Massie Ritsch, communications director for the Center for Responsive Politics, has written a great post about the last time Congress took a serious look at how to regulate the financial industry. To paraphrase:
In 1999, as a result of that debate, Congress removed Depression-era restrictions on banks from growing too big and taking unwarranted risks. CRP’s analysis shows how campaign contributions from financial institutions almost assuredly influenced the votes of members of Congress…Many of whom are the same politicians now trying desperately to save the financial sector from a meltdown not seen since the 1930s. During the debate nine years ago, the financial sector gave twice as much cash to those members who voted for the Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act after its lead sponsors, than they did to those who opposed the bill, according to CRP. Until the shocking events of the past couple weeks, it was assumed that these financial institutions were “too big to fail.” But it was the 1999 legislation that freed them from federal regulations, allowing them to grow so large and to take on such risks.
Congress’ vote margin on Gramm-Leach-Bliley was not close, with 450 of the members of both chambers voting for it and only 64 voting against. The measure had bipartisan support. And small wonder…Financial sector interests gave more than $86 billion to members of Congress in the three-year run up to the November 1999 vote on the bill. Those members who supported the bill received about $180,000 in cash on average from financial sources over those three years. Those members who opposed the bill received about half that amount on average.
There was little difference in the money collected by Republicans who supported the bill and those who opposed it; the 255 GOP supporters collected an average of $179,175, while the opponents in their ranks-and there were only five of them-collected $171,890. On the Democratic side, however, there was a wide gulf, as the graph indicates. The 195 Democrats who supported the Financial Services Modernization Act had received an average of $179,920 in the two years and 10 months leading up to its passage, while the 59 Democrats who opposed it received just $83,475.
Nine years ago, lobbyists for the financial sector succeeded at enticing Congress to do the bidding of their financial clients resulting in exposing the American taxpayer to huge risk. Those same lobbies are now feverishly working many of the same politicians to cover their clients’ collective tails and handing the astronomical bill to each of us. “Whether campaign contributions will again correlate to congressional votes remains to be seen,” Massie writes. I would wager that there is unlikely to be much speculation on that question.
Be sure to check out CRP’s charts that accompany the post including one that lists the financial sector contributions to Congress since 1989. And look at Bill Allison’s work that looks at career totals of current lawmakers from the securities sector