Today’s New York Times looks into the case of Promontory Financial Group, a self-described “leading strategy, risk management and regulatory compliance consulting firm focusing primarily on the financial services industry.” What’s notable, according to the Times is that:
Nearly two-thirds of its roughly 170 senior executives worked at agencies that oversee the financial industry. The founder, Eugene A. Ludwig, is a former comptroller of the currency and a law school friend of Bill Clinton; the latest hire, Mary L. Schapiro, ran the Securities and Exchange Commission until late last year.
Building off those connections, the Promontory Financial Group has emerged as a major power broker in Washington, helping Wall Street navigate an onslaught of new rules and regulatory scrutiny. Promontory accompanied Morgan Stanley when the bank urged regulators to rethink limits on risky trading, records show. It also joined Bank of America, Citigroup and other big banks at the Treasury Department to discuss plans for dismantling failing financial firms.
Using Sunlight’s Dodd-Frank meeting logs tracker, the Times found ten instances where firm executives met with regulators to discuss “thorny issues like the so-called Volcker Rule that curbs risky trading.”
Continue readingThe bigger the bank, the higher the complaint rate
The bigger the bank, the higher the rate of consumer complaints. That is the general pattern of a new Sunlight Foundation analysis of just-released consumer complaint data from the Consumer Financial Protection Bureau (CFPB).
The relationship is hardly surprising. The biggest banks consistently score the worst on surveys of customer satisfaction. The most recent survey found Bank of America with the lowest customer satisfaction rate. We find Bank of America to have the second highest rate of complaints, trailing only Capital One, a major issuer of credit cards. Capital One accounts for 21.3% (4,181 of 19,603) of credit card complaints in the CFPB data.
Lobbying and declining corporate tax burdens
According to a report today in the Washington Post, most companies in the Dow 30 have dropped their tax rates by at least half in the last four decades. The article notes a few factors: the corporate tax rate of today (35%) actually is lower than the corporate tax rate of 1971 (48%); Large U.S. companies today are increasingly multinational companies and so can keep corporate profits overseas; Companies have become increasingly aggressive in their tax strategies. But here’s another factor: Lobbying. Changes in reported tax rates
| Company | 2007-2010 decline | 2007 rate | 2010 rate | 2007- 2009 lobbying (in millions) | Estimated tax reduction (in millions) |
|---|---|---|---|---|---|
| Exxon Mobil | -1.1% | 41.8% | 40.7% | $81.92 | -$565.32 |
| Verizon Communications | -7.9% | 27.4% | 19.4% | $77.58 | -$1,005.51 |
| General Electric | -7.6% | 15.0% | 7.4% | $73.17 | -$1,082.70 |
| At&T | -40.4% | 34.0% | -6.4% | $70.96 | -$7,359.95 |
| Altria | +0.2% | 31.5% | 31.7% | $63.31 | none |
| Amgen | -7.1% | 20.1% | 13.0% | $58.33 | -$377.16 |
| Northrop Grumman | -11.4% | 32.9% | 21.5% | $57.56 | -$296.08 |
| Boeing | -7.1% | 33.7% | 26.5% | $56.99 | -$321.5 |
| Median among 200 companies | -0.6% | 31.8% | 31.6% | $5.48 | -$13.08 |
Untangling the webs of immigration lobbying
As Congress inches toward major immigration legislation, a new Sunlight Foundation analysis (based on almost 8,000 lobbying reports) offers a comprehensive and interactive guide to the web of interests with something at stake.
As legislation continues to take shape, a wide range of sectors will continue flooding Congress with their lobbyists, trying to make sure that their particular concerns are fully addressed. The visualizations we present can help to better understand who these interests are, what they care about, and how intensely they are likely to lobby to get what they want.
Top government contractors spend less than a penny on politics for every dollar at stake in sequester
With the sequestration deadline rapidly approaching, one set of companies has more at stake than any other, at least in terms of sheer dollars: big government contractors. By our count, the ten biggest government contractors would stand to lose roughly $13.6 billion in contracts if the across-the-board 9.4 percent cuts to discretionary defense spending cuts were applied equally across their 2012 contract award amounts. Compare that to the $115 million they spent on lobbying and campaigns, and that investment in politics starts to look like a bargain. And if that political investment helps to avoid the proposed cuts and keep these companies' contracting revenues stable, that would amount to a 125-to-1 return for these 10 companies, on average.
Two principles to avoid common data mistakes
If David Brooks is correct, the “rising philosophy of the day” is “data-ism.” But you don’t have to believe David Brooks. Just look at the big data (e.g. Google Trends) on “big data.” For the political junkies, data became sexy in 2012. First, the New York Times’ Nate Silver’s meta-analyses of polling data triumphed over the pundits’ “gut feelings.” Second, the Obama campaign successfully used data analytics to increase voter turnout. This caused people to pay attention (witness, for example, David Brooks’ new devotion to the subject as prime column-fodder). Of course, for those of us in the transparency and accountability advocacy community, data has long been a prized commodity. And as governments around the world increasingly commit to open data promises, more and more data is becoming available. At its best, data allows us to transcend our personal anecdotal experiences, giving us the big picture. It allows us to detect relationships and patterns that we wouldn’t otherwise see. Using data smartly can help us to make better decisions about both our own lives and our society. But it’s important to understand that data and data analysis are merely tools. They can be used well, or they can be used poorly. It is remarkably easy both to mislead and to be misled by data. Hence the old adage: “There are three kinds of lies: lies, damned lies, and statistics.” For many people, data can quickly overwhelm and confuse. It’s easy to misinterpret data, or to use it irresponsibly. We as humans are not particularly good at intuitively grasping large numbers, and our educational system generally does a poor job of helping us to counter this problem. For that reason, I want to offer two basic principles that I think could prevent a majority of the data mistakes that I observe:
- Cherry-picking works better with fruit than data
- Correlation provokes questions better than it answers them
Learning why transparency matters: a new Sunlight Foundation research project
We have so far been fortunate that most people intuitively grasp the value of technology-driven openness and transparency, and as a result, an impressive range of NGOs and governments around the world are building on the basic understanding that “Sunlight is the best disinfectant” (Justice Brandeis’ aphorism that gave the Sunlight Foundation its name). For example, as of this writing, 58 countries have signed onto the Open Government Partnership. But the quick-to-grasp nature of transparency’s potential has its dangers: 1) that we cease asking questions about it because it has become an article of faith; and 2) that, as strong advocates for the cause, we begin to oversell its potential (and thus undermine its genuine contributions). This year, we are kicking off an attempt to both clarify and test our understandings of what transparency can do. Thanks to support from Google.org, we at Sunlight are embarking on a research project to evaluate the impacts of technology-driven transparency policies around the world. We plan to conduct a series of case studies.
Continue readingWhy gun control faces an uphill battle in the Senate
As the Senate prepares to take up the first major gun control debate since last December's shooting massacre in Connecticut, a Sunlight Foundation analysis of the political pressures on 26 key senators paints a pessimistic picture for passage. Absent a major pressure campaign to push senators to support gun control legislation, the political calculus points against the Senate passing any reform.
The infographic below details the various pressures senators face on a gun control vote. We've collapsed the factors into a single Gun Reform Index, where 10 is most likely to support gun reform and 0 is least likely. The index ranks each senator relative to other key senators within their own party. More details and explanation follow the graphic.
(graphic by Amy Cesal and Alexander Furnas)
What Enron’s political e-mails tell us about corporate lobbying
During its investigation into wrongdoing into Enron, The Federal Energy Regulatory Commission made public almost 500,000 internal company e-mails. These e-mails provide a unique look into the workings of the company, including how the company conducted its political operations. A few years ago, my friend and Georgetown Political Science Professor Daniel J. Hopkins approached me about analyzing what was in these e-mails. The results of our research are now published in the latest issue of Legislative Studies Quarterly, and a copy of our paper, “The Inside View: Using the Enron E-mail Archive to Understand Corporate Political Attention” can be downloaded here. To sum up our findings briefly, the e-mails show Enron’s political operations as very engaged in the narrow details of policy , keeping close tabs on daily developments and devoting considerable resources to agency rulemaking. Meanwhile, we found only sporadic discussion of campaign finance.
Continue readingDear Philanthropists: How about One Percent for Democracy?
Here’s something I just learned: The annual budget for political reform groups in the U.S. is a combined $45 million, which amounts to roughly .01 percent of the $300 billion in total charitable giving in 2011. It's also less than one quarter of the Chamber of Commerce’s $200 million annual budget. This funding disparity is a jumping off point for a new symposium over at Democracy: A Journal of Ideas entitled “Everyone’s Fight: The New Plan to Defeat Big Money.” Most significantly, the issue includes a powerful call-to-arms from Nick Penniman and Ian Simmons for the philanthropy community to contribute “One Percent for Democracy”
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