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.

On March 16, the House Financial Services Subcommittee on Capital Markets & Government Sponsored Enterprises held a hearing to discuss five pieces of legislation proposed by committee freshmen to increase investment and roll back aspects of the Dodd-Frank financial reform law enacted in 2010. This effort was part of the “identify and remedy” slow-motion assault on the financial reform law proposed by Financial Services Committee Chairman Spencer Bachus, R-Ala.

While Republicans have begun identifying Dodd-Frank provisions to repeal, the financial sector has identified committee freshmen as prime recipients for campaign contributions.

A review of first quarter campaign finance filings by Sunlight shows that seven of the ten freshmen Republicans appointed to the House Financial Services Committee have received 40 percent or more of their political action committee (PAC) contributions from the finance, insurance, and real estate sector. Five of these members—Robert Hurt, R-Va., Steve Stivers, R-Ohio, Sean Duffy R-Wis., Francisco Canseco, R-Texas, and Bill Huizenga, R-Mich.—received over 50 percent of their total PAC contributions from the sector their committee oversees.

The sector contributed a total of $592,578 to the ten Republican freshmen on the committee. More than half of that total has come since the Subcommittee hearing in mid-March.

The Financial Services Committee has long been known as a “cash committee,” a hotbed of fundraising for favored freshmen facing expensive sophomore elections. That’s because no sector gives more money to congressional elections than finance.

Since 1998, the finance, insurance, and real estate sector has given nearly $2 billion to federal candidates for office, more than $700 million more than the second biggest contributing sector.

The top financial sector contributors to committee freshmen were New York Life Insurance ($51,000), Pricewaterhouse Coopers ($31,500), the Independent Community Bankers Association ($31,000), the Investment Company Institute ($29,000), and the Mortgage Bankers Association ($25,000).

The freshmen with a disproportionate share of their campaign funds from the sector they are meant to oversee are just following the fundraising strategy employed by Chairman Bachus. No congressman is more reliant on finance sector contributions than Bachus, who has pulled in 84 percent of his PAC contributions from the finance sector and 70 percent of his total contributions during the first three months of 2011.

Under the new Republican majority, the committee has turned into the central force opposing new rules and regulations being written by federal agencies as a part of the Dodd-Frank implementation process. The committee freshmen have been put front-and-center as sponsors of legislation to repeal sections of the financial reform bill.

Rep. Nan Hayworth, R-N.Y., is sponsoring a bill to repeal a Dodd-Frank provision on CEO pay disclosure. A provision requiring certain private equity firm advisers to register with the SEC is the target of a bill by Rep. Robert Hurt, R-Va. Rep. Steve Stivers, R-Ohio, is looking to repeal a controversial provision making credit ratings agencies liable for the ratings they assign. Oversight of the Consumer Financial Protection Bureau’s decisions would increase under a bill pushed by Rep. Sean Duffy, R-Wis. Staten Island Rep. Michael Grimm, R-N.Y., introduced a bill to expand exemptions for commodity traders under the derivatives regulation currently being implemented by the Commodity Futures Trading Commission (CFTC).

Committee freshmen have also signed on as cosponsors to a couple of bills to reign in the Consumer Financial Protection Bureau, a noted target for banks and business groups created by Dodd-Frank. Eight committee freshmen signed on to a bill introduced by Chairman Bachus that would alter the structure of the Consumer Financial Protection Bureau (CFPB) by replacing the appointed director with a five-member commission.

Some of the big finance organizations contributing to committee freshmen are also backing bills that they've sponsored and cosponsored.

The Independent Community Bankers Association backs the Bachus bill to reign in the CFPB. In testimony before the committee a representative of the community bank trade group stated, “would help ensure that the actions of the CFPB are measured, non-partisan and result in balanced, high quality rules and effective consumer protection.” The ICBA PAC contributed $31,000 to committee freshmen in the first quarter.

The bill is also supported by the American Bankers Association, which gave $14,000 to committee freshmen. A representative for the Bankers Association also testified before the committee to explain their support for this measure, “The resulting practically boundless grant of agency discretion is exacerbated by giving the head of the Bureau sole authority to make decisions that could fundamentally alter the financial choices available to customers.”

Meanwhile, the American Benefits Council, a trade group for some of the biggest corporations in America, has been lobbying for Rep. Hayworth’s bill to repeal a CEO pay disclosure provision. Many members of the Benefits Council are contributors to the committee freshmen including Bank of America, Citigroup, Deloitte, Ernst & Young, the Investment Company Institute, JPMorgan Chase, New York Life Insurance, Pricewaterhouse Coopers, and Wells Fargo.

Another bill, cosponsored by freshmen Reps. Francisco Canseco, R-Texas, and James Renacci, R-Ohio, is at the center of one of the biggest lobbying battles of 2011. The Consumer Payments System Protection Act would delay the implementation of a Federal Reserve rule that would limit the amount that banks can charge retailers for every swipe of a debit card. These fees, known as interchange fees, account for billions in business for banks. The bill is supported by contributors to committee freshmen including the ICBA, the ABA, the Credit Union National Association, JPMorgan Chase, Bank of America, Citigroup, MasterCard, and Visa.

Last year House Financial Services Committee Chairman Spencer Bachus, R-Ala., stated his philosophy on how the relationship between Washington and Wall Street should proceed, "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks." According to first quarter campaign contribution filings due today the financial sector generously supports Chairman Bachus' philosophy.

Bachus raised over seventy percent of his total first quarter campaign contributions from the finance, insurance, and real estate sector (FIRE). This totaled $212,335 out of Bachus' haul of $299,439.

The majority of this money, $122,506, came from FIRE sector political action committees. This accounted for eighty-four percent of the total political action committee contributions Bachus received. Another $89,835--fifty-eight percent of all individual contributions to Bachus--was contributed by individuals who work in the FIRE sector.

Bachus is leading the charge against the implementation of a host of rules mandated by the Dodd-Frank law passed last year including those governing derivatives, consumer protection, and debit swipe fees. At the end of last year, Bachus stated that he would go "page by page . . . to identify job-killing provisions or lending-killing provisions."

A previous Sunlight Foundation study found that Bachus was the most reliant on contributions from the FIRE sector in 2010 having raised sixty-three percent of all contributions from the sector.

Political action committees contributing to Bachus this year include big banks, credit unions, real estate companies, and electronic payment networks. Below is a full list of FIRE PACs giving to Bachus and the dates of their contributions:

Promontory Financial Group announced yesterday the hiring of Amy Friend, the former chief counsel on the Senate Banking Committee. Friend will work as Promontory's managing director and will help Promontory clients with issues including "risk management, governance, and the regulatory implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010."

Promontory was most recently registered to lobby in 2009 when it's CEO, Eugene Levy, was signed up to lobby for GMAC, the banking arm of General Motors.

Friend brings with her three years of experience on the Senate Banking Committee, tens years of experience at the Office of the Comptroller of the Currency, and ten years in the House of Representatives as a staffer to various finance relevant committees.

Promontory's web site promotes the location of their offices as being in close proximity to all financial regulators, however, they are not currently registered to lobby. The firm is likely part of the "invisible lobby" of powerful figures and former government officials who have found ways to use their relationships with government bodies and officials while skirting lobbying disclosure requirements.

Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, recently penned an op-ed in the New York Times questioning how the biggest financial firms that survived the financial crisis had grown 20 percent larger than they were prior. How could Washington, in its financial reforms, allow too big to fail to continue?

Hoenig answered this himself:

How is it possible that post-crisis legislation leaves large financial institutions still in control of our country’s economic destiny? One answer is that they have even greater political influence than they had before the crisis. During the past decade, the four largest financial firms spent tens of millions of dollars on lobbying. A member of Congress from the Midwest reluctantly confirmed for me that any candidate who runs for national office must go to New York City, home of the big banks, to raise money.

There is no bigger contributor to political campaigns than the financial sector. Since 1999 the financial sector has contributed more than $1.8 billion to federal candidates for election. As Hoenig notes, much of that sector is located in New York City.

Overall, over the past six election cycles, New York state residents employed in the finance, insurance and real estate sector have sent more than $50 million to congressional candidates running for office in a state other than New York, according to data from the Center for Responsive Politics. This is a crucial source of money for congressional candidates, particularly those in high-cost Senate races. (The animated map linked in the image below shows where those contributions went over time.)

Out of state Democrats accounted for over half of the money contributed by individuals in the New York State financial sector. Democrats received over $30 million to the slightly more than $16 million received by Republicans. The Independent candidacy of Connecticut Sen. Joe Lieberman pulled in more than $11 million.

The Sunlight Foundation's Party Time database of political fundraisers shows a total of 37 fundraisers held in New York City for congressmen and senators who do not represent New York State. (These numbers are incomplete and the number of fundraisers is almost certainly higher.)

There are 12 fundraisers listed in 2010, including a recent one for Rep. Charlie Dent (R-PA). In October Rep.-elect Mike Fizpatrick (R-PA) held a fundraiser with incoming Financial Services Committee chairman Spencer Bachus (R-AL). (Bachus raised nearly 63% of his 2010 contributions from the finance sector.) Other fundraisers are for lawmakers from California, Oklahoma, Kentucky and various other states spanning the country. (View all 37 of these Party Time fundraisers here.)

Hoenig's example of fundraising in New York is just one anecdote in the larger story of the financial sector's influence in Washington. Since the 1998 election cycle the finance sector has spent nearly $2 billion on campaign contributions to federal political candidates. Over the same period of time the sector has spent more than $4.2 billion on lobbying in Washington.

This leads to a total of more than $6.2 billion spent by the finance sector over a thirteen year period to influence outcomes in Washington. The finance sector has spent almost $1 billion more than any other economic sector on federal campaign contributions and lobbying combined. (The motion chart on the right shows the accumulation of contributions and lobbying over time. The green dot is the finance, insurance and real estate sector.)

Former IMF economist Simon Johnson in an article for The Atlantic last year explained that Wall Street "gained political power by amassing a kind of cultural capital--a belief system." People in Washington believed that those in Wall Street knew what they were doing and believed that the accumulation of wealth in the financial sector was a national good, Johnson argues.

That belief system was aided by the $6.2 billion investment that Wall Street made in Washington. The sector invested in staffing agencies and congressional committees and in financing the increasingly costly campaigns. Those investments were then cashed out as staffers and lawmakers flocked to lobbying firms and cushy Wall Street gigs.

The New York Times wrote in April that “more than 125 former Congressional aides and lawmakers are now working for financial firms as part of a multibillion-dollar effort to shape, and often scale back, federal regulatory power, data shows.” These included former Rep. Michael Oxley, the most recent former chairman of the Financial Services Committee, and former Rep. Richard Baker, who previously chaired the Financial Services Subcommittee on Capital Markets.

Other powerful former lawmakers recently registered to lobby for the financial sector include Senate Majority Leaders Trent Lott and Bob Dole, House Majority Leaders Dick Gephardt and Dick Armey and Speaker of the House Dennis Hastert.

The particular target of Hoenig's ire in his above quoted NYT op-ed is the 1999 passage of the Gramm-Leach-Bliley Act, which tore down the wall between investment and commercial banking. The bill was named after its three main cosponsors: Sen. Phil Gramm, Rep. Jim Leach and Rep. Thomas Bliley. Since retiring from Congress, Gramm went on to become the president of the Swiss bank UBS AG and Bliley works as a registered lobbyist, often for financial interests. (Leach serves under President Obama as the Chairman of the National Endowment for the Humanities.)

Now, recently departed Office of Management and Budget head Peter Orszag is jumping ship to Wall Street. Orszag, following in the footsteps of former Treasury Secretary Bob Rubin, is slated to join Citigroup as a high level executive with a multimillion dollar salary. Recently, President Obama's counsel Greg Craig left the White House and joined Goldman Sachs. It is unclear if either of them will register as a lobbyist.

Even without Orszag and Craig registering to lobby, the industry has more than enough clout. The Center Responsive Politics reports 1,390 former government employees working as lobbyists for the financial sector.

Another prime spot for investment by the financial sector has been the House Financial Services Committee.

The majority party in the House of Representatives often puts favored freshmen and sophomore lawmakers on the House Financial Services Committee, the committee that oversees the financial sector, so that they can raise piles of money from Wall Street.

The Huffington Post's Ryan Grim and Arthur Delaney explained how this worked under the outgoing Democratic majority:

The banking committee is the second-largest in Congress -- the Transportation and Infrastructure Committee has three more members -- and is known as a "money committee" because joining it makes fundraising, especially from donors with financial interests litigated by the panel, significantly easier. The Democratic leadership chose to embrace this concept, setting up the committee as an ATM for vulnerable rookies. Eleven freshman representatives from conservative-leaning districts, designated as "frontline" members, have been given precious spots on the committee. They have individually raised an average of $1.09 million for their 2010 campaigns, according to the Center for Responsive Politics; by contrast, the average House member has raised less than half of that amount.

Meanwhile lawmakers and staffers keep cycling in between the financial sector and Washington. Delaney and Grim showed that, as of the end of 2009, “almost half of the 126 people who [left the Financial Services Committee] registered as lobbyists, mostly for the financial services industry.” Also, “[s]ixteen of the committee's 86 current staffers -- including a good chunk of the senior staff -- worked as lobbyists before coming to the committee.”

The committee will soon be headed by a lawmaker, Rep. Spencer Bachus, who received nearly 63 percent of his campaign and political action committee contributions from the finance sector. Bachus recently stated his philosophy for governing the committee, "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."

The freshmen congressmen appointed to the committee include the largest recipient of finance sector contributions among freshmen and a former bank lobbyist.

Meanwhile, the Senate Banking Committee is set to be chaired by Sen. Tim Johnson, whose state of South Dakota is home to the credit card industry. Johnson recently hired Dwight Fettig, a lobbyist for the American Bankers Association, JPMorgan Chase and Freddie Mac, as a senior adviser. Fettig will likely become the next staff director for the Banking Committee.

The entirety of this enterprise—the doling out of campaign contributions, revolving in between the public and private sector, spending money to influence policy-makers—is entirely legal. That system, however legal it is, is structurally unjust and unsound. As James Fallows notes in a post bemoaning Orszag's revolving door spin, "When we notice similar patterns in other countries -- for instance, how many offspring and in-laws of senior Chinese Communist officials have become very, very rich -- we are quick to draw conclusions about structural injustices."

The intense amount of organized money and human capital has succeeded in making Washington captive to the financial sector. All of this at a low cost when compared to the soaring profits they enjoyed at the height of the boom and the trillions of dollars in aid they received when the bottom fell out.

Ultimately, the $6 billion investment in Washington was the least risky one that the financial sector made over the past twelve years. The firms that survived the storm are bigger than ever and ready to spend billions more to keep their investment afloat.

Securities Exchange Commission (SEC) chairwoman Mary Schapiro received nearly $9 million in compensation and retirement benefits from the Financial Industry Regulatory Authority (FINRA) when she left to head the government regulator.

The total amount of compensation was released in a report and posted on the blog ZeroHedge yesterday. FINRA is a self-regulatory organization (SRO) that was tasked with watchdogging the securities industry. Schapiro was the CEO of FINRA from 1996 to 2009. She oversaw the SRO as Wall Street boomed and busted during that same period.

One chief point of contention for FINRA is what kind of oversight they provided for the criminal hedge fund manager Bernie Madoff. In August, a majority of broker-members of FINRA voted for the organization to release more information related to FINRA's ties to and oversight of Madoff. FINRA subsequently rejected an independent review of its Madoff ties.

SEC officials have met twice with officials from FINRA as the government agency seeks to craft new rules under the Dodd-Frank financial reform law.

Schapiro's financial disclosure document filed upon accepting the nomination to the SEC shows that she received $2.75 million in salary and incentive compensation from FINRA. The disclosure document also shows an additional Defined Benefits Plan that ranges from five to twenty-five million dollars and a 2008 Incentive Compensation that ranges from one to five million dollars. The financial disclosure document is available for viewing here.

Over their careers, the thirty-one congressmen appointed to the conference committee to hash out differences between the House and Senate versions of financial reform received a total of $43.5 million from the finance, insurance and real estate sector (FIRE), according to data obtained from the Center for Responsive Politics.

The conference committee will begin meeting today at 2:15 pm to hash out differences between the two chamber's bills written to reform the financial sector. (The Sunlight Foundation will be covering the conference committee here.) The conference committee is made up of twelve senators and thirty-one members of the House.

Many of the House members appointed to the conference committee are heavily reliant on contributions from the FIRE sector to fund their reelection campaigns. Twelve conferees have received over 20% of their total career contributions from the FIRE sector.

Topping this list is House Financial Services Committee Ranking Member Spencer Bachus, who has received 46% of his career contributions from the FIRE sector. Bachus is also the top recipient among House conferees of total contributions from the FIRE sector with $4.28 million over the course of his career.

Rep. Paul Kanjorksi, the chairman of the Subcommittee on Capital Markets, Insurance and Government-Sponsored Entities, is the second highest recipient of contributions from the FIRE sector and second-most reliant on those contributions among House conferees. Kanjorski has received $3.85 million from the FIRE sector over his career, accounting for 44% of his total career contributions.

The Chairman of the House Financial Services Committee and chief architect of the House version of the bill, Rep. Barney Frank, is also among the top recipients of FIRE contributions and most reliant on their funding. The $3.33 million in FIRE contributions to Frank's campaigns account for 33.6% of his total contributions received over his career.

Other members of the conference committee who received over 20% of their total contributions from the FIRE sector include Reps. Jeb Hensarling (34.6%), Gregory Meeks (33.6%), Judy Biggert (30.3%), Ed Royce (30.2%), Carolyn Maloney (29.63%), Nydia Velazquez (22.8%), Mel Watt (22.6%), Scott Garrett (21%) and Dennis Moore (20.2%).

Nine of the House members appointed to the conference committee received under 10% of their career contributions from the FIRE sector. Two of these lawmakers are chairmen of powerful committees. House Energy & Commerce Committee chairman Henry Waxman received only 5.6% of his career contributions from the FIRE sector and House Judiciary Committee chairman John Conyers received only 4.8% from the FIRE sector.

The others receiving under 10% include Reps. Howard Berman (9.9%), Sam Graves (9%), Darrell Issa (8.6%), Elijah Cummings (8.4%), Joe Barton (8.1%), Leonard Boswell (7.5%), Gary Peters (7.3%) and Mary Jo Kilroy (4.7%).

See below for a full table with FIRE contributions data. Calculations for total career contributions exclude candidate self-financing.

More than two years after the collapse of Bear Stearns presaged the 2008 financial meltdown, the United States Senate is finally ready to begin debate on reforms to the financial regulatory structure that failed to keep the industry in check. While it may have seemed audacious at the outset of 2009, the finance, insurance and real estate sector (FIRE) has continued to pour campaign contributions into the coffers of both Democrats and Republicans in the Senate. From January to December of 2009, the FIRE sector contributed a total of $17.82 million to sitting senators.

With a haul of $12.24 million, Senate Democrats pulled in nearly twice as much money from the FIRE sector as Senate Republicans. The Republicans received $5.58 million from the FIRE sector over the same period of time. All contribution data comes from the Center for Responsive Politics.

The Senate Democrats beat the Republicans in the FIRE money race almost every single month. The only month that the Republicans beat the Democrats was in December, perhaps representing a change in loyalty in the run-up to the financial reform debate.

As you can see from the above graphic and the motion chart below, campaign contributions tend to spike every three months. This is due to the end of each reporting quarter for campaigns coming every three months. Campaigns often try to raise as much money as possible in the final month of a quarter.

The FIRE sector is the most prolific contributor to campaigns over the past 20 years. Since 1989, all candidates for the Senate have received a total of $431 million from the FIRE sector.

(The motion chart below shows 2009 FIRE contributions to sitting senators by month and party. I suggest setting the color to "Unique Color" and the x axis to "Time.")

More graphics below:

Contributions to the parties come from different parts of the country. Senate Democrats received vast amounts more from FIRE sector companies in New York in 2009 than their Republican counterparts. This may be largely due to both New York senators, Chuck Schumer and Kirsten Gillibrand, running election campaigns.

The Republicans and Democrats are almost even in Texas. Republicans lead in the southern states, particularly Georgia. Outside of about ten states, contributions from the FIRE sector are insignificant.

You can see an animated graphic of the state-by-state distribution of FIRE contributions to the parties below:

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.