Wall Street is writing its own regulation bill

Bank lobbyists have a direct influence on financial legislation drafted in Congress, and are in some cases even writing the measures themselves. Citigroup this month drafted a regulation bill that has already passed through a House committee.

To soften financial regulations, bank lobbyists frequently
‘assist’ lawmakers in writing draft legislation that serves to
benefit them at the expense of American taxpayers, according to a
New York Times investigation.

Lobbyists working for Citigroup Inc., a multinational financial
services corporation, wrote 80 percent of a regulation bill that
was approved by the House Financial Services Committee this month.
Citigroup wrote 70 lines of 85-line bill, which exempts “broad
swathes of trades” from new regulation, the Times reported based on
e-mails it obtained.

Two paragraphs of the bill were copied “nearly word for word”
from what Citigroup drafted. The only difference between the
versions were two words, which lawmakers changed to make
plural.

The Dodd-Frank Wall Street Reform and Consumer Protection Act,
which was signed into law in 2010, inflicted heavy financial
regulatory reform following the most recent recession. The bill was
pushed into law by Democrats, but now, both Democrats in the House
and Senate are siding with bank lobbyists to roll back parts of the
regulation overhaul.

The bill drafted primarily by Citigroup this month was starkly
opposed by the Treasury Department, but easily made it through the
House Financial Services Committee, the Times reports. MapLight, a
nonprofit group that analyzes campaign finance records, found that
lawmakers who supported Wall Street’s legislation received twice as
much in contributions from financial institutions than those who
opposed such measures, which appears to indicate that lawmakers’
support can be bought.

This month, Wall Street groups also held fundraising dinners for
lawmakers who co-sponsored the bills they backed and in some cases
co-wrote. As a reward for siding with bank lobbyists, these
lawmakers were granted a dinner in which attendees paid up to
$2,500 for a plate.

When questioned by the Times, bank industry officials said that
helping draft legislation was a common practice on Capitol Hill,
but argued that they do not undermine Dodd-Frank.

“We will provide input if we see a bill and it is something
we have interest in,”
said Kenneth E. Bentsen Jr., a Wall
Street lobbyist. Bentsen is a former lawmaker himself, and many
financial institutions’ lobbyists have worked as Capitol Hill aides
and staffers before taking on their current roles.

Jeff Connaughton, a former lobbyist and former congressional
staffer, said that Wall Street has so much influence on the Hill
that it “skews the thinking of Congress.”

“It’s appalling, it’s disgusting, it’s wasteful and it opens
the possibility of conflicts of interest and corruption,”
Rep.
Jim Himes, a top recipient of Wall Street donations and a former
banker at Goldman Sachs, told the Times, admitting his own faults.
“It’s unfortunately the world we live in.”

This article originally appeared on: RT