Lobbying Limits on Wall Street
The move by American International Group Inc., the financial-services firm receiving a massive $123 billion bailout from the federal government, to stop all of its lobbying efforts on Capitol Hill signals a shift in how Wall Street firms are reacting to the government-backed recovery plan.
The Wall Street Journal reported last week that AIG was "still engaged in a state-by-state effort to soften new federal regulations requiring mortgage originators to get licenses and provide extensive background information."
The nonpartisan Center for Responsive Politics reported that AIG spent nearly $11.4 million last year on lobbying.
AIG's move comes as congressional lawmakers push for tighter controls on lobbying by such firms.
Sen. Dianne Feinstein (D-Calif.) announced (statement) she would propose a bill requiring that investment banks and private firms benefiting from the Treasury's $700 billion financial-markets rescue plan be banned from lobbying with that money.
Currently, only Freddie Mac and Fannie Mae are banned from such lobbying activities, as part of their government conservatorships.
The Center for Responsive Politics has found that the finance, insurance and real-estate industries have spent more than $230 million so far this year on lobbying.
Politico reported that congressional anti-lobbying sentiment might result in a "very delicate, hands-off, non-aggressive lobbying," one financial services lobbyist said.
But the lobbying proposal has its critics. Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, called AIG's decision to stop lobbying "insane" and Daniel Clifton, head of policy research for the investment advisory firm Strategas, said "the more you lobby, the better you perform relative to your peers," Politico reported.
By Derek Kravitz |
October 21, 2008; 2:43 PM ET
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