Autos, Banks Spend $20 Million Lobbying
Tuesday 21 July 2009
by: Silla Brush | Visit article original @ The Hill
In New York’s financial district, a man walks into a JP Morgan Chase & Co. building. Eight of the country’s biggest banks, including JP Morgan Chase, have increased lobbying expenditures since the bailout. (Photo: AP)
Auto companies and eight of the country’s biggest banks that received tens of billions of dollars in federal bailout money spent more than $20 million on lobbying Washington lawmakers in the first half of this year.
General Motors, Chrysler and GMAC, the finance arm of GM, cut back significantly on lobbying expenses in the period, spending about one-third less in total than they had in the first half of 2008.
But the eight banks, the earliest recipients of billions of dollars from the federal government, continued to rely heavily on their Washington lobbying arms, spending more than $12.4 million in the first half of 2009. That is slightly more than they spent during the same period a year ago, according to a review of congressional records.
The heavy lobbying comes as President Obama and congressional lawmakers work to overhaul the financial system and the auto industry undergoes a dramatic restructuring that has already witnessed GM and Chrysler pass through historic bankruptcy proceedings.
As lawmakers turn their attention to enacting major changes to the regulatory system, the financial industry is at a crossroads. Some smaller and regional banks continue to show considerable signs of weakness while several big Wall Street banks announce multibillion-dollar profits.
Those big banks traditionally are among the most active Washington lobbying interests in the financial industry, and the recession has done little to dent their spending. Major banking interests maintain it’s important to have a seat at the table as lawmakers chart such large changes. Since last fall, companies receiving government funds have argued that none of the taxpayer money they were receiving was being spent on lobbying.
Still, lawmakers have pushed back hard on companies that continued to lobby, with some targeting the banking industry for scuttling legislative efforts while relying on government help. Democratic leaders blamed the industry when a major bankruptcy bill failed to pass the Senate earlier this year.
The bill would have empowered bankruptcy judges to rewrite the terms of primary home mortgages. Industry groups were stridently opposed to the effort, which they dubbed “cramdown.”
Some of the biggest banks are also among the more than 30 that have already moved to repay funds from the Troubled Asset Relief Program (TARP), the formal name for the bailout package Congress passed last October. More than $70 billion has been repaid to the federal government.
Six of the eight banks spent more to try to sway lawmakers in the first half of 2009 than over the same period in 2008, before the worst of the financial crisis took hold. The eight banks include: Citigroup, JPMorgan Chase & Co, Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, State Street and Bank of New York Mellon.
JPMorgan was the top spender, at $1.76 million in the second quarter and $3.07 million in first half of the year. That is roughly 20 percent more than the bank spent on lobbying in the first half of 2008.
Citigroup, which has yet to repay any of the $50 billion in bailout money it has received, was the second highest, at $1.67 million in the quarter and $2.92 million in the first half. A spokesman for Citigroup declined to comment.
Only Bank of America and Goldman Sachs spent less on lobbying during the first six months of 2009 compared to the first half of 2008.
GM spent $5.56 million on lobbying in the first half of 2009, compared with $7.08 million in the same period in 2008. GM also has dropped a dozen lobbying contracts.
“GM’s spending is proportional to its activity,” said Greg Martin, GM’s spokesman. “At any given time, GM is engaged with policymakers on a variety of complex policy issues with significant economic and competitive consequences to individual automotive companies.”
Chrysler has continued its outside lobbying contracts after establishing itself as a legally new company during the bankruptcy proceeding. Chrysler spent $1.42 million in the first half of the year, compared with $2.78 million a year ago. GMAC spent $660,000 this year, compared with $1.15 million a year ago.
American International Group, the insurance firm crippled by trades in financial derivatives that received roughly $180 billion in bailout commitments, closed its Washington lobbying shop earlier this year. AIG continues to spend money on counsel to answer requests for information from the federal government, but the firm said it does not lobby on federal legislation.
Jim Snyder contributed reporting.