The Terrorism Risk Insurance Act, Brought to You by Wall Street, Real Estate Developers and Insurance Companies
Who says Congress can’t get anything done?
The Terrorism Risk Insurance Act, first passed in the aftermath of 9/11 to relieve insurers of deep losses in connection with terrorist acts, was reauthorized easily in the Senate last week. The extremely deep pockets of industries that lobbied aggressively for the bill might have had something to do with that.
The program was brought to the floor, as it has been in the past, by a roster of senators with strong financial backing from industries that aggressively lobbied for the bill.
The securities and investment, real estate or insurance industry, or more than one of those, ranks among the top three campaign donors so far this cycle for each of the nine senators who were first to attach their names to the bill.
The bill’s primary sponsor, Sen. Charles E. Schumer (D-N.Y.), with strong ties to Wall Street, was also a cosponsor of the original 2002 bill, at the time backed by five other senators, including fellow New York Democrat Hillary Clinton. That year, Schumer was the top recipient of campaign funds from the finance, insurance and real estate sector, which gave him $3.1 million. This time around, he’s received close to $1 million from that sector.
Schumer has also received at least one donation this cycle from a lobbyist for the Coalition to Insure Against Terrorism, Charles L. Landgraf, who gave $1,000 to his campaign. The coalition is funded by a bevy of bankers’, realtors’, insurers’ and other industry groups. Martin L. Depoy, a spokesman for the group, had previously worked as an in-house lobbyist for both the National Association of Realtors and National Association of Real Estate Investment Trusts.
The coalition has also hiked up its lobbying expenditures. In 2013, the group spent $370,000 lobbying for the bill. In the first quarter of 2014, it spent $100,000, and in the second quarter it reported spending $170,000.
The program requires insurers to offer terrorism risk insurance policies in return for backstopping the insurance companies in the event of heavy losses, such as occurred on Sept. 11, 2001. Any insured losses over a given threshold would be covered by the government.
The groups and industries represented by the coalition are among the most lavish in their political spending, giving millions to lawmakers each year — chief among them, many of the bill’s sponsors. These include Mark Warner (D-Va.), who pulled in $1.7 million from the finance, insurance and real estate sector this cycle, while Jack Reed (D-R.I.) has received close to $480,000 and Roy Blunt (R-Mo.) has reaped more than $260,000.
The federal insurance program for terrorist acts has historically been backed by lawmakers with these industries on their side. When former Sen. Chris Dodd (D-Conn.), introduced the first version of the Senate bill in 2002, he was already a favorite of the powerful securities and investment, real estate and insurance industries. Since at least 1998, they have ranked among his top five contributors. Later, he also introduced the 2005 and 2007 re-authorization bills.
As for Clinton, after joining the Senate in 2001, she quickly rose in the ranks of the finance, real estate and insurance sector’s protégés. In the 2002 cycle, it gave her a little over $200,000. By 2008, the contributions surpassed $20 million.
That said, the bill’s sponsors and those with strong geographic ties to the industries supporting the measure are far from the only ones to benefit from this endlessly generous collection of corporations and trade groups. This cycle, the sector has given more than $130 million to members of Congress; its lobbying expenditures came to $488 million in 2013 and, in the first three months of 2014, it spent close to $120 million to make its voice heard on this bill and other measures.
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