Bank of America, Bailout in Hand, Continues Lobbying Efforts
WASHINGTON - As Bank of America faces intensifying congressional oversight during the nation's worst economy since the Great Depression, the company has spent more than $1.5 million lobbying on Capitol Hill.
Bank of America. the recipient of $45 billion in taxpayer bailout money from the federal Troubled Asset Relief Program, has worked to sway lawmakers on more than two dozen pieces of legislation in both the House and Senate.
The Charlotte, N.C., company wants flexibility on spending the bailout funds and also wants to fend off restrictions on executive compensation, home mortgage lending and credit card fees.
The bank also is lobbying on a consumer rights bill, on student lending issues, on a bill that would've allowed bankruptcy judges to alter mortgages and on a proposed federal regulatory oversight agency.
Bank of America's lobbying spending since January pales next to the $2.3 million it spent in the first half of 2008.
"We're cutting expenses across the company, including lobbying expenses," said Bank of America spokeswoman Shirley Norton.
It hasn't said when it plans to pay the TARP money back, though Chief Executive Ken Lewis told analysts last week that he hopes it would be "sooner rather than later."
The company spent $800,000 on lobbying from April to June, according to its own records filed with the U.S. Senate. That's up from $660,000 in the first three months of the year.
Norton said that number increased because the company did more internal analysis of the various issues in Washington.
According to Senate records, outside lobbying firms hired by Bank of America spent $60,000 in the second quarter, down from $90,000 in the first three months.
Critics say that until the bank and other financial institutions repay taxpayers' money from TARP funds, they should steer clear of spending money to spread influence.
"They should not be allowed to lobby," said Craig Holman, a government affairs lobbyist for Public Citizen, a nonprofit advocacy group that accepts neither public nor corporate dollars.
"As long as they hold on to a very substantial portion of public funds, and are publicly owned essentially, they should not be using any of their funds for lobbying purposes or campaign contributions," Holman said. "And you'll find Bank of America is doing both."
The bank and its employees have given $127,000 in campaign contributions in the first half of this year, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political spending.
Other financial institutions receiving TARP funds also are lobbying federal lawmakers. Among them, Citigroup spent $3 million so far this year, and Goldman Sachs spent $1.3 million.
Norton, the spokeswoman, said the bank's accountants keep taxpayer funding separate from the private dollars it uses on lobbying expenses.
"We don't use TARP funds," Norton said. "We're very sensitive to the issue of using government funds."
Bank of America and Lewis have come under repeated fire from Washington recently.
Senators questioned Lewis about executive compensation and whether he is doing enough to get loans out the door at Bank of America.
This spring, a House oversight panel began investigating the bank's $50 billion purchase of Merrill Lynch, which closed last winter, probing whether Lewis was wrongly threatened over the pending deal or whether he improperly withheld information from shareholders.
Last week, Bank of America reported second-quarter profits of $2.4 billion - its second straight profitable quarter - despite ongoing losses from failed loans.