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Financial Industry Invests Heavily in Key Lawmakers

(Originally published Nov. 16, 2009; Updated with third quarter Senate data Dec. 28, 2009)

As Congress considers legislation to reregulate the financial services industry in response to the greatest economic downturn since the Great Depression, the industry is focusing campaign contributions on the congressional leadership and members of the committees crafting reform legislation.

Between November 2008 (when the current election cycle began) and Sept. 30, 2009, the financial industry – including banks, investment firms, insurance companies and real estate companies – has given $48.3 million in campaign contributions to members of Congress and their leadership political action committees, according to data provided by the Center for Responsive Politics (www.opensecrets.org).

Outsized Giving to Committees that Regulate Financial Services

The industry has showered members of the Senate Committee on Banking, Housing, and Urban Affairs with contributions averaging $309,180; 2.3 times what it has given to other members of the Senate. In the House, Representatives on the House Committee on Financial Services received an average contribution of $138,422 from the sector, about 2.4 times what it has given to other lawmakers. [See Figure I] Meanwhile, the industry has given 2.3 times as much money, on average, to members of the Senate leadership compared to other senators and 7.1 times as much to members of the House leadership compared to other representatives. [See Figure II]

Both chambers of Congress are debating legislation to reform the financial industry in the wake of the recent housing and financial market meltdowns and are expected to vote on legislation in the coming few weeks. Key proposals include downsizing banks that have become "too big to fail," regulating exotic financial products that underlay the crisis and creating a new Consumer Financial Protection Agency to monitor consumer lending and prevent the types of predatory practices that led to widespread mortgage defaults. The financial industry is working vigorously to defeat or weaken most of these proposals.

The 94 members of the two finance committees have received $16.9 million overall. The top 10 committee recipients include the Democratic chairmen: Sen. Chris Dodd (Conn.) and Rep. Barney Frank (Mass.); and the ranking Republicans on the committees: Sen. Richard Shelby (Ala.) and Rep. Spencer Bachus (Ala.). [See Figure III]

Senate banking committee member Charles Schumer (D-N.Y.) has received the most from the industry, $2.3 million, followed by Sen. Kirsten Gillibrand (D-N.Y.), who has received $1.2 million. Senate Majority Leader Harry Reid (D-Nev.) has been the third highest recipient, with $1.1 million in contributions. Among House members, the two highest-ranking members of the Republican leadership, Minority Whip Eric Cantor ($777,147) and Minority Leader John Boehner ($523,100) have been among the largest recipients, along with Rep. Mark Kirk (R-Ill.) ($604,700).

Figure I: Aggregate Financial Sector Donations to Members of the Senate Banking and House Financial Services Committees

Committee	Individuals to Campaign Cmtes	PACs to Campaign Cmtes	Individuals to Leadership PACs	PACs to Leadership PACs	Total	Avg.	Ratio of Avg. Donations Received by Cmte. Members vs. Other Lawmakers in Chamber
Banking Cmte. Members (Senate)	$4,589,194	$2,014,207	$119,850	$387,900	$7,111,151	$309,180	2.3 to 1
Other Sens.	$7,012,944	$2,075,585	$265,200	$1,050,750	$10,404,479	$139,901	--
Finance Cmte. Members (House)	$3,601,659	$5,659,887	$42,050	$524,386	$9,827,982	$138,422	2.4 to 1
Other Reps.	$11,127,875	$7,880,347	$352,420	$1,548,300	$20,908,942	$57,600	--
All	$26,331,672	$17,630,026	$779,520	$3,511,336	$48,252,554	$90,192	--