There are a plethora of problems with the lack of transparency in lobbying, with one of the most prominent being that lobbyist disclosure laws only require that lobbyists report back on which branch of government or department they've met with. They don't have to list who they met with, what bill or issue they discussed, or even what position they are taking towards the aforementioned bill or issue.
Timothy Geithner's first act as Treasury Secretary was to restrict contact between lobbyists and Treasury officials "in connection with applications for, or disbursements of," TARP funds. However, these rules do not address the larger problem that firms receiving millions of TARP assistance continue to lobby against the interests of hard working taxpayers. TARP recipients spent $114 million on lobbying last year as the financial crisis emerged. In total, bailout recipients that continued to spend money on lobbying spent over $14 million dollars over the three month period of October to December 2008---all this right as the TARP funds were being distributed.
Dave Johnson, a fellow at the Commonwealth Institute, gives some detail about the political activities of these corporations:
"TARP recipients are currently lobbying against compensation caps at companies receiving TARP, against increasing bank regulation - and even against increased oversight of the use of TARP funds in the TARP Reform and Accountability Act! They are also lobbying against the Arbitration Fairness Act, the Fairness in Nursing Home Arbitration Act, the Mortgage Reform and Anti-Predatory Lending Act and the Helping Families Save Their Homes in Bankruptcy Act, Credit Card Holders Bill of Rights and the Stop Unfair Practices in Credit Cards Act!"
Rather than focusing on paying the American people back, these bailout corporation are instead using their resources to lobby against measures that would improve the lives of their new investors--us.
When the CEOs of eight bailed out banks went in front of Congress to answer questions about how they used hundreds of billions in taxpayers' money in early February of this year, Bank of America CEO Ken Lewis admitted he thinks it's in "the best interest" of Bank of America to spend money lobbying against economic recovery legislation like the Employee Free Choice Act. This legislation allows a majority of workers to decide if they want a union, which results in increased income and benefits for working people---thereby enabling them to make their credit card and mortgage payments.
Since that time, a number of other TARP recipients including AIG, Citigroup and Burger King have followed Bank of America's path to oppose the Employee Free Choice Act. This really should be a no-brainer: if you're receiving massive taxpayer subsidies, you shouldn't be able to turn around with that money and actively lobby against measures that would improve the lives of very same people that work within the company and other hardworking Americans struggling to keep afloat.
Dave Johnson spells out how this kind of lobbying may have contributed to our country's economic downfall:
"Use of corporate funds to influence our government is a larger problem than just this current misuse of TARP. In fact, this BofA and other companies' use of TARP funds to oppose the Employee Free Choice Act supports an argument that the current economic crisis is a result of corporate lobbying. A corporate-funded assault on government has resulted in de-legislation and deregulation, enriching a few at the expense of the rest of us, while eroding the foundations of our economy and our democracy. Now the public has been harvested in one scheme after another, plundered for every dollar as incomes stagnated, debt skyrocketed and savings fell. Consumption fell off the cliff as the work- and debt-load tapped out people's ability to participate in the economy. The resulting crisis has led to taxpayer dollars propping them all up."
In his address to state legislators today, President Obama renewed his administration's commitment to enforce much tighter lobbying disclosure for recovery funds, saying "these are unprecedented restrictions that will help ensure that lobbyists don't stand in the way of our recovery." This is a step in the right direction, although implementation of these restrictions will be the key to real change here. Americans need an enforceable guarantee that companies receiving billions from taxpayers will not lobby or otherwise influence legislation.
