Posted: Sunday, January 12, 2014 6:00 am
When Harry Markopolos testified before the U.S. Senate Banking, Housing and Urban Affairs Committee on Sept. 10, 2009, he discussed “regulatory capture” — situations in which regulators stop protecting the public because they have become beholden to the industries they are charged with regulating. At the time, he had the U.S. Securities and Exchange Commission (SEC) squarely in his sights for overlooking evidence he had provided during the previous 10 years, evidence proving Bernie Madoff was running a Ponzi scheme that eventually involved the theft of more than $68 billion! Snapped Markopolos, “Government is supposed to be representing the public’s interests but all too often these government agencies become captive and start representing their industry’s interests over those of the citizenry.”
Markopolos might have said the same of the U.S. Congress were it not that to mention this inconvenient truth at the Senate hearings would have been, ah, shall we say, indelicate. After all, in 2012, a total of $3.31 billion was spent on lobbying the federal government using 12,407 lobbyists.
So, with others than the American public calling the tune within the Beltway in general and on Capitol Hill in particular, what are the influence peddlers getting for their money? Let’s start with Wall Street, given that in light of the Federal Reserve’s easy monetary policy over the last several years, the Banksters have more than enough money to wallpaper the Federal City green. Here’s a recent example: House Resolution (H.R.) 992 — the Swaps Regulatory Improvement Act, which passed the House on Oct. 20, 2013. This bill, written by lobbyists for the country’s largest banks, repeals the laws passed in 2010 to prevent a recurrence of the meltdown the country experienced in 2008.
Recall, in 2010, Congress passed “Dodd-Frank,” the law that clamped down on risky derivatives trading, the kind of corrupt behavior that led to the downfall of the economy from which the country has yet to recover fully. Already weakened, this latest effort to deliver the coup de grâce to Dodd-Frank was written by Citigroup lobbyists, co-sponsored by a former Goldman Sachs executive, and passed with the support of both parties by members of the House who are among the largest recipients of Wall Street’s favors.
But don’t take my word for it. None other than The New York Times noted that 70 of the 85 lines in the new House bill were literally written by Citigroup lobbyists. The Times report also noted that “two crucial paragraphs … were copied nearly word for word” from the lobbyists’ text and Citigroup’s lobbyists redrafted the House Bill, striking out ideas they didn’t like and replacing them with ones they did.
The new bill was sponsored by Randy Hultgren, R-Ill. and co-sponsored by, among others, Rep. Jim Himes, D-Conn. Importantly, Himes formerly was an executive with Goldman Sachs. He also is a chief fundraiser for the Democratic Congressional Campaign Committee. The MapLight website reported that six of the bill’s eight sponsors received significant campaign funding from the financial industry. According to The New York Times: “House aides, when asked why Democrats would vote for this proposal even though the Obama administration opposes it, offered a political explanation. Republicans have enough votes to pass it themselves, so vulnerable House Democrats might as well join them, and collect industry money for their campaigns.”
Bucks County Congressman Michael Fitzpatrick voted in favor of H.R. 992. You can check how other representatives voted on House Vote No. 569 at: https://www.govtrack.us/congress/votes/113-2013/h569
It might seem logical that officials of federal as well as state and local governments should be barred from taking money from representatives of the industries they are elected to regulate. However, in the upside-down Alice in Wonderland world of Capitol Hill, it appears almost anything goes. The real question is: How much longer will the electorate put up with the political stench of corruption emanating these days from the banks of the Potomac? As one Republican aide is said to have remarked to the Times of the current affair: “I know that some of our members are inclined to whore, but we cannot be apes.
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