Watchdog: FCIC Report Proves Political System—Not Just Wall Street—Needs Fixing

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Washington, D.C.—The Financial Crisis Inquiry Commission reports that the financial industry played a “key role” in weakening regulatory constraints, that regulators lacked the “political will,” then highlighted the billions in campaign cash and lobbying the industry spend over the last decade. This will only get worse as the campaign contributions and lobbying expenses from Wall Street continue to rise, according to campaign watchdog Public Campaign Action Fund.

“Over the past decade, Wall Street interests have spent heavily to keep elected officials and regulators at bay, sitting on their hands, or looking the other way,” said David Donnelly, national campaigns director for Public Campaign Action Fund. “The report out today is as much an indictment of a pay-to-play system that puts the special interests before the public’s interest as it is an indictment of greedy practices on Wall Street. To avert another crisis, we need to have elections of, by, and for the people, not funded by Wall Street.”

According to the report, “it did not surprise the Commission that an industry of such wealth and power would exert pressure on policy makers and regulators. From 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions.”

Key facts about Wall Street spending in Washington:

  • In the 1998 and 2000 cycles, the finance, insurance, and real estate (FIRE) sector spent $222 million on campaign contributions to federal candidates, according to Public Campaign Action Fund analysis of the nonpartisan Center for Responsive Politics. From 2008 to 2010, this total climbed to $466 million—a 110 percent increase from just a decade ago.
  • Rep. Spencer Bachus (R-Ala), the new chairman of the House Financial Services Committee, said earlier this month that his job was to “serve the banks.” Bachus took $821,700 from the FIRE sector in 2010.

Already, House Republicans have introduced legislation that would repeal the “Dodd-Frank Wall Street Reform and Consumer Protection Act” passed in the 111th Congress. Rep. Michele Bachmann (R-Minn.), the lead sponsor, has received $1.2 million from Wall Street interests during her time in Congress.