethics bill. More transparency should be shed on the meetings between lawmakers, staff and lobbyists. Simple disclosure of names and clients simply serves to provide a listing for lawmakers to know who they are talking to and does little to provide real information to the public.

Two Democrats Seek Public Financing of Elections:

Senators Dick Durbin (D-IL) and Chris Dodd (D-CT) stated that they will push for the public financing of elections in the wake of congressional bribery and lobbying scandals, according to The Hill newspaper. In the House, David Obey (D-WI) and Barney Frank (D-MA) have introduced a bill to allow for the public financing of elections by creating a national campaign fund, funded voluntarily by taxpayers and a tax of one-tenth of one percent of all corporate profits over $10 million. Durbin and Dodd have not suggested what their proposal would look like but have expressed concern that lobbying reform proposals will not fix the source of the corruption, which is the need to fundraise due to the high cost of running elections.

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