Politico is reporting that the financial services industry has lost about 600 registered lobbyists this year with the economic meltdown. But, the amount of money being spent on financial services lobbying is actually up from last year. So in general, the remaining bank lobbyists are actually making more money now, despite the crashed economy!
In 2008, before the bank failures, less money was being spent lobbying Congress but, astonishingly, this year after taxpayer funds were used to bailout the banks they are spending more money lobbying the federal government. Here is a clip from Politico's report:
As far as the financial services industry’s Washington clout is concerned, this much is clear: Even with its reduced ranks, it’s a lobby that still possesses potent weapons. The amount of money being spent on the surviving lobbyists is on track to exceed last year’s amount, with $223 million spent in the first six months of this year, compared with $422 million in 2007. And the industry’s donations to members of Congress are second only to those of the health care industry.
The story notes that the Obama administration did close down the lobby arm of Freddie Mac, the quasi-government lender taken over by the federal government. But other financial services companies are still spending big bucks on lobbying against consumer protections.
Some bank lobbyists did lose their jobs lobbying against reforms from their high-paid posts outside of government, only to find new gigs on the inside. They have used the "revolving door" to get positions in government bodies whose decisions will affect the very industry they served. Case in point, according to the story: "Vince Randazzo, the former head of Wachovia’s $2 million government affairs operations, . . . returned to the Capitol as a Republican deputy staff director on the House Financial Services Committee." That Committee is charged with conducting oversight of the banking industry and, in his new job, Randazzo "oversees internal and external communications and strategy."
Randazzo's former employer, Wachovia, came under fire this time last year for "extending an $8 million bailout loan to the cash-strapped National Republican Congressional Committee to finance last-minute election activities to help GOP House candidates [while] it was denying credit and freezing assets to thousands of small businesses," according to Facing South's investigation of North Carolina-based Wachovia. (That controversial loan was made while Wachovia was in the middle of a buyout deal with the Bush Administration which was promising to guarantee up to $42 billion from U.S. taxpayers to cover losses after it declared Wachovia "systematically important," i.e., "too big to fail." Ultimately, that deal to subsidize Citibank's purchase of Wachovia's assets fell through and Wells Fargo merged with Wachovia.)