Top Financial Services Committee Members Rely Heavily On Finance Campaign Contributions

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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.

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  • Musing

    How do we solve the problem, though? What do you think about a Constitutional amendment reserving political free speech for US citizens only? Or, beyond that, for registered voters only?

    This would codify the idea that only US citizens (or voters) would be permitted by law to influence our lawmakers, whether by contributions, ads, or other forms of influence.

  • Thanks a lot for your well written article. But I had trouble navigating around your web site because I kept getting 502 bad gateway error. Just thought to let you know.

  • This is the part of the government that I am taking on, the politicians that think that the people that pay for their elections are the ones that they listen to. I am running against Barney Frank in Massachusetts, what I need is support from average Americans. Check out my website at: http://www.KeithMessina.com, and help change the way we see government. Keep up the good work Sunlight.

  • Daniel Ewald

    Hi,
    I wanted more information about Dylan Ratigan and the nature of his project. I think it may be of interest to me.

  • There a lots of us out here who support helathcare reform and many have been inside the insurance industry for years. (myself over 30) We have seen how they use and abuse agents, insureds and even insurance commissioners, all for the one word that summsrizes them all GREED! The life insurance cos at least care about fairness and open markets and many are Mutual Cos (owned by the policyholders).

    Take a closer look at the financials & actions of these Health Insurance Only Cos, which are all stockholder owned..you will see how they have the largest number of consumer complaints against them at claim time, sale practices are often fined and they buy business where they want by “cherry-picking’ the healthiest segments.

    Yes it’s time for a federal oversight agency to be formed to monitor their market behavior,their price fixing,how they lobby state insurance commissioners, especially those that are elected rather than appointed.

    I hope Dylan Ratigan will reveal the data on these cos so the taxpayer can understand how they actually operate and are out of control. Repeal the anti-trust protection, expand choices and set standards for a level playing field nationally. They did it with Medicare and Medigap insurance, why not for the working class? Maybe Ed Shultz might have something to say about this too!

  • Chewy

    There has to be some way of getting the public at large to galvanize around this subject so that these congress people are held more accountable. They seem to have gotten to a point now where there is just no shame anymore even when they’re confronted by the media. I think Dylan Ratigan did some fairly hard interviews with a few recently but I think the public outrage seems lost by the time it gets to them.

  • As long as Americans allow the international criminal elite bankers to control our lives, our lives will become bleaker and bleaker.

    It is time to reveal the syndicate of the soulless for who and what they are.

    The American people owns the air waves thus there is no need for campaign contributions. Simply require that all broadcasters give air time to candidates for political office.

    Oh wait if that happened then the syndicate of the soulless would lose their position of control and power. And then peace and prosperity would rule the world.

  • What else is new? An (almost) totally bought and paid for Congress (or congressional committee). Why are we surprised or did we forget that at the end of last year, Congress had a 9 percent approval rating? ANYONE who receives more than a token amount of money (e.g., less than $1,500) from an industry on which regulations are being proposed ought to recluse themselves… period. Then, the Congress with serve who they were sworn to serve: the people!

  • John Thacker

    “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%).”

    Note that Reps. Ron Paul, Frank Lucas, and Adam Putnam take positions that are almost entirely the opposite of the others who receive a small amount of money. Perhaps because the industry realizes that they don’t have to pay them to get them to take a position, and their seats are pretty safe?

    Being a moderate is a great way to get lots of cash from both sides. A Member can propose regulation or initially lean towards it but then change his or her mind after one side pays enough protection money.

    • John makes a pretty good point here. Just a couple notes though: Putnam is retiring, so his numbers are way down from previous years; for his career, Paul has raised over $1 million from the FIRE sector, but he’s raised a total of over $50 million. I do find it interesting that Driehaus and Kilroy aren’t raising that much considering that they aren’t in the safest seats in the world.