The nation’s largest banks are pumping more money into the battle over the rewriting of the rules of finance as legislation heads to a vote in the Senate as early as this week.
Six of the top 10 U.S. banks by assets, including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley, ramped up donations to lawmakers from their political action committees in the last month, according to reports filed for yesterday’s Federal Election Commission deadline.
Goldman, Bank of America Corp. and U.S. Bancorp were among seven banks that increased the amount spent on lobbying during the first three months of the year compared with the same period in 2009, separate reports filed with Congress showed. The U.S. Chamber of Commerce doubled its lobbying spending in the first quarter.
“We’re in the endgame,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group which is pressing for stronger regulations. “They’re all-in to defeat reform.”
Goldman Sachs, JPMorgan, Morgan Stanley and Citigroup Inc., all based in New York, San Francisco-based Wells Fargo & Co. and Pittsburgh-based PNC Financial Services Group Inc. each donated more to federal candidates in March than in the previous two months combined.
Goldman Sachs Giving
Goldman Sachs’s PAC contributed $290,500 in March compared with $32,500 in January and February. Its donations included $15,000 each to the Republican House and Senate fundraising committees and contributions to lawmakers in both parties. Goldman boosted its lobbying expenditures to $1.2 million during the first three months of 2010 from $670,000 during the same period a year earlier. Company spokeswoman Melissa Daly had no comment.
Bank of America’s PAC gave $55,000 to federal candidates in March and $60,500 the month before after giving just $2,000 in January. The Charlotte, North Carolina-based bank spent $940,000 on lobbying between January and March, up from $660,000 during the same three months in 2009.
“PAC money comes from voluntary contributions from our associates, and associates are particularly interested in the issues being debated right now,” said Shirley Norton, a spokeswoman for Bank of America.
Citigroup made $61,000 in PAC donations in March after giving $23,000 during the two previous months combined. Its lobbying increased to $1.31 million from $1.25 million during the first three months of 2010 compared with 2009. Molly Millerwise Meiners, a spokeswoman, declined comment.
Lawmakers are considering legislation that would set up a mechanism to unwind firms whose failure would threaten the financial system, create a consumer-protection bureau and bolster oversight of derivatives. The Senate may take up its bill as early as this week and would have to meld it with a House-passed version.
“We’re going to have some more choices coming up because right now we’ve got a big battle on financial regulatory reform,” President Barack Obama told Democratic donors in California Monday night.
Goldman Sachs is already facing extra scrutiny because of a fraud lawsuit the U.S. Securities and Exchange Commission brought last week.
The firms are teaming up with business groups to shape the regulations, dispatching executives to Capitol Hill, sending letters to lawmakers and contributing to key legislators.
The U.S. Chamber of Commerce, the nation’s largest business group, spent $25 million lobbying in the first quarter, more than double in the same period a year ago. It had 60 lobbyists registered to work on financial regulations through January, more than any other group, and is trying to get members to meet with every senator, the chamber said yesterday.
Members have sent 220,000 letters to Capitol Hill, including 40,000 in the last month, said David Hirschmann, president of the chamber’s Center for Capital Markets Competitiveness.
“I’ve been besieged by local bankers and the credit unions,” Senator Lindsey Graham, a South Carolina Republican, said in an interview. “They are afraid this consumer protection thing is going to become a Community Reinvestment Act on steroids,” he said, referring to a federal law requiring banks to make loans in low-income neighborhoods.
Graham said lobbying campaigns occur in waves and “I am sure the wave will get higher and thicker when we get close to actually doing something.”
The Business Roundtable, which represents chief executives, spent $2.3 million lobbying in the first quarter compared with $1.2 million in the same period of 2009.
The group is bringing 20 officials from companies such as Chicago-based Boeing Co. and Armonk, New York-based International Business Machines Corp. to Washington this week to meet with senators and aides about regulating derivatives, said Larry Burton, the executive director.
“We believe there ought to be financial regulatory reform, but we need to make sure we have an end-user exemption that works,” said Burton, referring to an exemption for companies that don’t trade derivatives yet use them for hedging.
Lawmakers are also getting more money flowing into campaign coffers. The financial industry held a fundraiser for Idaho Senator Mike Crapo, a Republican on the banking committee, on April 14; others are planned for Republican Senators John Thune of South Dakota and Scott Brown of Massachusetts.
National Republican Senatorial Committee Chairman John Cornyn of Texas said he makes biweekly trips to New York to meet with prospective donors in the financial community.
“Wall Street has now been demonized and people are worried about what that might mean in terms of legislation,” Cornyn said. “If they were happy with the Democrats, they’d be less likely to answer our calls.”