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Bailout recipients also major lobbyists
Question of the Day
Many of the large American companies that received billions of taxpayer bailout dollars by pleading that they didn’t have enough money to lend to customers were, at the same time, spending millions of dollars dispatching lobbyists to influence the federal government.
A Washington Times review of lobbying disclosure reports found that 18 of the top 20 recipients of federal bailout money spent a combined $12.2 million lobbying the White House, the Treasury Department, Congress and federal agencies during the last quarter of 2008.
For instance, the government bought $3.4 billion in American Express Co. stock on Jan. 9 as part of an aid package. In the last quarter of 2008, the company spent more than $1 million on federal lobbying.
American Express spokeswoman Joanna Lambert said the company did not lobby for the bailout funds. At the same time, disclosure forms say, the company was lobbying the Federal Reserve, the Treasury and Congress, all active players in dispensing the multibillion-dollar rescue financing.
Several taxpayer groups assert that companies receiving federal assistance shouldn’t be able to lobby the federal government at all, particularly on the Troubled Assets Relief Program (TARP), which is the formal name of the federal bailout plan.
“It’s a definite conflict,” said Pete Sepp, a spokesman for the National Taxpayers Union. “It’s a disturbing sign that TARP recipients think there is still more loot left to get. If they’re not slowing down their lobbying, taxpayers need to be worried.”
Citigroup and Bank of America have received two rounds of federal assistance. Both also have been active lobbyists.
Citigroup - which with $45 billion is the No. 1 recipient of taxpayer assistance - spent $1.3 million on lobbying in the fourth quarter, nearly as much as the $1.4 million it spent in the third quarter. Bank of America spent $820,000 during the quarter, down from $1 million.
“Taxpayers are now significant shareholders in these companies,” said Steve Ellis, vice president at Taxpayers for Common Sense, a watchdog group in Washington. “The last thing taxpayers want is to be paying for somebody to lobby their elected representatives to get more money.”
The top 20 companies have received $241 billion collectively in TARP assistance. They spent $12.2 million on lobbying in the fourth quarter of last year, compared with $13.5 million during the third quarter.
Eighteen of these companies lobby routinely, according to public disclosure statements.
TARP was designed to provide cash to help troubled banks stay afloat, but the program doesn’t bar recipients from lobbying government agencies.
A few of the recipients scaled back on lobbying. Goldman Sachs Group sliced its lobbying spending in half. It allocated just over $1 million to lobbying in the third quarter and $500,000 in the fourth quarter.
Others, such as American Express Co. and General Motors Corp., increased their lobbying expenses during the quarter. GM spent $3.3 million on lobbying activities during the fourth quarter, up from $2.7 million in the third. GM received $10.4 billion in bailout funds in the same quarter.
Sen. Dianne Feinstein, California Democrat and chairman of the Senate Select Committee on Intelligence, introduced legislation this month that would prohibit recipients of the second round of TARP spending from using the funds to lobby, to make political donations or to host parties, among other restrictions.
“At present, we don´t know whether these companies are using these funds to fly on private jets, attend lavish conferences or lobby Congress,” Mrs. Feinstein said.
Thomas A. Schatz, president of Citizens Against Government Waste, noted that the Constitution guarantees U.S. citizens the right to lobby their government. But he said the size and scope of the federal bailout allows some limits to be set.
“This is an unprecedented act, and with so few rules associated with the expenditures of the money, it seems there are more opportunities to exert influence,” he said.
About the Author
Both parties recognize the Democrats' scam
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