Revolving Door: From Top Futures Regulator to Top Futures Lobbyist

Matt Taibbi - ROLLING STONE
January 11, 2012

 

While America focused on New Hampshire, a classic example of revolving-door politics took place in Washington, going almost completely unnoticed. It’s a move that ranks up there with the hire of Louisiana congressman Billy Tauzin to head the pharmaceutical lobbying conglomerate PhRMA -- at a salary of over $2 million a year -- immediately after Tauzin helped ram through the Medicare Prescription Drug Bill, a huge handout to the pharmaceutical industry.

In this case, the hire involves Walter Lukken, who toward the end of the Bush years was the acting head of the Commodity Futures Trading Commission. As the chief regulator of the commodities markets, it was Lukken’s job to spot and combat speculative abuses and manipulations that might have led to artificial price hikes and other disruptions.

In 2008, the last full year of his tenure, Lukken presided over some of the worst chaos in the commodities markets in recent history, with major disruptions in the markets for food products like wheat, cotton, soybeans, and rice, and energy commodities like oil.

Most notoriously, 2008 saw a historic spike in the price of oil futures, an enormously destructive speculative bubble that peaked in July of that year at the lunatic high price of $146 per barrel (Goldman, Sachs at the height of the mania was telling investors oil might go to $200 a barrel).

It was Lukken’s job to spot the speculative abuses leading to disruptions like that bubble, but he didn’t do it. Instead, he repeatedly insisted that there was nothing untoward going on, most notoriously through testimony before the House and the Senate at the height of the oil boom.

In testimony that summer, Lukken continually insisted that the price surge was due to normal supply-and-demand forces, ignoring the far more obvious explanation of a massive inflow of cash from commodity index speculators.

Despite data showing that the amount of commodity index speculation had grown from $13 billion in 2003 to more than $260 billion as of March 2008 -- in other words, the amount of money betting on a rise in commodity prices had risen by a factor of twenty during that time -- Lukken on May 7, 2008 told the Senate that a more likely explanation for the surge could be found in the growth of industrial demand from places like China, and also, get this, in changes in the weather:

These are extraordinary times for our markets with commodity futures prices at unprecedented levels. In the last three months, the agricultural staples of wheat, corn, soybeans, rice and oats have hit all-time highs. We have also witnessed record prices in crude oil, gasoline and other related energy products. Broadly speaking, the falling dollar, strong demand from the emerging world economies, global political unrest, detrimental weather and ethanol mandates have driven up commodity futures prices across-the-board.
On top of these trends, the emergence of the sub-prime crisis last summer led investors to increasingly seek portfolio exposure in commodity futures. As the federal regulator of these products, the CFTC is closely monitoring these growing markets to ensure they are working properly for farmers, investors, and consumers. To date, CFTC staff analysis indicates that the current higher futures prices generally are not a result of manipulative forces.

By insisting that the spike was “not a result of manipulative forces,” Lukken helped Wall Street in its efforts to avoid reforms that might have prevented such abuses, like the closing of a series of loopholes and exemptions that allowed a handful of major speculators to play a lopsided role in the setting of commodity prices.

So what was Lukken’s reward for helping the financial services industry avoid such reforms? Well, Lukken has just been named to head the Futures Industry Association, or FIA, the chief lobbying arm of futures investors.

This follows the Tauzin pattern of revolving-door hires: a government official carries water for a powerful industry, then moves on to take the cushy job with the industry’s lobbying arm once he leaves office.

Among people who follow these markets for a living, the Lukken hire had an embarrassingly over-the-top quality, like a CEO who goes the appearances-be-damned route and puts his 23 year-old secretary/mistress on the board of directors.

Mike Masters is head of the Masters Capital Management hedge fund and also chairman of Better Markets, a new non-profit advocacy group that promotes the public interest in the labyrinthine vagaries of the financial markets, and especially the commodities markets. He describes the hiring of Lukken as an extreme example of revolving-door politics.

“It’s not the revolving door. It’s the express elevator,” he says.

Masters remembers Lukken because the two men both testified before the Senate in that summer of 2008; he recalls watching the CFTC chief, aghast, when the latter continued to insist that there was nothing abnormal going on in the commodities world, despite a historic series of disruptions.

“And it wasn’t just oil,” Masters says. “There was the debacle in the wheat markets, with cotton, with soybeans and corn, there were riots in the Phillipines over the rice markets. And Lukken was saying everything’s okay. It was crazy.”

It was a see-no-evil, hear-no-evil approach to government oversight, which had far-reaching consequences in that crisis year. The CFTC, remember, also has purview over derivatives, meaning the failure to prevent the disastrous swap positions accumulated by the likes of AIG also falls, in part anyway, at the CFTC's doorstep.

A Dow Jones news story contained a hilarious summary of Lukken’s blase administrative style, in which he was described as having downplayed the whole being-a-stickler-for-rules aspect of regulation:

When Lukken headed the CFTC, he backed a more flexible, "principles-based" approach to regulation, different from what was seen as the prescriptive and "rule-based" methods employed by the Securities and Exchange Commission, which polices stock markets.

Obviously this kind of thing has been going on forever in Washington, but some revolving-door hires feel worse and more shameless than others, and this is one of those.  But really it's the same old story: regulators keep falling down on the job, and keep getting rewarded for it by Wall Street, and nothing gets done about it.

The Trouble With That Revolving Door...

Monday, December 19, 2011 by the New York Times

by Thomas Edsall

 

Last week, an inside-the-Beltway newsletter, First Street, published a unique top-ten list. It reveals which former members of Congress are among the most important Washington lobbyists.

The first four on the list — Senator John Breaux, of Louisiana (who served in Congress from 1972 to 2005), Representative Tom Downey, of New York (1974 to 1993), Representative Victor Fazio, of California (1979 to 1999), and former Democratic House Majority Leader Richard Gephardt (1977 to 2005) – are all members of the Democratic Party, which historically has represented the bottom half of the income distribution.

These former Democratic members of the House and Senate are on the cutting edge of a revolution in the political culture of the nation’s capitol. Without attracting the attention of the general public, the career path of retired legislators has transformed the thinking of those still in Congress, Democrat and Republican alike.

When Washington politicians leave office, many, if not most, no longer return home. Instead, they head straight to the lucrative world of K Street, the nation’s lobbying corridor, which runs through the heart of Washington. A former member of the House or Senate with even modest seniority can now expect to walk into a job paying up to $1 million or more a year – and much more when bonuses are paid for bringing in new clients.

There are various estimates of the number of living former members of the House and Senate. The Association of Former Members of Congress has a listing of 592, and estimates there may be as many as 1,000, a large number of whom are no longer employed at all. The Congressional Research Service reported that as of Oct. 1, 2009, there were 455 former members receiving some form of federal pension.

The Center for Responsive Politics has found that 370 former members are in the influence-peddling business, including at least 285 who are now registered as federal lobbyists. The remaining 85 who are not formally registered as lobbyists are described by the center’s website, OpenSecrets.org, as providing “strategic advice” to corporate clients or as performing work classified as public relations.

For Obama and Democratic leaders who are trying to set an election agenda focused on income inequality, wage stagnation, and downward mobility for the middle and lower class, the prominence of Democratic lobbyists has become problematic.

President Obama, in his Dec. 6 speech in Osawatomie, Kan. sought to shift the 2012 election debate onto terrain favorable to Democrats. “Look at the statistics,” the president said. “In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year.” Obama also pointed out that:

For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical C.E.O. who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decade the incomes of most Americans have actually fallen by about 6 percent.

Jeff Hauser, a spokesman for the A.F.L.-C.I.O., said the role of former Democrats in representing corporate America is one of the reasons that the umbrella labor organization has recently broken its firm allegiance to the Democratic Party. “We can’t be positioned as attached to the Democratic Party because there are elements of the party that have contributed to the 99 percent versus 1 percent division in this country,” he said. Hauser cited a key speech by A.F.L.-C.I.O. president Richard Trumka on May 20 declaring organized labor’s independence from either party:

Our role is not to build the power of a political party or a candidate. It is to improve the lives of working families and strengthen our country. It doesn’t matter if candidates and parties are controlling the wrecking ball or simply standing aside — the outcome is the same either way.

A case in point is Richard Gephardt, who represented a working-class district in south St. Louis for 28 years. Gephardt served one year as chairman of the House Democratic Caucus, six as Democratic majority leader, and eight as Democratic minority leader. Through much of his congressional career he was a staunch ally of organized labor (his father was a member of the Teamster’s Union) fighting for the interests of trade unions on issue after issue.

An unsuccessful candidate for the Democratic presidential nomination in 1988 and in 2004, Gephardt had substantial labor backing in the form of get-out-the-vote efforts and key endorsements from the Teamsters, the Machinists, the Steelworkers, and the Ironworkers. In 2003 John Sweeney, then president of the A.F.L.-C.I.O., said, ”Dick has been a real friend of working people and a powerful voice for working families on issue after issue.”

Upon leaving Congress in 2005, Gephardt joined the Washington offices of DLA Piper as senior counsel. Two years later, he founded his own lobbying firm, the Gephardt Government Affairs Group.

By 2010, annual firm billings had shot up from $625,000 in 2007 to $6.59 million. Gephardt’s client list was blue chip, Goldman Sachs (paid Gephardt $200,000 in 2010); Boeing Co. ($440,000); Visa Inc. ($200,000); Ameren Corp, the energy holding company ($200,000); and Waste Management Inc., the leading provider of trash and garbage removal ($320,000).

A normally voluble political strategist and committed liberal who has worked with Gephardt in past elections said about the former Congressman’s lobbying clientele, “I don’t want to talk on the record, it sucks. It’s a sad situation for us.”

For an ex-member of Congress of either party, the financial appeal of lobbying is hard to resist.

In 2010, former representative Billy Tauzin, Republican of Louisiana, set a record for ex-members, making just over $11.5 million running the drug industry’s major lobbying arm, the Pharmaceutical Research and Manufacturers of America.

In 2009, former representative James Greenwood, Republican of Pennsylvania, who became C.E.O. and president of the Biotechnology Industry Organization after retiring from Congress, made $1.16 million, along with fringe benefits of $60,000.

That same year, former representative Daniel Glickman, Democrat of Kansas, received $1.33 million and $23,398 in fringe benefits as C.E.O. of the Motion Picture Association of America, according to I.R.S. filings.

With examples like this before them, most incumbent members, as they go about their daily routine of casting votes and attending committee meetings, must have in the back of their minds an awareness that they are likely to go into the influence-peddling business in the future. This knowledge inevitably influences – and arguably corrupts – their votes on legislation crucial to the interests most likely to hire them after they leave the halls of Congress.

The corruption inherent in the open revolving door between Congress and K Street is well described by Lawrence Lessig, a professor of law at Harvard, in his new book Republic, Lost.

Both Fazio and Downey defend their decisions to become lobbyists. Each contends he remains committed to advancing and defending the interests of the less well off.
“When I had options, I made some decisions, one thing led to another, and here I am,” Fazio, who is a member of the Akin, Gump, Strauss, Hauer & Feld law firm, said in an interview. “Clearly when you’ve been in the public sector, you know the system, you know the arguments that are most effective. You can be a very effective advocate.”

“What matters is what the Senate is doing on the payroll tax, not whether some old members of Congress do lobbying,” Downey argued. Downey noted that he has a number of pro bono clients, including advocates of AIDS research, homeless organizations and groups seeking to stop trafficking in women. “At the end of the day, I feel quite satisfied having spent at least half my time on projects for which I am not paid,” he said. In 2010, his firm, Downey McGrath Group, reported lobbying income of $3.32 million from such clients as Time Warner Cable, FedEx, the National Association of Chain Drugstores and the investment bank Lazard Ltd.

Of the four top lobbying Democrats, Breaux — who served as chairman of both the Democratic Leadership Council and the Democratic Senatorial Campaign Committee — fits most comfortably into his lobbying role. Breaux won fame in 1981 when, after getting huge sugar subsidies inserted into Republican-sponsored tax-cut legislation, he told reporters, “My vote can’t be bought, but it can be rented.” In 2010, his firm, the Breaux Lott Leadership Group, a subsidiary of the Patton Boggs LLP law firm, had billings of $11.83 million from such clients as Citigroup, Goldman Sachs, General Electric, AT&T, Tyson Foods and the Pharmaceutical Research and Manufacturers of America.

Gephardt, in turn, has posted on his firm’s web site a link to an article about the release of First Street’s newsletter, under the headline “Dick Gephardt Named To 2011 List of Top Lobbyists.”

5 Behemoth Banks That Hold Our Political System Hostage

The banks' ranks are based on how shamelessly they game the political process through lobbying, revolving door politics and campaign donations.
By Sarah Jaffe and Joshua Holland, AlterNet
Posted on October 19, 2011


The economic crash led to the loss of 9 million jobs and the biggest drop in American home-ownership since the Great Depression. Long-term unemployment, poverty and hunger have increased dramatically. People are angry. The Occupy Wall Street movement, a stand against Wall Street's greed, excess and criminality, has captured the imagination and participation of millions across the nation and the globe.

The giant mortgage bubble and the irresponsible and corrupt practices that caused the catastrophic economic crash didn't emerge out of thin air. They were a consequence of decades of pay-to-play politics rife with conflicts of interest; a political system awash in cash and legal pay-offs, designed to undermine the checks and balances that could have prevented the meltdown.

Many of these checks and balances were implemented during the Great Depression. How they were eroded and eventually abandoned is the story of a small group of banks, financial companies and elites involved in major conflicts of interest, revolving-door politics and backroom deal-making -- all to protect the interests of the global elite at the expense of the American public.

Big Finance has a long history of working hard to deregulate the American economic system on behalf of global capitalism run amok. One of its biggest coups was the overturning of the Glass-Steagall Act, a Depression-era law that created a firewall between investment banking and the commercial banks that hold deposits and make loans.

The first victory in the quest to overturn this major protection came in 1986. Under intense pressure from Wall Street, the Federal Reserve reinterpreted a key section of Glass-Steagall, deciding that commercial banks could make up to 5 percent of their gross revenues from investment banking. After the board heard arguments from Citicorp, J.P. Morgan and Bankers Trust, it loosened the restrictions further: in 1989, the limit was raised to 10 percent of revenues, and in 1996, they hiked it up to 25 percent.

Then, according to a report by PBS' Frontline, “In the 1997-'98 election cycle, the finance, insurance, and real estate industries (known as the FIRE sector), spen[t] more than $200 million on lobbying and [made] more than $150 million in political donations” – most of which were “targeted to members of Congressional banking committees and other committees with direct jurisdiction over financial services legislation.”

The following year, after 12 unsuccessful attempts, Glass-Steagall, which would have made the crash of 2007-2009 impossible, was finally repealed. And it was only then that the explosion of shaky mortgage-backed securities began. “Subprime” loans, which made the mortgage system so vulnerable, made up 5 percent of all mortgages in the U.S. the year before repeal, but had skyrocketed to 30 percent of the total at the time of the crash.

The Glass-Steagall act was killed by financial interests seeking to maximize deregulation. The result was a casino-like environment that almost destroyed the U.S. and global economy. The giants of Wall Street enjoyed a massive bailout courtesy of American taxpayers, and they're still hard at work gaming the system, lobbying hard against new regulations that might avert the next bubble-led crash.

AlterNet, in partnership with the Media Consortium, looked at the five banks that exert the most influence on our democracy. Based on their size, the amount of money they spend on campaign donations and lobbying, and the number of employees who’ve gone through the revolving door into public service, or vice versa, we determined which banks have had the worst impact on the country. We’ll rank each one based on our research, and come up with the worst of the worst--the big bank that’s done the most damage to America's economy and society.

A word of caution is in order. This report is based only on what the banks are forced to disclose. It doesn't include lobbying by corporate front-groups like the Chamber of Commerce, and it doesn't include the “independent” campaign spending that has exploded in the wake of the Supreme Court's Citizens United decision, which corporations are no longer required to disclose to the public. This is a classic story of American political corruption writ large.


Meet the Big Banks
You’re no doubt familiar with Bank of America. Just recently BofA has made news because it's been sued for $10 billion over “toxic” mortgage-backed securities, and it's imposing an arbitrary and unfair $5-a-month fee for customers who use their debit cards. Bank of America’s on shaky ground these days and its stock price has dropped significantly, in part because of its purchase of Countrywide Financial, a mortgage lender that wrote a huge chunk of the bad mortgages that broke the economy. Still, it remains a giant company, ranked number 9 on the Fortune 500 list of largest corporations for 2011, right under General Motors and right above Ford.

BofA is the behemoth it is because the bank has taken over 13 other financial institutions since the 1990s, including US Trust, NationsBank, BayBanks, and most recently the large investment company Merrill Lynch, but it's no longer the biggest of all. According to its most recent filings, JPMorgan Chase is the biggest financial firm in the country (it ranks number 13 on the Fortune 500, right below AT&T), with $2.29 trillion in assets. In 2010, the bank had $115 billion in revenues, and turned a neat profit of $17.4 billion. Chase is the conglomerate’s retail banking and credit branch, while JP Morgan has been the investment, asset management and private banking end of operations since the merger in 2000 of JP Morgan and Chase Manhattan. In 2008, JPMorgan Chase swallowed up Bear Stearns and Washington Mutual; despite common complaints of “too big to fail,” the big banks mostly got even bigger after the economic crisis. JPMorgan Chase is now headquartered in midtown Manhattan, many blocks north of the Occupy Wall Street encampment in the financial district.

Bank of America still has $2.22 trillion in assets even after a steep decline. Last year, it made $134 billion in revenues, and reported a loss of $2.24 billion. (The protest group US Uncut loves to point out that Bank of America received a $1 billion tax refund in 2010.) It's headquartered in Charlotte and has branches around the country -- though it may be closing up to 600 of them. Interestingly, the Democratic party will hold its 2012 convention in Charlotte, where BofA is the big dog in town.

Hot on JPMorgan and BofA’s heels in the size race is Citigroup, which just announced this week that it would be charging its depositors a $15 monthly fee if they don’t maintain a $6,000 balance in their checking accounts--yet another unfair and regressive fee, even though Citigroup isn’t exactly hurting for money. It is number 14 on the Fortune 500, with $1.91 trillion in assets, $111 billion in revenues and $10.6 billion in profits in 2010.

Wells Fargo reported profits of $12.36 billion last year, and sits at number 23 on the Fortune list, just above Procter & Gamble. The California-headquartered bank acquired Wachovia, which had itself previously absorbed First Union and the Money Store among others, in 2008, in the throes of the financial meltdown, and as of 2010 has $1.26 trillion in assets and $93 billion in revenues.

Goldman Sachs, the famed “vampire squid” in Matt Taibbi’s formulation, is the only investment bank on our list. However, no look at the corrupting influence of Big Finance would be complete without it. It's “only” at 54 on Fortune’s list, but still higher than, among others, Intel, Chrysler and Sears, with $911.3 billion in assets and $46 billion in revenues, and profits of $8.35 billion in 2010. For many, Goldman Sachs is the face of all that’s wrong with Wall Street, stoking massive anger when CEO Lloyd Blankfein told a reporter that he was “doing God’s work.”

Meet Their Bailouts
The big banks weathered the economic crash thanks to large injections of taxpayer dollars. The original bailout plan, the Troubled Asset Relief Program, was signed into law by George W. Bush and gave direct handouts to the banks to keep them from collapsing.

Economist Dean Baker told AlterNet that Big Finance “never wanted to see the removal of the government from the market. They wanted the government to come in and bail them out.”

They were also happy to accept “government deposit insurance or the back-up lines of credit provided by the Fed through the discount window,” he said. “What the financial industry wants is to have these incredibly valuable government safeguards without restrictions on the banks' behavior.”

Among our big five, Citigroup was the largest beneficiary of these funds, with $45 billion, but even Goldman Sachs got $10 billion. Wachovia/Wells Fargo and JPMorgan got $25 billion each, while Bank of America got $30 billion. According to ProPublica’s calculations, the big five have all paid back their TARP funds.

Click here to enlarge.

But TARP was only one way in which the federal government subsidized the big banks. The Federal Reserve also handed out trillions in unsupervised loans during the so-called crisis period.

Dean Baker noted in his book False Profits that the Fed loans were actually more significant than the bailouts. “The vote on the TARP was a way to get Congress’s fingerprints on the policy of subsidizing the banks,” he wrote, “just as the war authorization bill approved in October 2002 implicated Congress in President Bush’s subsequent decision to wage war on Iraq under false pretenses.”

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And if those numbers weren't big enough, just this August Bloomberg reported even more secret Fed loans to the big banks: “The $1.2 trillion peak on Dec. 5, 2008 -- the combined outstanding balance under the seven programs tallied by Bloomberg -- was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.”

These staggering numbers in direct bailouts and loans don’t even take into account the other ways in which these banks benefited from federal handouts: loans to other banks that were used to pay back debts to the big five; government support for consolidation, making the too-big-to-fail banks even bigger. For instance, in addition to its own bailout funds, Goldman Sachs got $12.9 billion from the funds the government used to bail out insurance giant/seller of derivatives AIG.

“Without question, direct government support was critical in stabilizing the financial system, and we benefitted from it,” Goldman’s Lloyd Blankfein said.

Campaign Donations
The big banks are some of the biggest donors to political campaigns in the country. Yet, when you compare what they spend on candidates to what they got in bailouts, it’s pennies on the dollar. In other words, it’s a worthwhile investment to spend money on candidates.

Corporations can't give money directly to politicians running for federal office. They get around that sticking point in several ways. First, they can donate to campaigns through their political action committees (PACs). (A corporation can't fund its PACs from its revenues directly; it can create a PAC, pick up its administrative costs, and then solicit contributions from the company's executives and shareholders.) But corporate PACs can give no more than $5,000 a year to a given federal candidate.

Another way is through the use of what's known as “soft money.” Soft money is used to build party infrastructure or to buy political ads that are produced independently from a campaign. Soft money ads are ostensibly used to educate voters about various issues, but they often look exactly like campaign ads that convey a clear message of whom a voter should or shouldn't support.

“Bundling” is another way corporations inject money into politics. There are limits on how much an individual can give to a candidate for federal office, so wealthy donors seek out contributions from friends, family and business associates, and “bundle” them into large pots of cash. In exchange, they usually become part of a club – like the Bush “Rangers” – and get invited to insiders' events where they have plenty of opportunities to influence a candidate.

OpenSecrets.org's list of the top all-time political donors from 1989 to 2012 includes contributions from individuals associated with a company, from Corporate PACs and soft money through 2010 (more on that below). Where do the banks stack up? Goldman Sachs is number 25, five slots higher than the National Rifle Association. It also spends more on candidates than the American Hospital Association, the AFL-CIO and defense contractor Lockheed Martin. Citigroup (number 39 on the list, just above Microsoft), JPMorgan Chase (number 46, just below Blue Cross/Blue Shield) and Bank of America (number 50) are all heavy hitters. Of our big-spending financial institutions, only Wells Fargo didn't make the cut for the top 50.

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As far as corporate PACs alone, Bank of America leads among commercial banks this election cycle, despite – or perhaps because of – its struggles, having already spent $249,500 on candidates for 2012--$153,000 of that on Republicans. Wells Fargo and JPMorgan Chase are close on its heels, with $171,500 and $166,499 respectively, and they both follow the trend, in 2012, of leaning Republican. (The finance industry as a whole gives about 69 percent of its donations to the GOP). Citigroup's PAC donated $56,000 thus far for 2012. And Goldman Sachs leads the pack among investment banks this cycle, having already shelled out nearly $300,000.

Just who are the recipients of all this largesse? There are many, but most play key roles on Congressional committees that oversee their businesses. Consider just one example: Senator Chuck Schumer, D-New York, one of the most powerful members of Congress (Schumer is known as “the senator from Wall Street”).

According to the National Journal's rankings, Schumer is tied with two others as the 10th “most liberal” member of the upper chamber. But he owes his career to Wall Street. As Salon editor Steve Kornacki noted, in the early 1980s, when he was a little-known back-bencher in the House, Schumer managed to get himself a seat on the House Banking Committee, and immediately “set about making friends on Wall Street, tapping the city’s top law firms and securities houses for campaign donations.” "I told them I looked like I had a very difficult reapportionment fight. If I were to stand a chance of being re-elected, I needed some help," he would later tell the Associated Press.

Wall Street would continue to have his back as his career progressed. According to Open Secrets, between 2007 and the current cycle, Schumer raked in $3.9 million from the securities, banking and insurance industries – over 20 percent of all his fundraising. He has raised more from Wall Street than any other lawmaker over the last two years. Over the course of his political career, the securities and investment industries are his top contributors; the four most generous institutions during his time in the Senate have been Goldman Sachs, Citigroup, Morgan Stanley and JPMorgan Chase, in that order.

The ostensibly liberal senator from New York, who sits on the Senate Finance and Banking, Housing and Urban Affairs Committees – and chairs the all-important Committee on Rules and Administration (which deal with, among other things, lobbying restrictions) – has returned that friendship consistently.

Although he voted for the Dodd-Frank financial reform bill in 2010, earlier this year, he joined several other lawmakers in a letter urging federal legislators not to adopt new regulations on derivatives, arguing that they would “inevitably result in significant competitive disadvantages for U.S. firms operating globally.” He voted to extend the Bush tax cuts on capital gains in both 2005 and 2006.

In 2008, the New York Times analyzed Schumer's voting record, and found that he has consistently sided with Wall Street on issue after issue, often crossing the aisle to do so.

That's just Congress. The presidential election in 2012 will be the most expensive in history; Barack Obama has already raised over $89 million for his reelection, while his GOP opponents are raising and spending boatloads of cash as well.

The banking industry is by and large leaning more Republican for 2012 than it did in 2008 (This only includes direct contributions to the campaigns; it doesn't include money Obama has raised for the Democratic National Committee, which will help support his re-election efforts). Through the 2nd quarter of 2011, the Obama campaign has only raised $857,000 from the securities and investment industries, $44,750 from Goldman Sachs, the only one of our top five to make it onto OpenSecrets’ top contributors' list.

Two of Obama’s top bundlers are also connected to Goldman Sachs. Vicki Heyman has brought in between $100,000 and $200,000 for Obama, according to OpenSecrets, and David Solow between $50,000 and $100,000. (In comparison, by the end of the 2008 election, Obama had gotten $1,013,000 from Goldman Sachs, $808,000 from JPMorgan Chase and $736,000 from Citigroup.)

Mitt Romney is the clear favorite candidate of Wall Street this year, having taken in $2,339,588 from securities and investment companies. Goldman Sachs is the top contributor to Romney’s campaign, having given $293,250 between political action committees, employees and their families. Bank of America has kicked in $59,000, Wells Fargo and JPMorgan around $45,000 each and Citigroup brings up the rear with $33,000.

Wells Fargo tossed a few thousand to Newt Gingrich and Herman Cain as well. It's always good to cover one's bases.

We should note that this report, like all others on this topic, is necessarily incomplete. Corporations don't like airing their campaign spending in public, and there are two ways they can and do avoid it.

First, corporate front-groups like the Chamber of Commerce effectively “launder” corporate campaign cash, keeping a company's fingerprints from appearing on lobbying and campaign disclosure reports. The Chamber is not required, and does not disclose its members, but according to Think Progress, “several confirmed Chamber members are banks which were bailed out by taxpayers.” These include Citigroup, Marshall & Ilsley Bank and the New York Private Bank & Trust. According to Americans for Financial Reform, Bank of America, JPMorgan, Morgan Stanley, PNC Financial Services and M&I Bank are also Chamber members.

Prior to the Supreme Court's 2010 ruling in Citizens' United v. FEC, there were limits on corporations' (and unions') independent expenditures and on “electioneering communications” – ads that explicitly call for the election or defeat of a candidate before an election. All campaign spending had to come from individual execs and shareholders or be funneled through corporate PACs. But the decision changed the entire landscape, allowing corporations and unions to spend unlimited dollars on politics, directly from their treasuries and without the disinfecting light of disclosure. Following the decision, a bill that would have forced corporations to disclose these donations had enough bipartisan support for passage, but a vote on the measure was blocked three times by Senate Republicans.

Lobbying
After the economic crisis, one might have expected the big banks to have less money to spend on lobbying. But financial reform was on Washington's agenda, so the bankers coughed up the cash for lobbyists in an effort to make sure the final result wasn't too hard on them or their bottom line. The lobbying numbers for all five of the banks in our report went up dramatically in recent years, starting their dramatic spike in 2006 and peaking in 2010, when the Dodd-Frank financial reform bill was under consideration.

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Banks have spent more than any other sector on lobbying between 1998 and 2011, and Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, and Wells Fargo were at the top, dropping $12,020,000 between them in 2011 alone. And those efforts have paid off for them, as they’ve been able to maintain most of their business practices practically unchanged since before the crash.

Their interests were clear. According to a report by the inspector general of the Troubled Assets Relief Program, the banks lobbied heavily against limitations on executive pay that legislators had tried to attach to the bailout money. They worked hard to preserve their fat bonuses, their right to virtually no oversight and their ability to continue business as usual.

Anupama Narayanswamy at the Sunlight Foundation wrote of the Dodd-Frank Wall Street Reform and Consumer Protection Act, “The Wall Street reform bill was a mammoth undertaking, consisting of more than 2,300 pages, and requiring agencies to write a total of more than 240 new regulations. With 108 new rules due to be adopted this summer on the first anniversary of its enactment, and a dozen bills introduced by Republican members to repeal the bill in whole or in part, government-relations wings of the Wall Street banks and lobbying firms in Washington, D.C., have been busy.”

Bill Allison, also at Sunlight, reported, “Since passage of Dodd-Frank, federal agencies implementing the law have logged more than 2,100 meetings with interests aiming to influence the many new rules that Dodd-Frank requires, including 83 with executives and lobbyists for Goldman Sachs, 73 with JP Morgan Chase, 58 with Morgan Stanley and 55 with Bank of America.”

The banks also lobby through the American Bankers Association, which has spent $4.6 million this year alone on lobbyists, and the Financial Services Roundtable, which the New York Times’ Ben Protess describes as “a fellow trade group that represents 100 of the nation’s largest financial firms.” These two organizations and others helped fund the slew of lobbyists fighting to keep regulators from having much of an impact on the financial sector.

The vast army of lobbyists that represent the big banks in Washington include some former power brokers from Congress; former Democratic House Majority Leader Dick Gephardt, through his Gephardt Group, got $60,000 from Goldman Sachs to argue for their cause, which according to the Center for Responsive Politics, he did personally. John Breaux, former Democratic Senator from Louisiana, also lobbies for Goldman, and his partner in the Breaux Lott Leadership Group, Trent Lott, driven out of his position as Senate Minority Leader for comments that appeared to endorse Strom Thurmond’s segregationist campaign for president, represents both Goldman and Citigroup. (Citigroup paid them $180,000 for lobbying last year, and Goldman a full $300,000, as much as General Electric.)

The Gephardt Group took in $3.2 million just last year, from Boeing, Comcast, Sodexho and many more as well as Goldman Sachs, and Breaux and Lott pocketed nearly $6 million from clients ranging from Citigroup and Delta Airlines to AT&T and defense contractor Raytheon.

Bank of America and Wells Fargo both retain the services of the Podesta Group, run by well-known Washington insider Tony Podesta, who was a founder of People for the American Way. (Podesta's brother, John Podesta, is president of the Center for American Progress, an influential liberal DC think tank and a former Clinton chief of staff -- he also headed Obama's transition.) Wells Fargo paid the Podesta Group $340,000 in 2011, $100,000 more than Wal-Mart, another Podesta client.

While JPMorgan Chase’s lobbyist roster doesn’t have quite the pedigree of some of the others, it makes up for that in sheer spending power, having dropped $66,696,173 in lobbying dollars between 1998 and 2011. In total spending it still comes in second, though, behind Citigroup’s $82,350,000, handing it the crown for biggest spender as far as lobbying goes.

All together, the finance sector is the top spender on lobbying between the years of 1998 and 2011, according to the Center for Responsive Politics, having poured $4,631,844,938 into lobbyists’ pockets. $230,200,953 of that came directly from the five banks surveyed here.

And what did they get for all that money? Nomi Prins, a former managing director at Goldman Sachs and author of the new book Black Tuesday, explained to AlterNet:

“The Dodd-Frank Bill contains a slew of minor, cosmetic adjustments to the status quo manner in which the largest banks operate, and even they are being battled against by the financial industry lobbyists. The bottom line is that this bill does not fundamentally alter the structure of Wall Street - it does not separate banks cleanly, or in any other way remotely reminiscent of the Glass-Steagall Act of 1933, into commercial banks that deal with the basics of deposit and lending operations vs. investment banks that create dangerous and complex securities and leverage them into all manner of speculative activity.

She continued,

“Even though the bill calls for a consumer financial protection agency, it should be noted that such a department existed already within the Fed during the build-up to this crisis, that by virtue of political weakening and position within the Fed and political hierarchy was rendered ineffective in practice. The bill does not end the conflicts of interest and the revolving doors between the regulatory bodies and other key positions in Washington vs. those coming from, or going to, Wall Street.”

Revolving Door
Perhaps the most alarming aspect of the financial industry's influence on our political system is the extent to which financial insiders end up in positions where they're actually making policy.

The “revolving door” works both ways. According to Open Secrets, fully 74 percent of registered lobbyists for the finance and insurance industry previously worked in government, many of them for members of Congress sitting on committees that set banking regulations, or for the regulatory agencies that enforce them.

The nuts and bolts of legislation is crafted by Congressional staffers, and in the Senate, the Finance Committee (117) is second only to the Judicial Committee (119) in the number of staffers-turned-lobbyists or lobbyists-turned-staffers.

Building relationships as an elected official, regulator or legislative staffer can later bring rich financial rewards when one moves to the private sector. Economists Jordi Blanes Vidal, Mirko Draca and Christian Fons-Rosen tried to figure how much those relationships were worth in a 2010 study conducted for the Center for Economic Performance (PDF). Using disclosure forms, they looked at how former staffers-turned-lobbyists' income changed when their former bosses left Congress. The researchers found “evidence that the existence of a powerful politician to whom the lobbyist is connected is a key determinant of the revenue that he or she is able to generate... in other words, lobbyists are able to 'cash in on their connections,' since connections are an asset with a separate value to their experience, human capital or general knowledge of how government works.”

Specifically, they found that when a senator left office, their former staffers-turned-lobbyists saw their incomes drop by an average of 24 percent and when members of the House left office, their old staffers' incomes dropped by 10 percent. But those are the averages. They also found, “Consistent with the notion that lobbyists sell access to powerful politicians," that lobbyists lost more revenue if their departing ex-bosses were more senior and held powerful committee assignments.

As you can see in the graphic below, Citigroup leads through Congress' revolving door, followed by JPMorgan Chase, Bank of America, Wells Fargo and followed up by Goldman Sachs, according to Legistorm's database.

Lobbyists who worked for members of Congress or were themselves legislators
	20	Including Sanders Larsen Adu, former staff director of a House Financial Services subcommittee, Tim Keeler, former staffer on the Senate Finance Committee (Keeler has also lobbied on behalf of BofA and JP Morgan Chase, among others) and Chris Rosello, a former staffer on the House Financial Services Committee.
	81	Including former Senator John Breaux, D-Louisiana, who was a senior member of the Senate Finance Committee, and chairman of the Subcommittee on Social Security and Family Policy.
	72	Including former Rep. Rick Lazio, R-NY, who served as Deputy Majority Whip, Assistant Majority Leader, and chairman of the House Banking Subcommittee on Housing and Community Opportunity.
	39	Including, until recently, Senator Dan Coats, R-Indiana, who served in the Senate until 1999, retired to lobby his former colleagues and serve a stint as ambassador to Germany, and then returned to the Senate this year. The New York Times reported that Coats, lobbying for Cooper Industries, “served as co-chairman of a team of lobbyists in 2007 who worked behind the scenes to successfully block Senate legislation that would have terminated a tax loophole worth hundreds of millions of dollars in additional cash flow” for the company. Coats curently sits on the Joint Economic Committee.
	18	Including former Rep Dick Gephardt, D-Missouri and former Rep. Harold Ford, Sr., D-TN. Gephardt served as the House Majority leader; Ford sat on the House Banking Committee.

The revolving door between Wall Street and government doesn't just lead into and out of Congress. Consider the circuitous career path taken by former White House Chief of Staff Joshua Bolten. Bolten graduated with a law degree in the early 1980s, and between 1985 and 1989, he bounced between the Office of the U.S. Trade Representative, the law firm of O'Melveny & Myers, which represents Goldman Sachs -- and is a registered lobbyist for Citigroup, according to Legistorm ($$) -- and the Senate Finance Committee.

After a brief stint in the first Bush administration, Bolten went over to Goldman Sachs, where he served as executive director of legislative affairs for five years. Then he became policy director on George W. Bush's 2000 campaign. After the election, he worked his way up from assistant to the president to director of the Office of Management and Budget and, finally, to White House Chief-of-Staff, which some believe to be the second most powerful position in the government. In that role, he was credited with recruiting then-Goldman CEO Henry Paulson to head up the Treasury Department, where he would preside over the bank bailouts – much to Goldman's benefit. After leaving the White House, Bolten got a cushy sinecure as the John L. Weinberg/Goldman Sachs & Co. Visiting Professor at Princeton.

It's an exceptional career, but not an unusual story. Robert Rubin, Bill Clinton's Treasury Secretary, was vice-chairman at Goldman before helping to orchestrate the deregulation of just the kinds of complex financial instruments that took down the economy. After his stint at Treasury, Rubin landed at Citigroup, where he raked in $128 million over the course of eight years. In 2008, as the financial sector was teetering on the brink of collapse – and just after Citi had written down $24 billion in losses due in large part to, as Fortune put it, “greed, cynicism, and bad judgment” -- Rubin downplayed the mess he'd helped create, saying it was "all part of a cycle of periodic excess leading to periodic disruption." He blamed the crash “on just about everyone but the major U.S. financial players.”

The Obama White House is no exception to the rule. Last spring, Politico reported that Rubin, who “watched his reputation as an economic titan shatter after he left the Clinton White House...still wields enormous influence in Barack Obama’s Washington, chatting regularly with a legion of former employees who dominate the ranks of the young administration’s policy team.”

Lewis Alexander went from the Federal Reserve to the Commerce Department and then did a stint at Citi before returning to politics as a counselor at the Treasury Department, and Maura Solomon went from the Office of Thrift Supervision, one of the bank regulators, to Citigroup, where she is presumably better compensated. And so, of course, did Peter Orzsag. Jacob J. Lew, who replaced Orzsag at the Office of Management and Budget (an office he also held under President Clinton), spent his time between those appointments as executive vice president of New York University and then at Citigroup. Gary Gensler, a former assistant secretary of the Treasury who spent 18 years at Goldman Sachs, now oversees the Commodity Futures Trading Association.

According to the Project on Government Oversight (POGO), the Securities and Exchange Commission – the primary agency for policing the financial industry – is inundated with former bankers. POGO's database of lobbyists includes, “219 former SEC employees [who] filed 789 statements between 2006 and 2010 announcing their intent to appear before the SEC or communicate with its staff on behalf of private clients.”

"Many former SEC employees leave the agency to join [lobbying] firms that represent clients in the securities industry. Several recent reports by the SEC Inspector General have raised troubling questions about whether the promise of future employment representing Wall Street causes some SEC officials to treat potential employers and their clients with a lighter touch."

Social Costs
Does anyone need to be reminded how the big banks broke the economy and then pocketed billions of tax dollars in bailouts? Have people already forgotten Henry Paulson (Treasury Secretary, 2006-2008; Goldman Sachs, 1974-2006) standing before Congress and demanding $700 billion in nearly oversight-free money to buy up the banks’ “toxic assets”—which were, of course, bad mortgages packaged into securities that were suddenly worthless. The bailouts received bipartisan support, and Obama pressed for the passage of what eventually became TARP, proving the value of those bipartisan campaign donations.

Perhaps you are underwater on your mortgage because of the crash in home values after the popping of the housing bubble, which was created by the insatiable need for profits, for more mortgages to package into securities to sell on the market. Perhaps you’re dealing with Bank of America or another one of the banks that are still unwilling to modify the majority of mortgages, continuing to foreclose on homes and throw families out.

Or perhaps you rent, but are unemployed. Perhaps you have a job but haven’t seen a raise since the crash, or have been pressured to put in more hours. The core problem in the brick-and-mortar economy is a lack of demand, and that drop in demand is a result of the $14 trillion in household wealth lost in the crash that Wall Street’s gamblers precipitated -- from stocks and bonds, real estate values and retirement accounts. The popping of the housing bubble alone and the corresponding drop in home values, according to Dean Baker, creates the loss of some $8 trillion in wealth, or $110,000 per homeowner.

The size of the financial industry alone is worrisome. As Katrina vanden Heuvel pointed out at the Washington Post, “Obama has said that we can't go back to an economy where the banks make 40 percent of all corporate profits. But the big banks are emerging from the crisis more concentrated than ever, and financial sector profits are already up to nearly 30 percent of total corporate profits.” Banking, like trucking, is known as an “intermediary good” -- nothing is produced by the industry – and if any other intermediary good represented around 10 percent of the U.S. economy, people would consider that a major problem.

To create those complex financial instruments, finance has begun to cannibalize the “best and brightest” college graduates--or at least those looking for the fattest paychecks, whether purely out of greed or a need to pay off heavy student loan burdens (often owed to the same banks).

Pat Garofalo at Think Progress noted that “The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JPMorgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.” Not only that, but he also pointed out that the five banks we’ve tracked here are the ones that control 95 percent of the derivatives in the country--the complex financial instruments that investor Warren Buffet called “financial Weapons of Mass Destruction.”

Perhaps the most pernicious effect of Wall Street’s influence is yet to come. By watering down or killing off new regulations designed to prevent the next bubble-induced meltdown, they imperil future generations’ prosperity just as they did when they lobbied hard to kill financial regulations in the 1990s--resulting in, to give one example, the passage of the Commodity Futures Modernization Act in 2000, which kept derivatives and credit default swaps unregulated and allowed the banks to keep gambling without oversight.

The banks have simply gotten too powerful; ”too big to fail” has become too big to regulate. Yet, even as they grow, spend on lobbying and campaigns and institute fees, they represent a giant ticking time bomb at the heart of our economy.

It can be difficult to gauge which of the big banks has had the greatest negative impact on society, as so many of the problems were created by the combined practices of the entire industry. Bank of America stands out for its sheer size. It is the country’s biggest bank, controlling 12 percent of the nation’s deposits, and 20 to 25 percent of the mortgage market (and a huge chunk of its mortgage fraud as well). While it continues to face lawsuit after lawsuit for fraudulently selling securities -- from both the government and private companies -- its plummeting stock price is bringing it ever closer to collapse. What’s the endgame if America’s largest bank runs out of money? If ever a bank was too big to fail, it is Bank of America.

Robert Kuttner, co-founder of the American Prospect, wrote of the prospect of the giant going under:

"Worst of all would be to let a large institution like Bank of America just fail. Outside of the hard-core Tea Party right, nobody supports this.

"The second worst policy would be to just keep throwing money at a zombie institution to keep up the pretense that it is solvent. We tried that policy in 2008 and 2009. It helped entrenched bankers keep their jobs and their outsized profits, but a wounded banking system continued to be a lead weight on the rest of the economy."

Bank of America is no doubt the biggest lead weight on the economy right now, and its zombie status keeps everyone wondering what the endgame will be. One of the things that was included in the Dodd-Frank bill was a provision that would allow the FDIC to take failing banks into receivership, seize them, break them up and reorganize them. The question is, will an administration that’s proven unwilling to make any serious changes to the financial industry take that step? Or will it instead bail out BofA yet again -- a step that Kuttner warns could be a political and economic disaster.

Even with all this, it's hard to rank the banks in this category. Citigroup just last weekend had 24 people arrested for criminal trespass in New York City when they attempted to close out their accounts, and is hiking fees while its profits soar. JPMorgan's purchase of the failing Washington Mutual was nearly as toxic as Bank of America's purchase of Countrywide, taking over more fraudulent loans. Goldman Sachs has tentacles in absolutely everything; Wells Fargo has some of the worst predatory lending practices to people of color. It's clear that the social costs of the banking industry as a whole are simply too big to bear.

And the Winner Is...

Ranking of 'Worst' Mega Banks in Political Corruption
	Campaign Contributions	Lobbying	Revolving Door	Negative Social Costs	"Worst" Score
Citigroup	2	1	1	2	18
JP Morgan Chase	3	2	2	3	14
Bank of America	4	3	3	1	13
Goldman Sachs	1	4	5	4	10
Wells Fargo	5	5	4	5	5
A bank gets 5 points for being the 'worst' in a category, 4 for second worst, etc.

Ranking the big banks isn’t an easy task. Sure, it’s easy enough to add up the size of the bailouts and the amount spent on campaign donations, or the number of people who’ve spun through the revolving door. It’s harder to gauge the impact on millions of people as the economy collapsed and continues to sputter. And the story of lobbyists and well-placed former employees isn’t just one of numbers, but of influence and success.

Still, when we looked at all of our research, there was one bank that came in first in two categories, and second in another. That bank is Citigroup. It was the clear winner in lobbying spending with $82,350,000, has the most former politicians, executives and lobbyists spinning through its revolving door, and followed only Goldman Sachs in terms of measurable campaign donations.

It’s the current employer of former Office of Management and Budget chief Peter Orszag and former employer of ex-Treasury Secretary Robert Rubin, the donor of nearly $17 million to campaigns Republican and Democratic, and the recipient of $45 billion in TARP funds.
Of course, one could make an argument for nearly every bank on this list. Goldman Sachs far outspends the others on campaign donations, and Citi might have won the overall lobbying spending race but has been outspent in the past few years by JPMorgan Chase--by nearly $3 million. And Bank of America’s snowballing legal troubles seem evidence enough of malfeasance.

What is clear, any way you slice it, is that the big banks have far too much influence over our politics, and it has enabled them to gain far too much influence over our entire economy.

We are living with the results: real unemployment in the double digits, falling incomes, skyrocketing debt. What can we do about it? With the banks’ deep connections to both parties in Washington, it has long seemed that reining them in is an uphill battle. Yet Wall Street appears to have over-reached, and we're now seeing the blow-back as tens of thousands of people join the Occupy Movement in cities and towns across the country and across the world. Americans are tired of the reign of the big banks, and they're coming together to do something about it. People are moving their money to credit unions, they're fighting to keep families in their homes and they're taking their anger directly to the Titans of Wall Street. Most importantly, they're building a people-powered movement to hold the banks accountable, and if history is any guide, once united in a cause, the American people usually win.

The Tea Party and Goldman Sachs: A Love Story

Wednesday, July 6, 2011 by TruthDig.com
by Robert Scheer

Face it. We live in two nations, sharply divided by an enormous economic chasm between the super-rich and everyone else. This should be an obvious fact of life for most Americans. Just read the story in Tuesday’s Wall Street Journal headlined “Profits Thrive in Weak Recovery.” Or the recent New York Times story pointing out “that the median pay for top executives at 200 big companies last year was $10.8 million,” a 23 percent gain over the year before.

In the midst of a jobless recovery, those same corporations are sitting on more than $2 trillion in reserves, refusing to invest in this country, as increasing percentages of their profits are garnered in tax-sheltered operations abroad. And the bankers who caused the economic meltdown have turned against President Barack Obama, who saved them; instead they favor a tea-party-dominated Republican Party that seeks to limit any restraint on corporate greed while destroying the ability of state and federal governments to bring some measure of relief to ordinary folk.

The whole point of the tea party is to focus concern over our stagnant economy on something called “big government” while ignoring the big corporations that have bought the government as an accessory to their marketing strategies. Big government is big precisely because it now exists primarily to make the world safe for multinational capitalism, whether through a bloated defense budget, trade pacts like the North American Free Trade Agreement, or monetary policies that serve the interests of the largest companies.

It was their lobbyists who got Congress to end sensible regulations of financial shenanigans, and now, with the new tea party members of Congress as their most stalwart allies, they are yanking the teeth from the very mild regulations that Obama got through the last Congress. As The Associated Press reported: “Congressional Republicans are greeting the one-year anniversary of President Barack Obama’s financial overhaul law by trying to weaken it, nibble by nibble.”

It is nothing short of demagogic for the Republicans to be complaining about the debt when it was the radical deregulatory policies that they pursued which caused all that governmental red ink in the first place. What a hoax to pretend that teachers’ pensions or environmental protections are responsible for a debt that increased by 50 percent as a direct consequence of the banking collapse. Yet they want to gut even the tepid regulations that became law under the Obama administration, foaming at the mouth about sensible regulation as job killing when it is the uncontrolled greed of Wall Street that is at the root of our high unemployment.

Congressional Republicans are cutting funding for the Securities and Exchange Commission and the Commodity Futures Trading Commission as if those already underfunded agencies are centers of anti-business radicalism. The CFTC is run by former Goldman Sachs partner Gary Gensler, who, back when he was in the Clinton Treasury Department serving under another onetime Goldman leader, Robert Rubin, teamed up with Republicans in Congress to gut financial regulation. He is one of the Obama regulators who has managed to delay even the minor controls that the Dodd-Frank law requires for the still wildly out-of-control $600 trillion derivatives market.

What a joke that the tea party assertion that radicals have taken over the Obama government is embraced even by lobbyists for Goldman Sachs, whose former executives have populated the Obama administration as widely as they did the two previous administrations. All they are missing this time around is that they didn’t get to have one of their own named as treasury secretary, as was the case in both the Clinton and Bush cabinets.

This week, the Los Angeles Times reported on Goldman’s renewed lobbying efforts in Washington aimed at watering down what remains of the promise of Dodd-Frank. True to Washington tradition, Goldman has hired Michael Paese, a former top staffer for the “liberal” Rep. Barney Frank to head its Washington operation, which last year spent $4.6 million lobbying Congress to soften the bill, a task now made far easier with Goldman’s tea party allies in the new Republican-dominated House. As the Times noted, “Goldman has spent much of its money on hired guns from major Washington lobbying firms, including former Senate Majority Leader Trent Lott (R-Miss.) and former House Minority Leader Richard A. Gephardt (D-Mo.).”

Between the faux populism of the tea party and the army of sellout ex-congressional staffers and politicians from both parties, the Washington fix is in. Short of hitting it big on a lottery ticket, the vast majority of Americans are sentenced to a future of lowered expectations, insurmountable personal debt and dismal job prospects.

They may not know it, however, thanks to the constant propaganda from a corporate culture dominated by images of a classless nation in which all consume the delights of the American dream, from the perfect smartphone to the perfect pill for bladder control, while merrily hacking away on the perfectly manicured golf course of one’s fantasies.

How Corporations Buy Access to Power

By BooMan, BooMan Tribune
Posted on June 29, 2011

I think you can imagine how a major bank/investment firm like Goldman Sachs can gain access to power. They obviously can make or withhold campaign contributions. They can throw money into political action committees that go after politicians who want to mess with them. They also can offer politicians lucrative six or seven figure jobs should they ever fail to win reelection or want to retire from public service. They can use their pull to get their employees hired by the government.

They can hire their regulators. There are many ways that rich Wall Street bankers can assure that Washington DC will let them do pretty much anything they want to do, even if it's harmful to the country. But, sometimes, they don't need to do anything.

Oversight Committee Chairman Rep. Darrell Issa (R-CA) raised hell last year to stop the federal government from investigating Goldman Sachs regarding allegations that the company defrauded investors. In April 2010, shortly after the Securities and Exchange Commission (SEC) announced a civil suit against Goldman Sachs, Issa sent a letter to SEC Chairwoman Mary Schapiro demanding to know if there was “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats over the timing of the lawsuit.

Issa’s investigation of the SEC’s investigation into Goldman Sachs stole the headlines and reinforced Goldman Sach’s claim that they had done nothing wrong. Explaining his defense of Goldman Sachs, Issa said he was representing the views of ordinary Americans who are worried about the “growth of government and the growth of government wanting to become more complex, with more agencies and more control over our lives.”

However, recent personal finance disclosures reviewed by ThinkProgress paint a different picture of Issa’s motivations. According to documents filed recently with the House Clerk, Issa went on a buying spree of high yield Goldman Sachs bonds at the same time he was running defense for the investment bank in Congress. From February to December of 2010, Issa bought 12 Goldman Sachs High Yield Fund Class A bonds, each worth up to $50,000 (view page 10 the disclosure here). Many of the bonds were purchased in the months after he filed his letter to the SEC. The $600,000 in new Goldman Sachs investments added to Issa’s already multimillion dollar stake in the company, valued from $5.1 to $15.5 million.

I'm not going to harp on Rep. Darrell Issa. He's merely one of the more obvious examples of politicians who use their insider knowledge and power to enrich themselves. Any political system is going to have more than a handful of characters like Darrell Issa. It's human nature.

This problem extends well into the Democratic Party as well (see, for example, Evan Bayh). The problem we have in this country is that, unlike in Greece, the people are not inclined to threaten to string Darrell Issa and his Goldman Sachs benefactors up by the balls. The lack of any credible counter-pressure allows our politicians to rip us off on a daily basis. In fact, people are getting ripped off in Greece despite their more active protestations. This is the way the world is structured.

Money talks, and the rest can usually be safely treated as bullshit. The Supreme Court has been on a rampage over the last two years in solidifying this situation by gutting all efforts to rein in the influence of corporate money on our governments.

At this point, progressivism is under assault and is being weakened steadily. It's enough to discourage almost anyone. But there is a backlash growing. We have to nurture that backlash.

WikiLeaks Expose Corporatism Dominating American Diplomacy

One of WikiLeaks' greatest achievements has been to expose the exorbitant amount of influence that multinational corporations have over Washington's diplomacy.

By Rania Khalek, AlterNet
Posted on June 22, 2011

One of the most significant scourges paralyzing our democracy is the merger of corporate power with elected and appointed government officials at the highest levels of office.  Influence has a steep price-tag in American politics where politicians are bought and paid for with ever increasing campaign contributions from big business, essentially drowning out any and all voices advocating on behalf of the public interest. 

Millions of dollars in campaign funding flooding Washington's halls of power combined with tens of thousands of high-paid corporate lobbyists and a never-ending revolving door that allows corporate executives to shuffle between the public and private sectors has blurred the line between government agencies and private corporations.  

This corporate dominance over government affairs helps to explain why we are plagued by a health-care system that lines the pockets of industry executives to the detriment of the sick; a war industry that causes insurmountable death and destruction to enrich weapons-makers and defense contractors; and a financial sector that violates the working class and poor to dole out billions of dollars in bonuses to Wall Street CEO's.

The implications of this rapidly growing corporatism reach far beyond our borders and into the realm of American diplomacy, as in one case where efforts by US diplomats forced the minimum wage for beleaguered Haitian workers to remain below sweatshop levels.

In this context of corporate government corruption, one of WikiLeaks' greatest achievements has been to expose the exorbitant amount of influence that multinational corporations have over Washington's diplomacy. Many of the WikiLeaks US embassy cables reveal the naked intervention by our ambassadorial staff in the business of foreign countries on behalf of US corporations. From mining companies in Peru to pharmaceutical companies in Ecuador, one WikiLeaks embassy cable after the next illuminates a pattern of US diplomats shilling for corporate interests abroad in the most underhanded and sleazy ways imaginable.

While the merger of corporate and government power isn't exactly breaking news, it is one of the most critical yet under-reported issues of our time. And WikiLeaks has given us an inside look at the inner-workings of this corporate-government collusion, often operating at the highest levels of power. It is crystal clear that it's standard operating procedure for US government officials to moonlight as corporate stooges. Thanks to WikiLeaks, here are instances that display the lengths to which Washington is willing to go to protect and promote US corporations around the world.

1. US officials work as salespeople for Boeing. The merger of state and corporate power is striking in a slew of cables detailing US State Department officials acting as marketing agents on behalf of one lucky corporation. Earlier this year the New York Times revealed details about how US diplomats have actively promoted the sale of commercial jets built by the US company Boeing.

Hundreds of cables from WikiLeaks show that Boeing had a sales force of US diplomats that went up to the highest levels of government, even going as far as sabotaging sales for Boeing's European rival Airbus. Enticing deals for the jetliners were offered to heads of state and airline executives in Saudi Arabia, Bahrain, Jordan, Turkey and other countries. The WikiLeaks documents also suggest that demands for bribes, or at least payment to suspicious intermediaries, still take place.

In a deal that was valued at about $3.4 billion, the US Embassy in Istanbul pushed for the sale of Boeing jetliners to Turkish Airlines (THY), according to a  cable from January 2010. In return, the president of Turkey asked the Obama administration to let a Turkish astronaut sit in on a NASA space flight.

The most puzzling and ironic tidbit in the cable is the US ambassador's bewilderment at the "conflation of USG-GOT interactions and what is ostensibly a commercial sale between private firms," which he complains is "an unwelcome, but unsurprising degree of political influence in this transaction." The accusation that inappropriate political influence exists among the Turkish government and a private airline is laughable considering that the US State Department is the one pitching the sale on behalf of a private firm.

The cable goes on to say, “We probably cannot put a Turkish astronaut in orbit, but there are programs we could undertake to strengthen Turkey’s capacity in this area that would meet our own goals for improved aviation safety. In any case, we must show some response to the minister’s vague request if we want to maximize chances for the sale.”

In November of last year, Saudi Arabia announced a deal with Boeing to buy more than $3.3 billion worth of airliners, a deal that WikiLeaks reveals was preceded by years of intense lobbying by American officials of the highest order.

In late 2006, then President George W. Bush wrote a personal letter he had hand-delivered to King Abdullah of Saudi Arabia, practically begging the king to buy as many as 43 Boeing jets to modernize Saudi Arabian Airlines and 13 jets for the Saudi royal fleet.

King Abdullah responded by asking the US government and President Bush to trick out his private airplane with the same high-tech equipment used on Air Force One. He hinted that if the US fulfilled his request, he would make a large purchase of Boeing planes for the royal family's fleet and Saudi Arabian Airlines. And lo and behold, King Abdullah got his airplane upgrade, and Boeing made billions.

A cable from early 2008 details a plan that successfully sabotaged an Airbus sale. In December 2007, the Bahrain-owned airline Gulf Air announced plans to buy a new fleet of Airbus planes. Boeing officials alerted the State Department, which immediately intervened urging them to buy from Boeing instead. Following months of intense lobbying by the ambassador, the crown prince and king of Bahrain agreed to kill the Airbus purchase. They ordered Gulf Air to reopen negotiations with Boeing, ultimately winning the deal valued at $6 billion, which was signed while President Bush was visiting Bahrain.

2. US diplomats by day — Monsanto the devil henchmen by night. Boeing isn't the only multi-billion-dollar corporation US diplomats have been shilling for. In a cable from late 2007, former ambassador to France, Craig Stapleton, advised Washington to launch a military-style trade war against any European Union country that opposed genetically modified (GM) crops.

"Country team Paris recommends that we calibrate a target retaliation list that causes some pain across the EU since this is a collective responsibility, but that also focuses in part on the worst culprits. The list should be measured rather than vicious and must be sustainable over the long term, since we should not expect an early victory," he wrote.

Stapleton was reacting to efforts by France to ban a Monsanto the devil GM corn variety. He specifically asked Washington to punish the EU countries that did not support the use of GM crops.

"Moving to retaliation will make clear that the current path has real costs to EU interests and could help strengthen European pro-biotech voices."

An embassy cable from 2009 written by the ambassador to Spain directly cites meetings with Monsanto the devil executives, showing that US diplomats were taking orders directly from GM companies.

Monsanto the devil's director for biotechnology for Spain and Portugal briefed embassy officials about the region, complaining that "Spain is increasingly becoming a target of anti-biotechnology forces within Europe. If Spain falls, the rest of Europe will follow."

In a random insult thrown into the cable, the ambassador says, "Within the agriculture sector, only left-wing farmers' unions have negative opinions of GMOs."

The cable ends with a dramatic call for intervention by the US government on behalf of Monsanto the devil:  "ACTION REQUESTED: In response to recent urgent requests by [Spanish rural affairs ministry] State Secretary Josep Puxeu and Monsanto the devil, post requests renewed US government support of Spain's science-based agricultural biotechnology position through high-level US government intervention."

3. Pharmaceuticals + US diplomats = best friends forever. In October 2009, Ecuador's President Rafael Correa issued a decree to improve access to medicines and support public health programs through a protocol that would reduce drug costs. Cables from US embassy personnel in Ecuador to the U.S. Department of State show the United States, multinational pharmaceutical companies, and three ministers within the government shared information and worked to undermine Ecuador's emerging policy.

In a cable dated October 13, 2009, before the decree was issued, the US ambassador was troubled by Correa's plans because it would prioritize local production and eliminate pharmaceutical patents. In other words, Ecuador was about to makes changes that would negatively impact the profits of US pharmaceutical companies.

Immediately following word of Correa's plans, the US embassy staff met with local representatives of US pharmaceutical companies Pfizer, Merck, Sharp and Dohme, Scering-Plough, and Wyeth to share strategies that would prevent or limit Ecuador's licensing changes.

US concerns intensified as revealed by a cable written days later, which refers to meetings with "well-placed contacts" with "potentially sympathetic ministries." In what sounds like attempted blackmail, Minister of Health Caroline Chang -- one of the "well-placed contacts" described as an ally — assured multinational pharmaceuticals that she was looking into financial irregularities and business dealings of some of the local producers with the intent of gaining some leverage.

Despite efforts to undermine Ecuador’s access protocol, Ecuador issued its first compulsory license in April 2010, enabling generic imports of the HIV/AIDS drug ritonavir.

4. Washington 'hearts' abusive mining companies in Peru. From Bolivia to Venezuela to Peru, American diplomats are obsessed with securing the profits of multinational mining corporations at the cost of indigenous rights and the environment. At least that is the impression given by WikiLeaks cables that detail the eruption of anti-mining protests near the Ecuador border against the mining firm Minera Majaz.

In August 2005, a group of protesters in northern Peru marched to the site of a copper mine operated by the firm Minera Majaz, a subsidiary of the British mining company Monterrico Metals. Of the hundreds of people who converged at the mine site from the surrounding communities, 28 were brutally tortured and three were shot, one of whom bled to death. 

But you wouldn't know this from the WikiLeaks US embassy cables that describe the protests. The tone is one of sympathy for the mining company, while depicting the protesters as dark and sinister "militant anti-mining protesters" maliciously sabotaging Majaz.

In a cable following the protests, J. Curtis Struble, the former US ambassador to Peru, toes the Majaz line that communists and unions were to blame for sowing the seeds of rebellion, an accusation that reeks of Washington's typical red-baiting of anything opposed to abusive corporate practices in the developing world.

"The anti-mining forces in action in Majaz represent a strange group of bedfellows indeed -- the Catholic church, violent radical leftists, NGOs, ronderos and perhaps narcotraffickers. Working behind the scene are a combination of the Peruvian Communist Party/Patria Roja, national teachers, union SUTEP and perhaps opium poppy traffickers," says Struble.

Struble's glowing profile of the mining company reads: "Majaz has spent $20 million exploring for copper for over a year, building roads and providing services and employment to area residents. Militants still deny access to most of the pipeline route."

Not once does Struble acknowledge the long history of devastation that mining companies have caused throughout the region, such as pollution of the local water supply and land, the use of brutal paramilitaries in assassinating indigenous leaders who challenge them, or the displacement caused by theft of indigenous lands.

Just days after the blatant human rights violations committed against the protesters, another cable reveals that the US and Canadian ambassadors hosted a meeting with representatives from several international mining companies in Peru. Struble expresses his plan to reinforce security in the mines, to avoid the closing of highways by demonstrators which would disrupt commerce, and to encourage the Peruvian government to prosecute the protesters.

5. Diplomats as corporate spies. A more recent US embassy cable dated March 17, 2008, reveals that US diplomats spied on indigenous activists and their supporters who were organizing anti-summit protests against the European Union-Latin American Heads of State summit that was scheduled in Lima that year.

US ambassador to Peru James Nealon identified specific indigenous activists and tracked the involvement of Bolivian President Evo Morales, Venezuelan President Hugo Chavez, Bolivia Ambassador Pablo Solon, prominent Quechua activist Miguel Palacin Quispe and other influential community leaders. 

What do all these people have in common? Their unwavering support for indigenous rights and the environment along with their successful organizing tactics and popularity among indigenous populations, which has Washington's corporate masters shaking in their boots.

Nealon describes the anti-summit groups as "a variety of radical Peruvian social movements and European anti-globalization NGOs," citing specific peasant and indigenous groups along with the names of prominent organizers who the US embassy was keeping tabs on. The cable is riddled with insulting references to Venezuela's Hugo Chavez and Bolivia's Evo Morales, particularly Morales and his supporters. One Bolivian social leader is described as a "pro-Morales ideologue" and another as a "top Evo Morales adviser and anti-free trade and globalization guru."

In almost all of the Peru cables, the US government interprets the enemies of corporate power as being enemies of the United States. As a result, leftist activists and community organizers, particularly those who  threaten corporate profits, are regularly targeted. Unions, environmentalists and indigenous communities that challenge multinationals are consistently regarded with disdain and viewed as hostile villains. The US government's propensity at conflating threats to corporate interests as threats to US interests should alarm anyone who values democracy.

What don't we know about?
Besides getting a good laugh at watching pathetically corrupt diplomats whore themselves out to corporate executives, these cables give us a rare glimpse at American diplomatic subservience to corporate behemoths regardless of the costs to people and the environment.
It appears that the collusion between corporate executives and US diplomats is taking place at an ever accelerating rate around the globe, yet more and more, these shady endeavors are shrouded in secrecy. Transparency and accountability have taken such a devastating blow over the past decade, that whistleblowers and media outlets such as WikiLeaks are the only mechanisms left still capable of shedding light on the consequences of the unbridled corporate influence infecting our government.

With tens of thousands of WikiLeaks embassy cables still waiting to be published, there’s sure to be hundreds if not thousands of episodes involving US corporate and government collusion that have yet to be discovered.