Rep. Spencer Bachus, R-Ala., under investigation for possible violations of insider trading laws and facing a primary challenge over his close ties to the banking industry, will be seeking campaign help from that industry on Monday.
The Alabama Bankers Association is hosting a breakfast fundraiser at its offices, according to an invitation obtained by Party Time that highlights Bachus' position as the chairman of the Financial Services Committee. This election cycle, Bachus has raised more from the Finance, Insurance and Real Estate sectors than any other House member outside of leadership.
The ten-term congressman rose to become chairman of Financial Services last year after using some of his bounty—more than $400,000 of it—to help the National Republican Congressional Committee, a common practice for lawmakers who want to climb the ranks. Now he faces a March 13 primary challenge from a state senator criticizing him on that very issue. The Campaign for Primary Accountability, a super PAC that is targeting incumbents of both parties, just announced it's going to support Bachus's challenger, Scott Beason, the Birmingham News reported.
Last week the Washington Post reported that Bachus was being probed by the independent Office of Congressional Ethics. The Wall Street Journal first reported in 2010 that Bachus was an active options and stocks trader in 2008. A day after participating in a high-level meeting with then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke as the economy neared a collapse on Sept. 18, 2008, Bachus shorted the market, making a profit of $5,715, the Post found.
Bachus has disproportionally relied on the Finance, Insurance and Real Estate sectors, raising more than any other member of the House from that sector in the 2010 cycle: 62.5 percent, according to a past Sunlight Foundation study. In this cycle, as chairman, he’s garnered 42 percent of his cash from the sector, according to an analysis of Center for Responsive Politics data. But he has become the top recipient of contributions from commercial banks for this year’s election.
In 2010, he told the Birmingham News that, “my view is that Washington and the regulators are there to serve the banks,” later telling the paper that he meant regulators should not micromanage banks. Last year he introduced a bill, backed by many banking associations, that would replace the director of the Consumer Financial Protection Bureau with a five-member commission.
The investigation of Bachus comes as the House and the Senate have passed separate bills that would explicitly make insider trading illegal for lawmakers, and also require them to post any trades publicly within 30 days. The legislation was prompted by a headline-grabbing “60 Minutes” episode in November that reported on the controversial trades of Bachus and other lawmakers. After that broadcast, Bachus and a slew of other lawmakers supported the STOCK Act, which had been introduced last March. Bachus held a hearing on the bill in December.
The OCE has a short window to probe members of Congress, and then makes a recommendation that the official House Committee on Ethics, which has the power to censure lawmakers, further investigate or not.
Bachus has over $1 million in his campaign coffers and has already started running advertisements promoting his conservative credentials. Beason faces hurdles, only filing to begin raising money last month. But Beason is going to get support from the Campaign for Primary Accountability, the super PAC says. The group says it intends to play in congressional districts that are securely Democratic or Republican, USA Today reported, and will do so in order to make those races more competitive. The Bachus district is lopsidedly Republican: President Obama won 22 percent of the vote there in 2008.
The Campaign for Primary Accountability has raised nearly $1.8 million so far and its biggest donors are either donors to conservative causes or to conservative candidates. Despite that, so far it has only disclosed spending on behalf of Rep. Dennis Kucinich, D-Ohio, who faces a primary battle against Rep. Marcy Kaptur, D-Ohio.
Note: 2/17/2012, 10:36 a.m. ET. This post has been corrected from the original to reflect that Bachus's statement about regulating banks was reported by the Birmingham News in 2010, not 2011.