U.S. House members who voted in favor of a $1.1 trillion appropriations bill, which includes a controversial policy rider to roll back a regulation for major banks, received on average nearly three times more money in campaign contributions from banks than representatives who voted against it, according to a website that tracks the influence of money in politics.
The spending bill, which passed the U.S. House by a vote of 219-206 and the U.S. Senate by a vote of 56-40, includes language that undoes a major piece of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed in 2010 in the wake of the financial crisis.
Dodd-Frank prohibited banks insured by the Financial Deposit Insurance Corporation, such as Bank of America or Citigroup, from trading in custom swaps, trades in which investors exchange assets, such as credit default swaps, which were largely blamed for causing the financial crisis.
The appropriations bill undoes that regulation – using language that was first drafted by lobbyists for Citigroup in 2013, according to reports from the New York Times.
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The legislation passed the House last year but died in the Senate. It was revived this year when U.S. Rep. Kevin Yoder, R-Overland Park, offered it as an amendment to the financial services appropriations bill at a June committee hearing.
Yoder received a combined $29,000 in campaign contributions from the political action committees representing the four largest banks that will benefit from eliminating the regulation. Those banks are Citigroup, Goldman Sachs, Bank of America and JP Morgan Chase, according to Maplight.org, a website that compares campaign donations to congressional votes.
C.J. Grover, Yoder’s spokesman, would not comment directly on the campaign contributions, but he did explain in an e-mail the Johnson County Republican’s reasons for reviving the legislation, saying it was specifically meant to help regional banks and farmers in the state.
“As a member of the Appropriations Subcommittee on Financial Services, Congressman Yoder offered an amendment identical to a popular, bipartisan bill that passed the House last year with 70 Democrats voting in favor. The Appropriations Committee unanimously passed the amendment, which Yoder offered because smaller regional banks and farmers utilize derivatives on a daily basis to manage their risk by locking in prices and reduce their exposure to changes in the market,” Grover said. “Absent this fix, the cost of doing business as a farmer in Kansas will simply go up.”
The appropriations bill passed with bipartisan support and strong backing from President Obama, but was strongly criticized by more progressive members of the Democratic Party, such as House Minority Leader Nancy Pelosi, D-Calif., and U.S. Sen. Elizabeth Warren, D-Mass., specifically because of the Dodd-Frank rollback.
Warren called it the “worst of government for the rich and powerful” on the Senate floor and said that the provision allows “derivatives traders on Wall Street to gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system. These are the same banks that nearly broke the economy in 2008 and destroyed millions of jobs.”
Maplight, a nonpartisan site based in Berkeley, Calif., found House members voting in favor of the bill received on average $9,979 in campaign donations from the four banks, which is 2.8 times more than the average for lawmakers voting no.
House Republicans voting yes received 2.2 times more money than those voting no, while House Democrats voting yes received 3.9 times more money than those voting no, according to Maplight’s analysis.
The three biggest beneficiaries from the banks’ PACs were House Speaker John Boehner, R-Ohio, House Majority Leader Kevin McCarthy, R-Calif., and U.S. Rep. Joe Crowley, D-N.Y., who is vice chair of the Democratic Caucus, all of whom received $40,000 in donations from the four banks.
The Kansas delegation was evenly split on the bill, which received criticism from liberals and conservatives alike: U.S. Rep. Lynn Jenkins, R-Topeka, and U.S. Sen. Pat Roberts, R-Dodge City, joined Yoder in voting yes. U.S. Sen. Jerry Moran, R-Hays, U.S. Rep. Mike Pompeo, R-Wichita, and U.S. Rep. Tim Huelskamp, R-Fowler, voted no.