Bailed-out banks spent big on financial lobbying

NEW YORK — The 10 banks that received the most bailout aid during the financial crisis spent over $16 million on lobbying efforts in the first half of 2010, as the debate over the financial-regulatory overhaul reached its height.

Disclosure reports show that the banks that got the most government help in late 2008 and early 2009 also invested the most to influence members of Congress, the White House, the Federal Reserve, Treasury Department and a long list of federal agencies as new rules were enacted governing Wall Street and the nation's financial system.

"I'm not shocked that they spent that much money because I saw them every day," said Ed Mierzwinski, consumer-program director at U.S. Public Interest Research Group, who said more than 2,000 lobbyists worked on the financial overhaul bill.

The sweeping law signed by President Obama in July topped 2,300 pages, and outlined broad rules for issues ranging from derivatives trading to the fees merchants are charged for processing credit- and debit-card transactions. It also covered the creation of a consumer-financial protection bureau. Banks are continuing efforts to try to shape many of the new rules that are still being finalized.

The $16.32 million spent in the first half of 2010 was 26 percent higher than the combined $12.94 million they spent in the first half of 2009.

Leading the pack this year was JPMorgan Chase, which spent $1.52 million on lobbying in the second quarter, on top of $1.51 million in the first quarter of 2010, for a total of $3.03 million, according to disclosure reports filed with the House of Representatives clerk's office.

Citigroup, the largest bank recipient of government funds during the crisis in late 2008 and early 2009, was second. The New York-based bank spend $1.47 million on lobbyists in the second quarter, after spending $1.31 million in the first quarter for a total of $2.78 million.

And Wall Street titan Goldman Sachs was third, with $1.58 million spent in the second quarter, on top of $1.19 million in the first quarter of 2010.

Mierzwinski said the big win for consumers was the financial protection bureau, which banks tried to remove from the law.

Bank of America and Wells Fargo both also spent more than $2 million in the first half of the year. Spending far less were PNC Bank, US Bancorp, Capital One Financial and Regions Financial. The American Bankers Association, the main trade group for the industry, also lobbied heavily, spending $4.2 million in the first half of 2010.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said the heavy spending, in part, reflects the number of people needed to discuss issues with 535 members of Congress. One sentence in a law regulating the financial markets can have a big impact on a company's profit, she noted, and the industry made sure they had experts on hand to discuss every aspect with lawmakers.

"We're talking billions," Sloan said. "So the lobbying money is the most effective money you'll spend."

"It's not that I don't think that many would have preferred a different outcome," she added. "But I doubt that any of those banks didn't think it was worth it to have those lobbyists."