Reports of federal lobbying expenditures were due on Monday,and it appears that financial industry lobbying through September 30 reached a zenith during the debate and negotiation of the $700 billion financial-markets rescue plan. On the heels of these disclosures, Senator Dianne Feinstein (D., Calif.) announced she will introduce legislation to ensure that bailout money is not used to fund further lobbying costs. We inquired and were told a draft of the bill would be available next week when Congress resumes. The Wall Street Journal reported that it will likely include detailed reporting requirements on the use of proceeds of Treasury Department investments in the participating institutions.
Various organizations have been analyzing the financial crisis in terms of a collapse of the principles of good governance. According to the Center for Responsive Politics, in the current election cycle the financial services industry is the second and third largest contributor (after trial lawyers), respectively, to campaigns of members of the Senate and House banking committees charged with oversight of the nation’s banks and financial markets.
According to a Zogby poll released on September 21st, 82% of respondents believe that congressional candidates should be prohibited from receiving contributions from industries that are “vital to the financial and national security of the country.”
Senator Feinstein’s idea seems like a good start, but the public interest would be best served by a larger slate of reforms that limit the influence of influential industry executives on lawmakers and the regulatory process.