Wall Street firms and banks are apparently “helping out” with the difficult job of drafting legislation. The New York Times’ Eric Lipton and Ben Protess report that it looks like some bills which are being passed through various congressional committees were essentially written by banks.
The news comes just a day after it became apparent that Wall Street firms may have been “helping” work on trade agreements as a way to dodge some of the changes being made under the Dodd-Frank Act.
A Bill Written By Citigroup?
The New York Times said it reviewed emails which indicate that a bill which went right through the House Financial Services Committee earlier this month was mostly written by Citigroup Inc (NYSE:C). The Treasury Department objected to the bill, which would make many broad areas of trade exempt from any new regulations.
The newspaper said the recommendations of Citigroup Inc (NYSE:C) could be seen in more than 70 of the 85 lines in the bill passed by the House committee. It said that two of the most important paragraphs were taken almost word for word from what Citigroup had prepared in collaboration with other Wall Street firms.
More Contributions For Lawmakers Who Support Wall Street
Lipton and Protess also report that lawmakers who support the bills Wall Street has championed have received two times as much in campaign contributions from financial firms compared to lawmakers who opposed the same bills. That’s according to analysis done by the nonprofit group MapLight.
Wall Street has also held fundraisers for legislators who sponsored its bills. The NYT reported that at one particular dinner, lobbyists and corporate executives paid as much as $2,500 for a private dinner with Rep. Sean Patrick Maloney, a New York Democrat who sponsored the bill supported by Citigroup, at a Washington restaurant.
Lobbyists did admit they helped draft the legislation, although they say this is common practice. Also they said some of the changes in the bills have received support from Fed chairman Ben Bernanke. According to the lobbyists, the changes were not an effort to dodge Dodd-Frank but rather to make a compromise over it.