This post originally appeared at the Commonweal Institute’s Uncommon Denominator blog
Why are recipients of the Troubled Assets Relief Program (TARP) – better known as the Banking Bailout – allowed to continue to lobby? Taxpayer dollars should not be used to influence our government. We, the People should be telling them what to do, not the other way around.
TARP recipients spent $114 million on lobbying last year as the financial crisis emerged. In just the last quarter of the year eighteen bailout recipients spent $14.8 million to influence the government, as the TARP funds were distributed.
The lobbying has paid off. According to the Center for Responsive Politics, “The companies’ political activities have, in part, yielded them $295.2 billion from TARP, an extraordinary return of 258,449 percent.”
TARP recipients are currently lobbying against compensation caps at companies receiving TARP, against increasing bank regulation – and even against increased oversight of the use of TARP funds in the TARP Reform and Accountability Act! They are also lobbying against the Arbitration Fairness Act, the Fairness in Nursing Home Arbitration Act, the Mortgage Reform and Anti-Predatory Lending Act and the Helping Families Save Their Homes in Bankruptcy Act, Credit Card Holders Bill of Rights and the Stop Unfair Practices in Credit Cards Act!
But these companies are not just lobbying in favor of their own(ers) interests; they are lobbying against those of the rest of us. Recently it has come to light that Bank of America, Citigroup and other TARP recipients are organizing efforts to oppose the Employee Free Choice Act – federal legislation that would enable workers to organize unions, which results in increased income and benefits for working people, thereby enabling them to make their credit card and mortgage payments.
Use of corporate funds to influence our government is a larger problem than just this current misuse of TARP. In fact, this BofA and other companies’ use of TARP funds to oppose the Employee Free Choice Act supports an argument that the current economic crisis is a result of corporate lobbying. A corporate-funded assault on government has resulted in de-legislation and deregulation, enriching a few at the expense of the rest of us, while eroding the foundations of our economy and our democracy. Now the public has been harvested in one scheme after another, plundered for every dollar as incomes stagnated, debt skyrocketed and savings fell. Consumption fell off the cliff as the work- and debt-load tapped out people’s ability to participate in the economy. The resulting crisis has led to taxpayer dollars propping them all up.
And now millions of those taxpayer dollars are being used for … even more lobbying.
Whether or not this collapse occurred as a direct result of lobbying and other influence buying, it was not a grassroots movement that led to repealing the Glass-Steagall Act of 1933, allowing financial giants to trade mortgage-backed securities and collateralized debt obligations. It was not citizens holding politicians’ feet to the fire that killed the Financial Services Antifraud Network Act. At the same time the lobbying-bought deregulation and suspension of oversight allowed these companies to sell trillions in credit default swaps without the necessary reserves to cover the potential downside. And here we are.
Companies understand lobbying as a way to profit, not to advance policies that serve all of us. A 2006 New York Times article discusses how Google felt it had “no choice but to get into the arena” to start “spreading its lobbying dollars” around to politicians and quotes a Google lobbyist saying the “policy process is an extension of the market battlefield.” According to the Washington Post, a lobbyist explosion occurred in the last decade, doubling to 34,750 between 2000 and 2005, the result of “wide acceptance among corporations that they need to hire professional lobbyists to secure their share of federal benefits.”
This lobbying does not bring We, the People any benefit, it only boosts the financial interests of certain individuals. This is not competition to improve a product or service or the efficiency of the company. It is paying off politicians to gain unfair competitive advantage or to receive subsidies or tax breaks.
Clearly it is time to demand that TARP recipients stop using corporate funds for anything other than operating their companies, and get their noses out of our business.
Lobbyists say they serve a necessary function, providing information to legislators. But corporations can’t have it both ways. If lobbying is purely informational and not intended to sway favor for particular corporations, then the funds are not being used to generate profit for the shareholders and the use of funds and resources is theft from the company. But if the lobbying is intended to tilt the playing field and gain benefits for a company over others it is really just bribery, an affront to our democracy and laws, corrupting our system. If the use of corporate funds to lobby is for the financial gain of a few executives, this is also theft from the company by those few for their personal gain.
We should immediately prohibit companies from engaging in lobbying while accepting taxpayer dollars. Restricting lobbying by TARP recipients would be a bipartisan solution, as Republican lawmakers have called for exactly this approach in the past. The 1981 Heritage Foundation Mandate for Leadership called for a ban on lobbying by recipients of federal funds, as did the 1995 Republican “Istook Amendment.”
And it is time to open a discussion about whether any corporate funds – whether the company is a recipient of TARP funding or not – should be used to influence our government. We should be telling them what to do, not the other way around.
Click through to the Commonweal Institute’s Uncommon Denominator blog