The Federal Reserve released a series of key data sets today as required under the Dodd-Frank financial reform law. The data sets show all of the emergency lending programs that the Fed undertook beginning in 2007 as financial firms found themselves awash in toxic assets and unable to borrow or lend money.

All of these data sets are available for download on the Federal Reserve site in both Excel and .csv formats.

Ryan Sibley explained some of what we may find in a blog post yesterday:

If it’s fulfilled as the Dodd-Frank bill requires, we’ll know which banks had to use the secondary credit window, also known as the discount window, which was reserved for banks in poorer health. Information about TALF loans will show us which banks took advantage of federally guaranteed loans as an incentive to buy “toxic assets” and which banks were able to get rid of their bad assets as a result of the program. We’ll also find out which banks the Fed was nice enough to buy so many risky mortgage-backed securities from.

Some of these data sets are likely to hold more interesting revelations than others. Like the cables released by Wikileaks, there are bound to be a number of revelations that are more detailed confirmations of what we already know.

We'll have more on the other data sets in the coming days.

Earlier this month, the Inspector General responsible for overseeing the government's bailout of the financial sector released an audit of the Treasury Department and federal banking agencies that raised the specter of “external parties” – such as financial institutions – having “undue influence” over the bailout process. In short, the IG concluded that because the Treasury Department and other banking agencies insufficiently document oral communications between external parties and the federal government, it was “impossible” to determine whether bailout decisions were improperly influenced.

When explaining how to fix this disclosure gap, the Inspector General pointed to rules governing lobbying on the $787 billion economic stimulus funds as a good model for the financial bailout. The IG also noted that the Treasury Department announced on January 27, 2009 that it “would develop new rules to increase transparency and curtail potential lobbyist influence” over the financial industry bailout. And yet, the Treasury Department is still “finalizing” its draft policy 7 months after the press release. (More background available from WSJ and the Washington Times.)

It seems, however, that both the IG and the Treasury Department may not have realized that the model they are using for the financial bailout lobbying rules has itself been updated. They also seem to have forgotten about public disclosure of written communications.

Did Treasury Misunderstand the Lobbying Disclosure Rules?

Mike Stern, former senior counsel for the U.S. House of Representatives, wrote about two peculiarities in the Treasury Department's understanding of the stimulus lobbying rules, as recounted by the IG.

Stern highlights this paragraph from the IG report:

"A Treasury official stated that Treasury’s draft policy for TARP [financial industry bailout] funds is similar to the ARRA [stimulus lobbying] policy. The TARP policy will state that Treasury employees cannot talk to lobbyists or members of the Congress, with one exception—instances of overarching policy discussions.” (emphasis added by Stern)

First, Stern explains that Obama's revised stimulus lobbying rules treat lobbyists and other interested parties similarly with respect to prohibiting certain communications. Yet, the Treasury official's statement on the draft financial bailout lobbying rules does not mention other parties as being included in the ban. Second, the revised stimulus lobbying ban likely does not apply to Members of Congress, and yet the Treasury official's statement states that Treasury employees cannot speak with members of Congress regarding specific projects. (This is probably unconstitutional.)

Even with these problems, the Inspector General embraces the stimulus lobbying guidelines as a model for the financial bailout guidelines. And yet, nowhere does the report mention that the administration has updated and significantly revised its stimulus lobbying guidelines. I wrote about the major revisions earlier.

Based upon Stern's analysis, there are two instances where the IG report failed to note that the Treasury official's statement concerning stimulus lobbying guidelines was no longer operative. Moreover, although the IG report summarized the Treasury Department's interim stimulus lobbying guidelines (which mirror the April 7th stimulus lobbying guidelines promulgated by the OMB), nowhere does the report mention that the stimulus lobbying rules were updated by OMB on July 24th.

Has the Treasury Department failed to update its stimulus lobbying guidelines in accordance with OMB rules? Why weren't OMB's updated stimulus lobbying guidelines summarized in the IG report, even if they haven't yet been adopted by Treasury? Should Treasury use the old or the revised stimulus lobbying guidelines as a model for its financial bailout lobbying guidelines?

What Happened to Disclosing Written Communications About Policy Matters?

There is another problem as well. The original stimulus lobbying rules had a loophole that was closed when they was updated. If Treasury uses the interim Treasury stimulus lobbying disclosure guidelines as a model for its financial bailout disclosure guidelines, and not the revised version promulgated by OMB, it leaves open a tremendous loophole: the absence of public disclosure requirements for written communications by lobbyists (or anyone with financial interests).

The interim OMB rules regarding lobbyists writing to federal employees on policy matters had no public disclosure requirements. The revised OMB rules, however, impose a public disclosure requirement on the writings themselves as well as public disclosure that the communication has taken place.

Specifically, the revised OMB memo tells government employees: "If you receive a written communication from a federally registered lobbyist on behalf of a client or employer concerning Recovery Act policy or projects for funding (including, but not limited to, any written communication from a federally registered lobbyist about a pending application), then please submit that written communication to your designated agency official for posting on the agency’s website within 3 business days of the communication. . . . " (emphasis added)

The IG report, however, explains that "although Treasury and the banking agencies have processes for documenting and responding to written external inquiries, not all have procedures to document oral communications with external parties when discussing TARP funds." (emphasis added) In saying this, the report omits any mention of whether the documents that are received by Treasury should be made public. Implicitly, it implies that this is not required.

And if you look further, the IG report's explanation of the stimulus lobbying guidelines parallels the interim (outdated) OMB guidelines in distinguishing between discrete projects and policy matters. The IG report says that "treasury employees are . . . required to forward written communications from federally registered lobbyists regarding specific projects, applications, or applicants." The interim stimulus guidelines contrast "specific projects, applications, or applicants" with policy matters. The IG report does not mention general policy matters, and implicitly adopts that dichotomy as well. Indeed, it fails to adopt the language of the revised OMB memo requiring publication on a website of policy communications.

As a result, it is unclear whether the IG is recommending that the Treasury Department publicly disclose the written communications on policy matters submitted from lobbyists to federal employees. Further muddying the waters is the statement by the Treasury official, quoted in the IG report, that seems to exempt “instances of overarching policy discussions” from the financial lobbying ban on Treasury employees speaking with “lobbyists or members of the Congress.” The focus of that section of the report is on oral communications, but it could be interpreted to include written communications as well.

In a private email (that I have permission to quote), Stern writes that "As a practical matter, if a lobbyist wants to communicate in writing with Treasury regarding a TARP/ARRA policy matter and for some reason does not want the communication to be disclosed publicly, he or she could just have the letter signed by a non-lobbyist representative (eg, the client’s CEO).” He is right. This is another issue that Treasury should address.

It is a good thing that the IG is pressing the Treasury Department and other banking agencies to be more transparent, particularly as to lobbying that could place taxpayers on the line for billions of dollars. However, there are many additional questions that must be answered by Treasury and the IG -- and soon.

Third quarter lobbying disclosure reports tell the story behind financial services lobbying in the lead up to the Panic of '08 and the ultimate bailout. Jurors now get to decide Sen. Ted Stevens' fate. That and more in today's news round-up:

Two competing articles from The Hill and Congressional Quarterly wind up telling the same story. The Hill's article is titled, "K Street earnings fall." The CQ article's opening sentence states, "K Street emerged from the third quarter of 2008 looking substantially better off than Wall Street." Both are certainly true; I have yet to hear of a lobbying firm being nationalized. The main thrust is that, despite falling lobbying expenses, financial services companies, in particular, can no longer afford to look at lobbying expenses as “discretionary expenses.” While I'm not sure that they ever did - the return on investment in lobbying is usually in the tens of billions for these companies - it is certainly true that lobbying is a lifeline for some companies right now. Lobbying was also a part of what got the financial services and housing industry into this mess, consistently opposing any oversight or regulation that could have prevented the precipitous slide into panic. As lobbying will be so important to these companies in the future, Congress should impose new disclosure requirements on lobbyists, especially those operating for companies receiving bailout bucks. I think something like this would be more than fair.

After a bipolar performance by the Stevens defense and a repetitious pounding from the prosecution during closing statements the jury will finally get to decide whether the Alaska Senator falsely concealed gifts he received when filing his financial disclosure forms. We await their decision. This is how I'm imagining the scene in the jury room right now.

Sunlight's Nancy Watzman takes a look at Sen. Elizabeth Dole's fundraising parties over at Party Time, "The deep connections that Dole enjoys thanks to her extensive GOP pedigree–she served in two cabinet posts and of course is married to former Senator Bob Dole (R-KS)–is evident when you dig into the meat of the invitations."

A month ago, at the advent of the global economic crisis, the federal government loaned the nation's largest insurer, AIG, $120 billion to keep it from collapsing, effectively giving the U.S. taxpayer an 80% equity stake in the company. Questions have been thrown around about whether or not the company will continue its lobbying practice despite being 80% owned by the government. Yesterday, ProPublica reported that AIG will continue to lobby. Today, the Wall Street Journal reports that the lobbying will be aimed at reducing regulations and easing oversight of mortgage lenders:

AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators. The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.

The goal of the new rules is to hold originators accountable if they engage in the sorts of improper or fraudulent lending that ultimately contributed to AIG's downfall. The law was passed by Congress in July as part of a sweeping housing-industry rescue package.

In the second quarter lobbying filings of 2008, AIG spent $3 million, much of that to block these efforts at oversight. Overall, this year AIG spent $6.7 million on lobbying expenses.

It seems absolutely inappropriate for a company kept alive by the federal government to continue to influence lawmakers and executive branch employees, especially as it concerns oversight that appears intended to stop the type of abusive behaviors that led not only to the near collapse of AIG itself, but to the global economic crisis.

Budgeting political risk helped Fannie Mae, Freddie Mac, and financial services companies avoid the kind of scrutiny they needed from Congress for the past several years. Millions of dollars in private travel, campaign contributions, and lobbyists-galore created a border wall that no regulation or reform could climb over. Florida Rep. Tim Mahoney's hole gets deeper as a 2nd affair is revealed, the FBI opens and investigation, and the Democrats ditch him. There's more in this round-up of today's news:

Dave Jamieson at The New Republic looks into the lavish treatment members and staffers of the House Financial Services Committee received from Fannie Mae, Freddie Mac, and financial services companies in the years preceeding the collapse of the industry. Former chairman Mike Oxley, who now works for NASDAQ and as a lobbyist, approved a half-million dollars worth of privately paid travel, much of it offered by financial services companies. Fannie Mae and Freddie Mac had approximately one lobbyist for each member of the 70 person committee. Campaign contributions were spread around like butter on cornbread. Of course, all of this largesse eventually lured numerous staffers and committee members into the private sector and Jamieson names names:

Former Oxley adviser Carter McDowell moved on to the American Bankers Association; Karen Lynch Calton, one-time counsel to the committee, has lobbied for the Consumer Bankers Association; Greg Zerzan, an aide to Oxley, eventually went to the International Swaps and Derivatives Association; Linda Dallas Rich, a committee adviser, headed to the New York Stock Exchange; longtime Oxley aide Clinton Jones hopped to Fannie for a spell, before returning to Congress to serve Bachus on the finance committee; and even though Baker had been a perennial foe to the GSEs, the congressman's own former chief of staff, Duane Duncan, became a star on Fannie's lobbying team.

Rep. Tim Mahoney is in a load more trouble after the Associated Press revealed another affair and ABC News, the team that broke this story, reported that the FBI is investigating the allegations of hush money paid to the first reported mistress. It is alleged that Mahoney hired Patricia Allen, the first reported mistress, to both his campaign and congressional staffs. After things went sour (she discovered he was having another affair) Mahoney fired her and allegedly paid her $121,000 to keep her from filing a wrongful termination lawsuit. Speaker Nancy Pelosi called for an ethics committee investigation (although those haven't really led to anything since, I don't know, the 1990s) and House Democrats effectively abandoned the freshman Florida congressman to fend for himself in a difficult district.

The defense team in Sen. Ted Stevens' trial for filing false statements on his personal financial disclosure forms is attempting to show that the home renovations at the center of the charges were done for VECO's Bill Allen and not for Stevens. Stevens' daughter, Susan Stevens Covich, testified that when she appeared at her father's Girdwood, Alaska home to spend time while visiting Allen was present in numerous other people, often taking up all five available bedrooms leaving her to sleep on the couch. Covich said she stopped staying there after Allen's constant presence became "creepy". Previously, defense attorneys have shown that Stevens spends most of his time living in Washington, DC and not at the home in Girdwood. The judge presiding over the case stated that the case will likely be handed to the jury next week.

An Alternative Minimum Tax (AMT) patch, a mental health parity bill, a package of tax break extensions, and tax breaks and relief for victims of natural disasters, specifically Hurricane Ike. These don't sound like they have any relation to the relief of an financial crisis, but, as of today, they will all play a major role. The new massive bailout package — sorry, "rescue" package — introduced in the Senate includes all of these measures. The inclusion of these measures could help push the underlying Emergency Economic Stabilization Act through Congress or torpedo it by injecting inter-chamber politics into an already tense political situation.

At the heart of the tacked-on legislation is a combination of an AMT patch and tax break extensions for corporations and renewable energy investments. Senate Democrats, most prominently Sen. Max Baucus, believe that the inclusion of these measures will help draw the support of House Republicans who previously voted down Monday's bailout bill. However, this measure is already drawing the ire of House Democrats, including Blue Dogs and Majority Leader Steny Hoyer.

The AMT/tax break extension package was previously passed by the Senate, but House leaders, pushed by Hoyer and the Blue Dogs, intended on shelving the proposal due to its failure to abide by pay-as-you-go rules (providing offsetting cuts to go with revenue reductions). The inclusion of the package in the bailout bill will revive the animus between the two Democratic factions. Hoyer has already stated that the inclusion of the "tax extenders" is "controversial" and was included only because "they thought that’s the only way they could get it passed.” Of course, the Blue Dogs, being prominent supporters of the bailout bill, may find themselves in a situation where this compromise is the best they can get.

Seeing as how every vote counts at this point — the bailout only needs 12 votes to pass in the House — the inclusion of the mental health parity legislation previously passed by the House could help sway one or two votes. The chief Republican cosponsor of the bill, Rep. Jim Ramstad, voted against the bailout bill on Monday. Also, one the bill's seven cosponsors, Rep. Pete Stark, also voted against the bailout. The inclusion of the defining bill of Ramstad's career, as he retires this year, could be enough to sway this one vote into the "yes" column.

In classic congressional fashion, the Senate has decided to use a crisis piece of legislation as a way to push through a massive package of other priorities forcing an inter-chamber factional battle to come to a head. The inclusion of this controversial legislation could also serve as a remedy to the current failure in the House.

Poison pill or appeasing antidote? We'll wait and see.