Bloomberg reported yesterday that U.S. based bank Capital One will purchase UK-based HSBC’s U.S. credit card arm for a reported $2.4 billion.

HSBC originally acquired the credit card unit now being sold in its 2003 acquisition of Household International, known primarily as a sub-prime lender.

Both HSBC and Capital One do business in the the sub-prime market with both loans and credit cards, and both companies took losses in the housing meltdown and financial crisis in 2007 and 2008.

All of these companies spent money in the last ten years to influence policy around banks and lending. Here’s a sample of where their money went:

• Capital One spent $698,013 on campaign contributions in the last election cycle, 72% of which went to Republicans. They spent $3.36 million lobbying many of the bills related to financial regulation in the last session of Congress, including Wall Street reform, the Credit Cardholder’s Bill of Rights, the Consumer Financial Protection Agency Act of 2009, and various bills designed to help homeowners in default.
• In 2007 and 2008 – the early stages of the recent economic crisis – Capital One spent $2.3 million lobbying on  various bills that attempted to regulate sub-prime lending, such as the Expanding Housing Opportunities Through Education and Counseling Act of 2007.
• HSBC North America spent $351,305 on campaign contributions in 2009-10, 54% of which went to Republicans.
• HSBC Holdings, the parent company of HSBC North America, spent $6.5 million on lobbying in 2009-10. The financial company lobbied many of the same bills as Capitol One as well as other bills effecting consumer banking, such as the Consumer Overdraft Protection Fair Practices Act.
• Household International, prior to its acquisition by HSBC in 2003, made $1.48 million in campaign contributions and spent $3.5 million on lobbying. Lobbyist disclosures that show Household International as a client don’t mention any specific bills, but list bankruptcy as one of their main legislative concerns.

‘Influence Explored’ takes an article from the day’s headlines and exposes the influential ways of entities mentioned in the article. Names and corporations are run through Sunlight’s influence tracking tools such as Influence Explorer and Transparency Data to remind readers of the money that powers Washington.

Last week Sen. Tim Johnson, the incoming chairman of the Senate Banking Committee, hired Dwight Fettig, a lobbyist with numerous financial sector clients, as a "senior adviser" and it is rumored that he will become the committee's staff director. Fettig, who is a partner at Porterfield, Lowenthal & Fettig, previously worked for Johnson as a legislative director from 1996-2003.

Fettig's most recent clients include financial heavy hitters such as the American Bankers Association, JPMorgan Chase and the National Association of Mortgage Bankers.

Prior to joining up with Porterfield and Lowenthal, both of whom are former Senate Banking Committee staffers turned lobbyists, Fettig was the chief lobbyist for Freddie Mac.

It is no surprise that Sen. Johnson would hire a financial industry lobbyist to head the Banking Committee. Johnson has long been one of the most friendly Democrats to the financial industry. This largely stems from his home state of South Dakota being the home of the credit card industry.

From 2005-2010 Johnson's campaign and political action committees raised a combined $1,763,325 from the finance, insurance and real estate sector, according to the Center for Responsive Politics. That accounted for approximately one-quarter of all contributions made to Johnson during that time.

Johnson's political action committee, South Dakota First, which doles out money to Senate candidates, is almost entirely dependent on financial sector money. South Dakota First raised 75 percent of its contributions from the finance sector in 2009-2010, according to data collected from TransparencyData.com.

When the Senate considered a bill to reign in credit card abuses last year Johnson was the only Democrat to oppose it. In a 2009 blog post Open Congress' Donny Shaw looked at Johnson's voting history on credit card issues.

While Fettig is rejoining Johnson in the Senate another former Johnson staffer will remain in the private sector as a lobbyist. Naomi Camper left Johnson's office in 2005 to become co-head of Federal Government Relations at JPMorgan Chase, one the biggest banks in the United States.

The Sunlight Foundation is proud to announce our Checking Influence tool that gives individuals the power to see the political expenditures of the businesses you frequent. The simple bookmarklet allows users to connect personal spending habits seen on your online bank or credit card statement with the lobbying and political contributions of companies.

As we start to examine how much we spent on Black Friday or Cyber Monday, Checking Influence will let all of us see how effortlessly politics escapes Washington and settles its way into our wallets; often without us even knowing it. We created this tool to help Americans be more informed consumers and citizens. Just as some consumers check to see if their coffee is free trade or if their clothing is manufactured in sweatshops, they can now know if their purchases help fund lobbying campaigns. We’re trying to answer the question: When you buy coffee at Starbucks; refill a prescription at Walgreens; or download a song from iTunes, do you know where your money really goes?

How to Use Checking Influence

Using Checking Influence is simple and secure. First, add the Checking Influence bookmarklet to your browser’s toolbar. Next, go to any web page that shows your spending transactions, such as a banking site, your credit card statement or Mint.com. Then, just click on the Checking Influence bookmarklet, and it will find the company names on the transactions list and show you the “influence data” for the corporations it can identify -- including political campaign contributions and what lobbying the corporation conducted.

Behind the Curtain

The backbone of Checking Influence is TransparencyData.com, Sunlight’s open-source, central repository for federal lobbyist registrations, federal grant and federal and state campaign contributions. Sunlight Labs, the Foundation's in-house team that builds technology and Internet tools to make government more transparent and accountable, developed Checking Influence. The site is built upon the public Transparency Data API, whose data is provided by the Center for Responsive Politics and the National Institute for Money in State Politics.

A Note About Security

We understand that everyone is cautious about banking information online (and rightfully so!), which is why the Sunlight Foundation has taken a number of steps to ensure that Checking Influence is safe to use. Checking Influence uses the same industry-standard SSL encryption that your banking site does to keep your financial information secure and we don't save any personally identifiable information. The tool is simply searching bank statements for transactions with company names that match information from TransparencyData.com.

Please contact us with any feedback and we hope you enjoy playing around with this new tool!

Note: I wrote this over the summer when the possibility existed that Sen. Chris Dodd would be moving from the Banking Committee to the Health, Education, Labor and Pensions Committee. With Dodd's retirement announcement, I figured it would be useful to revisit. I have removed some of the introductory text as it is now irrelevant, but can be viewed at the original posting here.

Sen. Tim Johnson of South Dakota is next in line to replace Sen. Dodd and has similarly close ties to the financial sector.

According to Open Secrets from 2003-2008, Sen. Johnson has pulled in $1,407,958 from the finance, insurance and real estate sector. While this pales in comparison to Sen. Dodd's $9,097,107 over the same period of time, it accounts for 20% of the South Dakota senator's campaign haul. Sen. Johnson's finance contributions are aided by the importance of South Dakota to the finance and credit industries. These companies only need to abide by the regulations of the state within which they are incorporated and South Dakota has some of loosest regulations for bank holding and credit card companies. This has led to a large number of credit and banks companies locating in the small plains state, providing for tens of thousands of jobs.

The support Sen. Johnson receives from the industry, and their importance to his state, is reflected in the senator's recent voting record. Donny Shaw at Open Congress (Friend of Sunlight) looked at Sen. Johnson's recent votes and showed that he stands out among Democrats in his support for the credit card industry. The senator was the only Democrat to oppose a recent law, sponsored by Sen. Dodd, to "restrict unfair credit card rate increases, penalties and fees, and bans deceptive and predatory practices." He was also one of a handful of Democrats to oppose a series of amendments meant to impose tougher regulations on credit card companies.

Sen. Johnson isn't just connected to the finance sector through his campaign contributions and his votes, but also by his former staffers turned lobbyists. Two of Sen. Johnson's former staffers currently work for firms representing financial clients or companies in the financial world. In 2005, Naomi Camper left her position as staff director for Sen. Johnson on the Senate Financial Institutions Subcommittee to become co-head of Federal Government Relations at JPMorgan Chase, one the biggest banks in the United States. Dwight Fettig, a former staff director of Sen. Johnson, became a partner in the almost exclusively finance-related lobbying shop, Porterfield, Lowenthal & Fettig. Clients at Fettig's firm include the American Bankers Association, the Coalition of Private Investment Companies, NASDAQ and the National Association of Mortgage Brokers.

These connections and contributions should be of concern to anyone who is already alarmed by the relationship that Sen. Dodd has with the financial sector. As the government continues to determine it's role in the financial sector, through bailouts and Federal Reserve lending, it may be better to reserve committee chairs for those without the conflicts that Sen. Johnson may bring with him.

The idea that overt political influence by large organizations like the banking industry, and the larger financial services industry, has, and is, blocking serious action in the legislative branch and executive agencies is spreading. As is the solution: more transparency. Here's Bloomberg columnist Michael Sesit:

Finance companies -- commercial and investment banks, insurers, investment-management companies, private-equity firms and hedge funds -- have spent fortunes on lobbying efforts and campaign contributions, purchasing access, good will and clout.

The result has often been slack regulation and poor discipline to the detriment of the public, markets and, as has recently been shown, the institutions themselves. Look at how lawmakers barred the Commodity Futures Trading Commission from regulating derivatives.

...

Just restricting the amount of money spent on elections won’t solve the problem of influence-peddling. But it would help to create a fairer system.

The pervasive role of lobbyists also needs to be curtailed. What’s needed is much more transparency in their activities. For ethics restrictions to work, “there must be an open, publicly accessible reporting system where every executive-branch appointee records meetings with registered lobbyists during and after working hours, both inside and outside the office,” former U.S. attorney Whitney North Seymour Jr., wrote last month in a letter to the New York Times.

Spot on. Even go a step further and have the same rules apply to senators, congressmen, their staffs and Congressional- committee staffs.

The message is clear: The U.S. government isn’t for sale.

(Emphasis added.) Amen to that.

The complete meltdown in subprime mortgages has caused a total makeover of the investment industry. The effect of the makeover on Wall Street will trickle down to Washington, with diminished campaign contributions, lobbyists out of work, and new bills and regulations to wrangle over.

First came the government takeover of Fannie Mae and Freddie Mac. The home loan giants were two of the biggest names in the Washington influence game over the past decade. The two organizations spent a combined $200 million on lobbying over the last ten years and, since 1990, have contributed $19.5 million to political campaigns. It is no wonder that Fannie and Freddie avoided the crucial scrutiny that they needed over the last ten years. And now, Fannie and Freddie's lobbying shops are shuttered, their political contributions are cut off, and they will no longer throw extravagant fetes for lawmakers and cabinet secretaries.

Yesterday's collapse of Lehman Brothers, the Bank of America takeover of Merrill Lynch, and today's AIG firesale, will cause similar aftershocks in Washington. Since 1989, these companies have contributed millions to federal candidates for election:

Merrill Lynch - $14.7 million

Lehman Brothers - $9.2 million

AIG - $9.7 million

The fall-off in campaign contributions from these companies will likely spread to the entire securities and investment industry. The Wall Street Journal points out that during the 2008 election cycle securities and investment contributions are the 2nd largest source of money for Democratic candidates and the 3rd largest source for Republicans. Already those contributions have slowed over the summer months preceding this crisis.

Lobbying spending is likely to shift, but probably not drop-off. Since 1998, Merrill Lynch spent $39.3 million on lobbying in Washington. That account will likely be wiped out for now, as Bank of America takes over for them. Lehman Brothers, which was denied help during their collapse, is a smaller player in Washington with $6.3 million in lobbying expenses since 1998. The events of the past few days have completely wiped out the lobbying enterprises of two companies that spent over $45 million over the decade.

The securities and investment industry is one of the biggest spenders on lobbying Washington. Since 1998, this industry has pumped $551 million into influencing decision makers in Washington. Over the past two years, 2007-2008, the industry spent over $132 million on lobbying.

With the raft of new legislation and regulations about to break through like storm surge over New Orleans levees, the industry, despite its massive financial problems, can't afford to cut their lobbying expenses. Some lobbyists may wind up out of a job, but there will always be new ones to take their place.

(All totals calculated from data available at OpenSecrets.org.)

Earlier this month, The Washington Post reported how targets of a Senate investigation have showered Washington with campaign contributions, in an apparent attempt to buy some love and avoid sanctions. In July, the Senate Permanent Subcommittee on Investigations issued a report alleging that two European-based banks, USB of Switzerland and LGT of Liechtenstein, served as tax havens for wealthy Americans, costing the federal treasury up to $100 billion a year.

The Post article states that officials with the banks have given more than $2 million this year, $98,000 in June alone, to congressional and presidential campaigns. USB spends close to $1 million a year on lobbying and is traditionally a big campaign giver. But so far this cycle the Swiss bank's contributions have surpassed what it gave in the whole 2006 election cycle. The Post quotes a bank spokesperson as saying the bank's giving is in no way related to the Senate investigation. The article didn't say, however, whether it was said with a straight face.