There’s been a lot of talk in recent months about bailed-out banks getting help from the taxpayers, then turning around to pour vast sums of money into lobbying Congress.
Bank of America even claimed to the New York Times last month that it was “sensitive” enough to stop lobbying on the Troubled Assets Relief Program (TARP) — but the bank kept its in-house lobbyists and two private firms active on the issue, according to disclosure forms filed publicly with the Clerk of the House. (We’ve put a call in to B of A asking for clarification on this point.)
So what can be done to ensure that public money isn’t spent by businesses on watering down executive compensation caps and other measures that pose a threat to Wall Street?
Well, there’s a bill out there that would go a long way to help: the TARP Transparency Act, introduced by Sens. Dianne Feinstein (D-CA) and Olympia Snowe (R-ME) last month.
The bill would require the Treasury Department to set corporate governance standards on the ability of bailed-out banks to fund lavish conventions, parties, and junkets. The banks would then have to report details of their political spending to Treasury every quarter to verify compliance with the new rules, with stiff penalties for violation.
An outright lobbying prohibition for bailed-out businesses would be likely to spark a legal challenge, even if it could pass Congress — remember, lobbyists have long cherished their First Amendment rights to petition the government. But the Feinstein-Snowe bill would shed some much-needed sunshine on the practice.
And it might prod B of A into explaining what it meant by that promise not to lobby with bailout money…
