Banks and other companies taking federal bailout assistance spent $114 million on lobbying and campaign contributions last year, according to a new study.
The Treasury Department last month announced rules to curb lobbying by firms who get a cut of the latest release of $350 billion in Troubled Asset Relief Program funds. Critics have called those rules too little, too late – they don't affect the millions in lobbying fees already paid out by bailed-out firms, and they don't apply to lobbyists working the halls of Congress or regulatory agencies outside of Treasury.
"Taxpayers hope their money is being allocated entirely on the merits, but with Congress controlling how much money the Treasury gets to hand out, it will be impossible to completely exclude politics from this process," said Sheila Krumholz of OpenSecrets.org, which conducted the study.
Lawmakers who oversee the bailout were among the top recipients of campaign donations from bailed-out corporations, the study notes. Senate Banking Committee Chairman Christopher Dodd, D-Conn., took $854,200 during the 2008 election cycle from companies that would receive access to billions in TARP funds. His office did not immediately respond to a request for comment.
From the banking industry, Bank of America was the biggest spender among TARP fund recipients, according to the OpenSecrets.org report. Together with Merrill Lynch, with whom it recently merged, the bank spent $14.5 million to lobby Washington. The bank has received $45 billion in TARP funds, in addition to $10 billion received by Merrill Lynch.
Bank of America spokeswoman Shirley Norton said the total was closer to $10 million, but combining the two firms' 2008 payouts was inaccurate because they did not merge until this January. Norton added her company is careful not to use TARP funds to pay for their lobbying efforts. "We are very sensitive to the fact that we have taxpayer money," Norton said.
The bank has been under fire recently for other spending choices, including a Super Bowl event and a $140 million naming rights deal with the Carolina Panthers football team. The bank has said both deals are bringing in profits and estimated that for every $1 spent in sponsorships, the bank recoups $3.