Following the TARP Money Trail

Published 03/26/09 Dustin Ensinger - Newsweek

Are members of Congress on the take?  It sure seems that way.  According to Newsweek, bailed out recipients of taxpayer money in the form of the Troubled Assets Relief Program are doling out the cash in the form of campaign contributions to friends in high places. 

Banks and other financial institutions have been targeting congressional leaders and ranking members of key committees for campaign contributions especially over the past year. The financial crisis left many of them nearly bankrupt and in need of government aid to simply stay afloat.  In some cases, these same institutions have spent years cultivating - “buying” - cozy relationships with the same members of Congress who are now in charge of handing out billions in cash to struggling financial institutions.    

Newsweek is reporting that in just the first two months of 2009, TARP recipients have dished out nearly $85,300 to members of Congress.  Bank of America, who received $15 billion in taxpayer cash, has shelled out $24,500, including $1,500 to Senate Majority Leader Steny Hoyer.  Recipient of $25 billion in TARP funds Citigroup has contributed $29,620 to campaign war chests, including $2,500 to GOP whip Eric Cantor.  He also received $10,000 from Swiss bank UBS, who, not actually a TARP recipient, received $5 billion in TARP money in the form of payments from American International Group.   

“This certainly appears to be a case of TARP funds being recycled into campaign contributions,” Brett Kappel, a D.C. lawyer who tracks donations told Newsweek. 

It gets even worse as you get deeper.  A quick review of campaign contributions at the Center for Responsive Politics Web site, opensecrets.org, shows that the same financial firms that are responsible for the financial crisis due to excessive risk taking have been filling the campaign coffers of the right people for years.   

Sen. Chris Dodd (D-CT), chairman of the Senate Banking Committee - charged with the regulation of banks and providing financial aid to commerce and industry - has been well endowed over the years by the same institutions he has oversight.  From 2003 to 2008, Dodd received $316,494 from Citigroup and $223,478 from AIG.  In that same time frame, he received $4.2 million from the securities and investment industry, $1.4 million from insurance companies and $905,000 from commercial banks.   

His Republican counterpart - the ranking minority member on the committee - Sen. Richard Shelby (R-AL) has enjoyed the fruits of ignoring the economic malpractice of financial institutions as well.  From 2003 to 2008, he received $91,200 from Citigroup and $66,500 from JPMorgan Chase.  Overall during that five year period, he received over $700,00 from the securities and investment industry and over $400,000 from commercial banks.   

On the House side, the influence peddling was just as egregious.  Chairman of the Financial Services Committee, Rep. Barney Frank (D-MA), has received $236,000 from the securities and investment industry, $202,548 from the insurance industry and $120,950 from the commercial banking industry in just the past year.  On the other side of the aisle, the ranking member, Rep. Spencer Bachus, received $232,000 from the securities and investment industry, $193,00 from commercial banks and $140,500 from the insurance industry during the same period.    

While it may not be fair to suggest that all that money resulted in any untoward activity, it is a fact that money buys you access, and with access comes the possibility of greater influence.    

“It’s access.  You get an appointment, you get seen, you are taken seriously,”  Meredith McGehee, policy director for the Campaign Legal Center told The Denver Post.  “When you have a crisis like the one we are in now, questions get raised about who raises money and what they get for it.  Every congressional member is going to have to pay a lot more attention to where they get their campaign money.”

Source Newsweek:

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