September, 14 2009, 03:23pm EDT
Financial Industry Spends Big As Obama Pushes for Regulatory Reform
WASHINGTON
On the one-year anniversary of the collapse of Lehman Brothers,
President Obama's proposed overhaul of financial regulations faces
fierce opposition from the securities and investment industry, which is
spending furiously on lobbying Congress and on campaign contributions.
For the first six months of 2009, the financial industry spent $42
million lobbying Congress, as Obama pushes for reforms that would
better monitor the financial system and the products that banks and
other institutions sell to consumers with the goal of avoiding future
economic meltdowns like the one that plunged the United States deep
into recession.
The most vocal opposition to financial regulation reform is the U.S.
Chamber of Commerce, which has focused specifically on a proposed
Consumer Financial Products Agency (CFPA) meant to oversee financial
products such as subprime mortgages.
Like health care or climate change, reform of the financial system in
the wake of the economic meltdown is defined largely by a single
proposal that is fiercely opposed by industry. National polls have
demonstrated widespread support for better regulation of financial
products after the explosion of risky subprime mortgages bankrupt
Lehman Brothers and nearly brought down the entire banking system. As
President Obama delivers his address today, the industry is spending an
average of more than $250,000 a day in lobbying and advertising to kill
the proposed Consumer Financial Products Agency and other reforms.
"Practically every proposal in the President's reform agenda - from
health care to climate change to financial regulation - is under attack
from industries that are pouring money into campaign contributions,
lobbying and advertising campaigns," said Common Cause President Bob
Edgar. "Great speeches are no match for the bottomless pockets of big
corporations looking to kill reform legislation."
In addition to lobbying and advertising, the securities and investment
industry has given more than $14 million in campaign contributions this
year, on top of the $156 million it gave during the last election
cycle, according to data from the Center for Responsive Politics.
Because the Democrats control Congress, nine of the top ten recipients
of securities money so far this year are Democrats:
Candidate | Amount |
Schumer, Charles E (D-NY) | $678,700 |
Gillibrand, Kirsten (D-NY) | $347,600 |
Reid, Harry (D-NV) | $336,450 |
Dodd, Chris (D-CT) | $209,112 |
Murphy, Scott (D-NY) | $155,050 |
Bennet, Michael F (D-CO) | $143,655 |
Himes, Jim (D-CT) | $139,386 |
Dorgan, Byron L (D-ND) | $118,250 |
Wyden, Ron (D-OR) | $105,400 |
Cantor, Eric (R-VA) | $98,100 |
Source: Center for Responsive Politics (www.opensecrets.org)
Any industry may soon also be able to spend similar amounts on
advertising campaigns in support of specific candidates who support
their position, as the U.S. Supreme Court is considering striking down
restrictions on direct political advocacy by corporations. The Supreme
Court will likely issue a ruling this year in Citizens United v. Federal Elections Commission on whether industries are allowed to spend unlimited amounts on candidates like they do on specific issues.
"We are going in the wrong direction lifting limits on corporate
spending," said Edgar. "President Obama came into power with a mandate
for reform, but it seems corporate industries can fight back almost any
public desire for change by spending enough money on lobbying and
campaign contributions."
Common Cause is a nonpartisan, grassroots organization dedicated to upholding the core values of American democracy. We work to create open, honest, and accountable government that serves the public interest; promote equal rights, opportunity, and representation for all; and empower all people to make their voices heard in the political process.
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Critics Blast 'Reckless and Impossible' Bid to Start Operating Mountain Valley Pipeline
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Mountain Valley Pipeline LLC sent a letter Monday to Federal Energy Regulatory Commission (FERC) Acting Secretary Debbie-Anne Reese seeking final permission to begin operation on the MVP next month, even while acknowledging that much of the Virginia portion of the pipeline route remains unfinished and developers have yet to fully comply with safety requirements.
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On Monday, climate and environmental defenders also petitioned the U.S. Court of Appeals for the D.C. Circuit, challenging FERC's approval of the MVP's planned Southgate extension, contending that the project is so different from original plans that the government's previous assent is now irrelevant.
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Others renewed warnings about the dangers MVP poses to wildlife.
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U.S. workers' rights advocates and groups celebrated on Tuesday after the Federal Trade Commission voted 3-2 along party lines to approve a ban on most noncompete clauses, which Democratic FTC Chair Lina Khansaid "keep wages low, suppress new ideas, and rob the American economy of dynamism."
"The FTC's final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market," Khan added, pointing to the commission's estimates that the policy could mean another $524 for the average worker, over 8,500 new startups, and 17,000 to 29,000 more patents each year.
As Economic Policy Institute (EPI) president Heidi Shierholz explained, "Noncompete agreements are employment provisions that ban workers at one company from working for, or starting, a competing business within a certain period of time after leaving a job."
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The U.S. Chamber of Commerce has suggested it plans to file a lawsuit that, as The American Prospectdetailed, "could more broadly threaten the rulemaking authority the FTC cited when proposing to ban noncompetes."
Already, the tax services and software provider Ryan has filed a legal challenge in federal court in Texas, arguing that the FTC is unconstitutionally structured.
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Morgan Harper, director of policy and advocacy at the American Economic Liberties Project, praised the FTC for "listening to the comments of thousands of entrepreneurs and workers of all income levels across industries" and finalizing a rule that "is a clear-cut win."
Demand Progress' Emily Peterson-Cassin similarly commended the commission "for taking a strong stance against this egregious use of corporate power, thereby empowering workers to switch jobs and launch new ventures, and unlocking billions of dollars in worker earnings."
While such agreements are common across various industries, Teófilo Reyes, chief of staff at the Restaurant Opportunities Centers United, said that "many restaurant workers have been stuck at their job, earning as low as $2.13 per hour, because of the noncompete clause that they agreed to have in their contract."
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One plaintiffs' attorney said the ruling "makes our democracy better and ensures that North Carolina is not able to unjustly criminalize innocent individuals with felony convictions who are valued members of our society."
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Democracy defenders on Tuesday hailed a ruling from a U.S. federal judge striking down a 19th-century North Carolina law criminalizing people who vote while on parole, probation, or post-release supervision due to a felony conviction.
In Monday's decision, U.S. District Judge Loretta C. Biggs—an appointee of former Democratic President Barack Obama—sided with the North Carolina A. Philip Randolph Institute and Action NC, who argued that the 1877 law discriminated against Black people.
"The challenged statute was enacted with discriminatory intent, has not been cleansed of its discriminatory taint, and continues to disproportionately impact Black voters," Biggs wrote in her 25-page ruling.
Therefore, according to the judge, the 1877 law violates the U.S. Constitution's equal protection clause.
"We are ecstatic that the court found in our favor and struck down this racially discriminatory law that has been arbitrarily enforced over time," Action NC executive director Pat McCoy said in a statement. "We will now be able to help more people become civically engaged without fear of prosecution for innocent mistakes. Democracy truly won today!"
Voting rights tracker Democracy Docket noted that Monday's ruling "does not have any bearing on North Carolina's strict felony disenfranchisement law, which denies the right to vote for those with felony convictions who remain on probation, parole, or a suspended sentence—often leaving individuals without voting rights for many years after release from incarceration."
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"It also makes our democracy better and ensures that North Carolina is not able to unjustly criminalize innocent individuals with felony convictions who are valued members of our society, specifically Black voters who were the target of this law," Brown added.
North Carolina officials have not said whether they will appeal Biggs' ruling. The state Department of Justice said it was reviewing the decision.
According to Forward Justice—a nonpartisan law, policy, and strategy center dedicated to advancing racial, social, and economic justice in the U.S. South, "Although Black people constitute 21% of the voting-age population in North Carolina, they represent 42% of the people disenfranchised while on probation, parole, or post-release supervision."
The group notes that in 44 North Carolina counties, "the disenfranchisement rate for Black people is more than three times the rate of the white population."
"Judge Biggs' decision will help ensure that voters who mistakenly think they are eligible to cast a ballot will not be criminalized for simply trying to re-engage in the political process and perform their civic duty."
In what one civil rights leader called "the largest expansion of voting rights in this state since the 1965 Voting Rights Act," a three-judge state court panel voted 2-1 in 2021 to restore voting rights to approximately 55,000 formerly incarcerated felons. The decision made North Carolina the only Southern state to automatically restore former felons' voting rights.
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However, last April the North Carolina Supreme Court reversed the three-judge panel decision, stripping voting rights from thousands of North Carolinians previously convicted of felonies. Dissenting Justice Anita Earls opined that "the majority's decision in this case will one day be repudiated on two grounds."
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As similar battles play out in other states, Democratic U.S. lawmakers led by Rep. Ayanna Pressley of Massachusetts and Sen. Peter Welch of Vermont in December introduced legislation to end former felon disenfranchisement in federal elections and guarantee incarcerated people the right to vote.
Currently, only Maine, Vermont, and the District of Columbia allow all incarcerated people to vote behind bars.
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