An army of lobbyists and financial professionals is swarming into Washington D.C. this week to push against financial reform.
As The New Republic reports, “some two dozen executives from large corporations will be descending on Capitol Hill today to make the case against over-regulating derivatives.” That push is being organized in part by the Chamber of Commerce. And The New York Times reports today that “more than 1,500 lobbyists, executives, bankers and others have made their way to the Senate committee that on Wednesday will take up legislation to rein in derivatives, the complex securities at the heart of the financial crisis, the billion-dollar bank bailouts and the fraud case filed last week against Goldman Sachs.”The optics may not be the greatest for the GOP. Senate Minority Leader Mitch McConnell and Sen. John Cornyn (R-TX) are already trying to explain their meeting with Wall Street executives, with McConnell saying on CNN Sunday that “we certainly didn’t talk about blocking the bill” at that meeting. McConnell insisted that “we are in the process of gathering information from people all across the country, from Wall Street to Main Street to try to get advice about doing this right.”
Neither McConnell’s nor Cornyn’s office immediately responded to TPM’s requests for comment. Neither did the Chamber of Commerce.
As the Times reports today, members of the financial sector are focusing their attention on the Senate Agriculture Committee, which will take up derivatives legislation Wednesday. The Times, citing the Center for Response Politics, reports that committee members “have received $22.8 million in this election cycle from people and organizations affiliated with financial, insurance and real estate companies — two and a half times what they received from agricultural donors.” Much of that lobbying has reportedly focused on Sen. Blanche Lincoln (D-AR), Sen. Saxby Chambliss (R-GA), Sen. Chuck Grassley (R-IA) and Sen. Kent Conrad (D-ND).
It’s not just Wall Street lobbyists either. The Times reports that “manufacturers, airlines and other industries, which use derivatives to control their business and foreign currency costs,” are getting involved.
In The New Republic, Noam Scheiber explains one reason behind today’s fly-in of corporate big wigs:
Big financial firms like Goldman Sachs and JP Morgan generate billions of dollars each year as derivatives dealers. But, over the past several weeks, as Democrats’ have escalated their rhetoric and explicitly targeted Wall Street, the big banks have had trouble getting their message out on Capitol Hill. All the more so thanks to Friday’s SEC complaint accusing Goldman of fraud. “The banks’ credibility, their ability to influence this, is limited,” says one derivatives industry lawyer.
And so, instead of mostly making the pitch against regulation themselves, the big derivatives dealers are counting on their corporate clients to do a lot of heavy lifting for them.
Check out the latest developments in our Financial Reform Wire.