Why Fear Terrorists When We’ve Got Senators?

February 17th and April 9th I posted entries on lobbying and our housing crisis. Lobbying is back in the news. The next five paragraphs were taken from my previous entries.

Bribe: noun. Anything given or serving to persuade or induce. Verb. To influence or corrupt by a bribe.

Lobby: n. A group of persons who work to conduct a campaign to influence members of a legislative body. V. To solicit or try to influence members of a legislature.

Lobbyist: A person who tries to influence legislation on behalf of a special interest.

If money is given to a political candidate or an office-holding politician before, during or after being contacted by a lobbyist for that organization, then the candidate or elected official has been bribed for services rendered or some service implied to be rendered in the future.

If an individual or organization gives money to both political parties or candidates running for the same office then they are, by caveat, guilty of bribery.

Forbes magazine listed senators who received the highest share of their campaign contributions from the finance, insurance and real estate industries over the last five years. Here are the top four:

Chris Dodd (Democrat – Conn) $9million – 35%+
Richard Selby (Republican – Al) $2.5 million – 33%+
Charles Shumer (Democrat – N.Y.) $3.3 million – 32%+
Tom Carper (Democrat – De.) $1.5 million – 32%+_

These are examples of senators who I believe have allowed themselves to be purchased and represent corporations and industries as opposed to the people who voted them into office.

Chris Dodd and Richard Selby are the ranking democrat and republican on the Banking, Housing and Urban Affairs Committee. Yet they are receiving lots of dollars from these groups. Don’t they recognize that this smacks of corruption? If you were an inspector of meat and you allowed the company whose meat you inspected to supply you with cash would this be evidence of fraud?

The Consumer Education Foundation (a California based non-profit, non-partisan consumer research, education and advocacy program) published a document entitled “Sold Out: How Wall Street and Washington Betrayed America.”

In the article (231 pages long) they make the case that many of our financial problems are a “result of bad behavior on Wall Street and the corrupt connection between the powerful moneyed interests and those who make policy in Washington D.C.”

In this article they blame the decision-makers on Wall Street of:
1. Engaging in unconscionable predatory lending that offered huge profits, but led to extreme consequences when the loans were unpayable.

2. Consistently undermined financial regulation programs to benefit their Wall Street firms.

Over the last decade financial firms political campaign contributions and lobbying investments exceeded $5 billion to purchase political influence to gain the political power to undermine regulation and pave the way for favorable treatment in Washington.

$3.4 Billion of this money went to hire lobbyists. The financial sector employed 2,997 lobbyists in 2007. One hundred and forty two of these individuals were previously high-ranking officials or employees in the Executive Branch or Congress. Who better to understand and influence Washington’s wheels of power? Who better to call in political favors from friends and their peers – other elected officials.

One example of the erosion of regulation brought about by financial companies through political influence:
“In 1975, the Security and Exchange Commission trading and marketing division promulgated a rule requiring investment banks to maintain a debt-to-net capital ratio of less than 12-to-1. It forbid trading in securities if the ratio reached or exceeded 12 to 1.”

This rule was subverted in 2004 (led by Goldman Sachs – the top investment bank in the US and their chairman at the time - Henry Paulson – the name should sound familiar) and authorized investment banks to “develop their own net capital requirements.” Meaning they could leverage themselves to infinity and beyond with no oversight.

A second example: “In 2003, during the height of the predatory lending crisis, the Office of the Comptroller of the Currency invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. How many laws from the Civil War era rear their ugly heads to effect so many Americans? In fact this one law may cause ten times more Americans to lose their homes than lost their lives in the Civil War.

And so 400+ companies (most in the financial and insurance industries) have received tarp money from our politicians who have been subverted by campaign contributions and lobbying efforts.

On the John Stewart television program Elizabeth Warren (she heads the Congressional Oversight Panel responsible for watching over Tarp – the Troubled Asset Relief Program) stated that for every $100 of TARP money disbursed the government has gotten stock and warrants worth just $66 at the time of issuance. Warren went on to say that the value of those assets has deteriorated further since being issued.

Wouldn’t it be nice if you could use $5 billion dollars to get a program that will eventually bring your companies more than $700 billion in return? Imagine for one moment that I brought you a guaranteed investment that for every 66 cents you give me, I give you $1.00 in cash. That’s an instant 51.5% instant return (and that doesn’t cover the further deterioration of the troubled assets).
And now the Obama-backed anti-foreclosure bill has been voted down in the United States Senate.

Surprise, surprise, surprise.

The Democratic-controlled Senate defeated a plan to spare hundreds of thousands of homeowners from foreclosure. Banks lobbied aggressively against the bill.

“Senate Majority Whip Dick Durbin of Illinois championed the bill and spent weeks negotiating with financial lobbyists in a bid to strike a deal.”

The question that seems obvious to me is: Why did Senator Durbin spend a moment negotiating with lobbyists? Shouldn’t he and president Obama (who claimed he strongly supported the bill) have been negotiating with the other Senators? And then the defeat got little publicity, as our politicians were conveniently moving on to the changes in credit card regulations. Meanwhile it’s common knowledge that the credit card companies are hammering consumers or what they in private call, “making hay while the sun shines.”

It seems there will always be more cake for the financial industry. First they get a $700 billion tarp bailout. Then they get 0-.25% interest from the federal reserve. And now they will get to feast on up to 8 million more home owners who will lose their homes because they will not be able to pay back their predatory lenders.

Our system of campaign contributions and lobbying is not only a national liability and an embarrassment but evidence of corruption in our capital.

Why should taxpayers bear the brunt of bailing out banks when their votes mean little in the greater scheme of things?

Why should Senators be able to take money from anyone for their influence?

Why should corporations be able to lobby when 50 million Americans with no health insurance carry so little weight in Washington while all our Congressmen and Senators and their families have the best health insurance money can buy with no preexisting conditions?

Why should we fear terrorists when we’ve got Senators?

If anyone out there can answer these questions, please reply.