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Tea-party favorites such as Stephen Fincher of Tennessee were swept into Congress on a wave of anger
over government-funded bailouts of banks.
Now those incumbents are collecting thousands of dollars
for re-election campaigns from the same Wall Street firms whose
excesses they criticized. They have taken no significant steps
to curb them or prevent future taxpayer-financed rescues.
Republican freshmen have made clear their disdain for
expanding government, and openly opposed a financial regulatory
overhaul enacted by Democrats in 2010 before the newcomers
arrived in Washington. Their ranks include 10 Tea Party-backed
freshmen on the House Financial Services Committee, part of a
force that won election in a populist backlash to government
spending that included emergency lending to major banks and
bailout of firms including U.S. automakers.
Still, the lawmakers haven’t passed, considered or even
introduced legislation to address concerns about “too-big-to-
fail” banks voiced by members of both parties and such Federal
Reserve bank presidents as Richard Fisher of Dallas and Jeffrey Lacker of Richmond, Virginia.
“I haven’t seen any of them putting forth legislation on
breaking up the big banks or on other things that would
genuinely prevent a bailout next time,” said Marcus Stanley,
policy director of Americans for Financial Reform, a Washington-
based umbrella group of organizations that supported the 2010
Dodd-Frank Act and other financial regulations.
Since arriving in Congress in January 2011, Tea Party-
backed lawmakers have demonstrated their determination and
muscle by forcing several rounds of government spending cuts
through standoffs over raising the national debt ceiling with
House Speaker John Boehner of Ohio and other Republican leaders,
putting the government on the brink of a shutdown.
Yet the anti-bailout fervor that drove the messaging of
Republican candidates during the campaign cycle of 2009 and 2010
has dissipated, and those same lawmakers are now collecting
money from the firms bailed out by President George W. Bush’s
$700 billion Troubled Asset Relief Program.
Five banks -- JPMorgan Chase & Co. (JPM), Bank of America Corp.,
Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. (GS) -
- held $8.5 trillion in assets at the end of 2011, equal to 56
percent of the U.S. economy, according to central bankers at the
Federal Reserve. Combined those institutions took $150 billion
in bailout money in 2008 and repaid it by the end of the next
The political action committees of those institutions have
distributed $169,499 through March 31 to the campaign coffers of
the 10 freshman Tea Party-backed lawmakers on the House
Financial Services Committee, according to an analysis of
campaign finance disclosure records.
Fincher, who is among them, promised as a candidate to
“Help Main Street” and ensure there would be “no more Wall
Street bailouts” in an advertisement that ran 98 times in the
Nashville market in the run-up to his victory in a district
previously held by a Democrat since 1988, according to New York-
based Kantar Media’s CMAG, which tracks advertising.
“There was a lot of visceral reaction” to federal
intervention to save Wall Street, said Mark Skoda, founder of
the Memphis Tea Party and a Fincher constituent and supporter.
“Stephen was very much using the language that Wall Street was
problematic here and we were not going to do any more
Fincher, through spokeswoman Jennifer Cook, declined an
interview request. Several others receiving donations from the
banking firms also have declined to comment.
Some Votes Cast
Fincher did vote this month to repeal the mechanism
included in Dodd-Frank to resolve the largest financial
institutions -- a process House Republicans oppose and say put
into law the federal government’s ability to bail out firms.
Dodd-Frank allows the Federal Deposit Insurance Corp. to
use taxpayer dollars to maintain stability in the financial
system as it dismantles a “too big to fail” firm. While the
FDIC would then be required by law to impose assessments on the
largest banks to recoup that money, Republicans argue that the
authority allows the agency to make payouts with taxpayer
dollars to creditors of a firm -- something that would feed
risk-taking at Wall Street firms.
“Republicans on the committee, including the freshmen,
stood strong against partisan attacks and voted to repeal this
bailout authority,” Jeff Emerson, a spokesman for the Financial
Services Committee, said in a statement. The vote sends “the
message to ‘too big to fail’ firms and their creditors that they
-- and not the taxpayers -- will bear the consequences of shoddy
lending and undisciplined risk-taking.”
Democrats, all of whom voted against the measure in
committee, said that the repeal would put the financial system
in the same place it was four years ago -- and that Republicans
have yet to produce an alternative proposal in the current
“What they want to do is go back to exactly where we were
in 2008,” Representative Barney Frank of Massachusetts, the top
Democrat on the committee, said in an interview. Frank isn’t
seeking re-election. “They’ve presented no alternatives.”
Lawmakers collecting contributions from industries they
oversee is a common practice in Congress, and both parties take
advantage of it, according to Anthony Corrado, a political
scientist at Colby College in Waterville, Maine.
“One of the reasons why financial services has become a
particularly important committee in recent Congresses is that
the parties know they can put individuals on that committee and
they will be successful raising money,” Corrado said. “It
shows how the money culture on Capitol Hill can affect even
those who come to Washington hoping to fight against it.”
Fincher, a gospel musician from Frog Jump, Tennessee, has
received $11,500 from the political action committees run by
Bank of America, Goldman Sachs, JPMorgan Chase and Wells Fargo.
Citigroup’s political action committee had not contributed to
the lawmaker through the end of March.
Two other members of the committee not listed as members of
the Tea Party Caucus, yet who won election to the House with Tea
Party support, are Representatives Steve Stivers of Ohio and
David Schweikert of Arizona. Both ran ads attacking bailouts.
One Stivers ad criticized former Representative Mary Jo Kilroy, a Democrat, for supporting “taxpayer-funded bonuses
given to failed Wall Street executives.” A Schweikert ad ties
the bailouts to the national debt, saying former Democratic
Representative Harry Mitchell spent billions “to bail out Wall
Street banks, leaving America deeply in debt.”
Stivers, a former banking lobbyist who was endorsed by the
Tea Party-affiliated group FreedomWorks, has received $28,000
from the political action committees of the five largest banks;
Schweikert has collected $11,500.
Courtney Whetstone, a spokeswoman for Stivers, declined to
comment, as did Rachel Semmel, a spokeswoman for Schweikert.
To be sure, it’s not as if the freshmen haven’t been active
on the panel.
The House newcomers took the lead on measures aimed at
reducing the reach of government in financial markets, either
through easing or repealing pieces of the Dodd-Frank Act or
reducing the power of new government agencies.
Fincher is the lead sponsor of a law signed this month by
President Barack Obama that cuts back Securities and Exchange
Commission regulations for newly public companies, a measure
Schweikert played a lead role in drafting. Stivers sponsored a
bill to ease Dodd-Frank’s swaps rules, which passed the House
with bipartisan support, and New York Representatives Michael Grimm and Nan Hayworth have sponsored their own measures to
reduce the reach of the derivatives regulations, each garnering
bipartisan support, as well.
Hayworth and Grimm, who had the support of Tea Party groups
in 2010, collected $27,500 and $15,000, respectively, from the
five financial firms through the end of March, according to
disclosure records. Grimm, who faces an investigation over
improper campaign contributions from followers of a New York
City rabbi, moved to distance himself from the Tea Party shortly
after he came to Washington in 2011.
Edward Yap, a spokesman for Hayworth, didn’t return
requests seeking comment. Grimm spokesman Carol Danko also
didn’t respond to interview requests.
Representative Sean Duffy of Wisconsin, who has received
$19,500 from the firms, sponsored a House-passed bill to
overhaul the structure of the Consumer Financial Protection
Bureau, one of the cornerstones of Obama’s regulatory overhaul.
Republicans opposed its creation and have pushed the change the
bureau, which they say has too much power.
John Gentzel, Duffy’s spokesman, declined to comment.
Still, proposals to prevent or help manage a systemic
financial crisis like that which occurred in 2008 are non-
existent. Republicans on the committee voted this month to
repeal the resolution process put into place in Dodd-Frank -- a
process House Republicans always opposed -- yet haven’t produced
an alternative proposal in the current Congress.
Lawmakers have tried to address the size of U.S. banks in
recent years with little success. Senator Sherrod Brown, an Ohio
Democrat, proposed an amendment to Dodd-Frank that would have
capped the size of financial institutions. That amendment failed
in the Senate, even with the support of Senator Richard Shelby
of Alabama, the top Republican on the Banking Committee.
Representative Brad Sherman, a California Democrat, last
week introduced legislation that would require the Treasury
secretary and Congress to work in concert to break up financial
firms that would threaten the health of the system in the event
of their failure. The measure, which also was introduced during
the last Congress with no success, has only one co-sponsor in
the 435-member House.
While the freshmen on the committee represent an array of
constituencies, they have a common need if they want to hold
their places in Congress: money.
With that in mind, the group established a fundraising
committee, called “Team 2012,” in March 2011. While the
committee has since disbanded, it provided a single destination
for political action committees representing banks, law firms
and lobbyists to donate money to be split among the lawmakers.
The committee included two lawmakers re-elected after
spending time away from Congress, and another freshman,
Representative Robert Hurt, who did not have major Tea Party
backing in his 2010 race in Virginia. Bank of America was among
the groups that took advantage of the arrangement, sending the
lawmakers $4,000 in April 2011.
Of the 12 Financial Services committee members sharing cash
from the committee, which raised $62,900 in its 10 months of
existence, nine were Tea Party-backed freshmen. Fincher, who
didn’t join the House panel until May 2011, wasn’t involved with
the fundraising committee, according to filings.
“Candidates who run the first time on an aggressive
platform trying to protect voters against special interests then
have to change their tune to pay the piper and listen to those
who fund their campaigns,” said David Donnelly, executive
director of the Washington-based Public Campaign Action Fund, a
nonpartisan group that advocates for tighter campaign finance
To contact the reporters on this story:
Heidi Przybyla in Washington at
Phil Mattingly in Washington at
To contact the editors responsible for this story:
Jeanne Cummings at
Maura Reynolds at
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