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Banks Write Legislation
I have covered compromised HFT reports in the past and it seems correspondence between TBTF and Washington have gone beyond just generic compromise. Fraud and corruption between Wall Street and Washington is nothing new to those who have trusted Zerohedge for the 4+ years. The NYT released a piece yesterday which covered the House committee's financial services bill which contained two word-for-word paragraphs (two words were altered into their plural state) compiled by Citigroup along with other Wall Street banks.
It's no surprise we have lazy lawmakers but for them to be so openly spineless and incompetent in front of a public who seemingly has instant access to a plethora of information is just mind-boggling. Do we really think that just pulling a lever every so many years in a booth is going to alter the course of fraud in the American government? What's it matter when appointments are made left and right by the very people we're directly voting for? Our Dear Leader took time away from that skeet shooting he does "all the time" to appoint two Senate aids to a five member SEC commission. Clearly the SEC is still learning that lawyers are not going to cut it when it comes to monitoring corruption, nor do they understand the national threat that is our fragmented and perverted equity market microstructure driven by such esoteric order-types such a Post No Preference Blind Limit Order and created through the buddy system of exchange/order volume producer.
Via NYT:
WASHINGTON — Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.
One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.
In a sign of Wall Street’s resurgent influence in Washington,
Citigroup’s recommendations were reflected in more than 70 lines of the
House committee’s 85-line bill. Two crucial paragraphs, prepared by
Citigroup in conjunction with other Wall Street banks, were copied
nearly word for word. (Lawmakers changed two words to make them plural.)
The lobbying campaign shows how, three years after Congress passed
the most comprehensive overhaul of regulation since the Depression, Wall
Street is finding Washington a friendlier place.
The cordial relations now include a growing number of Democrats in
both the House and the Senate, whose support the banks need if they want
to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.
This legislative push is a second front, with Wall Street’s other
battle being waged against regulators who are drafting detailed rules
allowing them to enforce the law.
And as its lobbying campaign steps up, the financial industry has
doubled its already considerable giving to political causes. The
lawmakers who this month supported the bills championed by Wall Street
received twice as much in contributions from financial institutions
compared with those who opposed them, according to an analysis of
campaign finance records performed by MapLight, a nonprofit group.
In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night,
corporate executives and lobbyists paid up to $2,500 to dine in a
private room of a Greek restaurant just blocks from the Capitol with
Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor
of the bill championed by Citigroup.
Industry officials acknowledged that they played a role in drafting
the legislation, but argued that the practice was common in Washington.
Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank.
“We will provide input if we see a bill and it is something we have
interest in,” said Kenneth E. Bentsen Jr., a former lawmaker turned Wall
Street lobbyist, who now serves as president of the Securities Industry
and Financial Markets Association, or Sifma.
The close ties hardly surprise Wall Street critics, who have long
warned that the banks — whose small armies of lobbyists include dozens
of former Capitol Hill aides — possess outsize influence in Washington.
“The huge machinery of Wall Street information and analysis skews the
thinking of Congress,” said Jeff Connaughton, who has been both a
lobbyist and Congressional staff member.
Lawmakers who supported the industry-backed bills said they did so
because the effort was in the public interest. Yet some agreed that the
relationship with corporate groups was at times uncomfortable.
“I won’t dispute for one second the problems of a system that demands
immense amount of fund-raisers by its legislators,” said Representative
Jim Himes, a third-term Democrat of Connecticut, who supported the
recent industry-backed bills and leads the party’s fund-raising effort
in the House. A member of the Financial Services Committee and a former
banker at Goldman Sachs,
he is one of the top recipients of Wall Street donations. “It’s
appalling, it’s disgusting, it’s wasteful and it opens the possibility
of conflicts of interest and corruption. It’s unfortunately the world we
live in.”
The passage of the Dodd-Frank Act, which took aim at culprits of the
financial crisis like lax mortgage lending and the $700 trillion
derivatives market, ushered in a new phase of Wall Street lobbying. Over
the last three years, bank lobbyists have blitzed the regulatory
agencies writing rules under Dodd-Frank, chipping away at some
regulations.
But the industry lobbyists also realized that Congress can play a critical role in the campaign to mute Dodd-Frank.
The House Financial Services Committee has been a natural target. Not
only is it controlled by Republicans, who had opposed Dodd-Frank, but
freshmen lawmakers are often appointed to the unusually large committee
because it is seen as a helpful base from which they can raise campaign
funds.
For Wall Street, the committee is a place to push back against
Dodd-Frank. When banks and other corporations, for example, feared that
regulators would demand new scrutiny of derivatives trades, they
appealed to the committee. At the time, regulators were completing
Dodd-Frank’s overhaul of derivatives, contracts that allow companies to
either speculate in the markets or protect against risk. Derivatives had
pushed the insurance giant American International Group
to the brink of collapse in 2008.
The question was whether regulators
would exempt certain in-house derivatives trades between affiliates of
big banks.
As the House committee was drafting a bill that would force
regulators to exempt many such trades, corporate lawyers like Michael
Bopp weighed in with their suggested changes, according to e-mails
reviewed by The Times. At one point, when a House aide sent a potential
compromise to Mr. Bopp, he replied with additional tweaks.
In an interview, Mr. Bopp explained that he drafted the proposal at
the request of Congressional aides, who expressed broad support for the
change. The proposal, he explained, was a “compromise” that was actually
designed to “limit the scope” of the exemption.
“Everyone on the Hill wanted this bill, but they wanted to make sure
it wasn’t subject to abuse,” said Mr. Bopp, a partner at the law firm
Gibson, Dunn who was representing a coalition of nonfinancial
corporations that use derivatives to hedge their risk.
Ultimately, the committee inserted every word of Mr. Bopp’s
suggestion into a 2012 version of the bill that passed the House, save
for a slight change in phrasing. A later iteration of the bill, passed
by the House committee earlier this month, also included some of the
same wording.
And when federal regulators in April
released a rule governing such trades, it was significantly less
demanding than the industry had feared, a decision that the industry
partly attributed to pressure stemming from Capitol Hill.
Citigroup and other major banks used a similar approach on another
derivatives bill. Under Dodd-Frank, banks must push some derivatives
trading into separate units that are not backed by the government’s
insurance fund. The goal was to isolate this risky trading.
The provision exempted many derivatives from the requirement, but
some Republicans proposed striking the so-called push out provision
altogether. After objections were raised about the Republican plan,
Citigroup lobbyists sent around the bank’s own compromise proposal that
simply exempted a wider array of derivatives. That recommendation, put
forth in late 2011, was largely part of the bill approved by the House
committee on May 7 and is now pending before both the Senate and theHouse.
Citigroup executives said the change they advocated was good for the financial system, not just the bank.
“This view is shared not just by the industry but from leaders such
as Federal Reserve Chairman Ben Bernanke,” said Molly Millerwise
Meiners, a Citigroup spokeswoman.
Industry executives said that the changes — which were drafted in
consultation with other major industry banks — will make the financial
system more secure, as the derivatives trading that takes place inside
the bank is subject to much greater scrutiny.
Representative Maxine Waters,
the ranking Democrat on the Financial Services Committee, was among the
few Democrats opposing the change, echoing the concerns of consumer
groups.
“The bill restores the public subsidy to exotic Wall Street
activities,” said Marcus Stanley, the policy director of Americans for
Financial Reform, a nonprofit group.
But most of the Democrats on the committee, along with 31
Republicans, came to the industry’s defense, including the seven
freshmen Democrats — most of whom have started to receive donations this
year from political action committees of Goldman Sachs, Wells Fargo and other financial institutions, records show.
Six days after the vote, several freshmen Democrats were in New York
to meet with bank executives, a tour organized by Representative Joe
Crowley, who helps lead the House Democrats’ fund-raising committee. The
trip was planned before the votes, and was not a fund-raiser, but it
gave the lawmakers a chance to meet with Wall Street’s elite.
In addition to a tour of Goldman’s Lower Manhattan headquarters, and a meeting with Lloyd C. Blankfein, the bank’s chief executive, the lawmakers went to JPMorgan’s Park Avenue office. There, they chatted with Jamie Dimon, the bank’s chief, about Dodd-Frank and immigration reform.
The bank chief also delivered something of a pep talk.
“America has the widest, deepest and most transparent capital markets
in the world,” he said. “Washington has been dealt a good hand.”
- advertisements -

Obviously something will change.
What, congrescritters don't get the speech about "Why I'm richer than you are" ?
Revolution looks better every day. Violent...fuck the vote as it is nonsense. Words of Thomas Jefferson paraphrased...he knew that at some point you start killing the ruling class, the British in those times. Today it is bankers who rule America for their benefit.War looks great when you have nothing left to lose. Had enough yet? Congress is the stooge of the banks...totally in their pockets. Ok, time for some chill out material...
That's got to be the sovietization of the economy someone else was talking about...
Banks Write Legislation = Regulatory Capture
Thare's only one way to fix it; it's easy, but you have to think:
28th Amendment (The Constitutional Emergency Amendment)
Corporations are not persons and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:
1, prohibitions against any corporation;
a, owning another corporation,
b, becoming economically indispensable or monopolistic, or
c, otherwise distorting the general economy;
2, prohibitions against any form of intervention in the affairs of government by means of;
a, congressional lobbying
b, electoral sponsorship or advocacy
c, educational sponsorship or publication
d, media news reporting
3, provisions for;
a, the auditing of standardized, current, and transparent account books
b, closing the FRB and the establishment of state-owned banks
c, civil and criminal penalties to be suffered by corporate executives et al for violation of the terms of a corporate charter.
Optional: (or possible 29th amendment)
The 16th Amendment to the United States Constitution is hereby repealed and Congress shall re-write the U.S. Code to reflect the changes embodied herein.
This is great - since Congress is a wholly owned subsidiary of TBTF banking corporations, then presumably Congress would be declared illegal.
All of your points are fine, but first you need to get elected politicians who will legislate themselves out of a job.
Think: if you got elected via millions of dollars from Wall Str and/or the arms industry and/or AIPAC; would you vote yourself out of a job?
Think.
I used to be an idealist too, but that all got destroyed since 9/11 and the realization that Washington is evil.
The day that you get a proper investigation of 9/11 is the day that your proposals stand a chance.
It will never happen.
"It will never happen."
The one bright light is that they are incompetent.
They will "eat the host" and then the US Dollar will collapse.
Then we'll rise from the ashes!
Legislators neither write nor read any of the laws we have in this country. Not for a long time, they haven't.
John Conyers told you as much in "Fahrenheit 9/11". Love him or hate him, Michael Moore gave us one of the best insights to policymaking we have ever gotten or will ever get.
The real lawmakers in this dump we call Amerikkka are lobbyists and corporate hacks. The fake lawmakers are the ones we pay to enact these corporatist wish-lists. And, our CEO - i.e., the president - merely serves to sign this garbage into law.
There is Political Science 101 Amerikkkan style for you.
Ah John Conyers!
A few years ago I was a valued member of John Conyers' blog, but then another member of the blog made some slight criticism of Israel, or maybe it was Zionism.
I do not recall the details, but they certainly were not extreme criticisms.
Nevertheless this person got banned and I protested.
And then I got banned too, though Conyers - or one of his minions - continued to send me begging letters for funds.
Conyers is filth, but fronts as a clean member of Congress.
Don't believe him (or any politician) for a minute.
I've been waiting for about five years to get my own back on Conyers. Thanks for giving me the opportunity Tsar Pointless.
Banks Write Legislation
Really? You mean its not done by the fine men and women who go to Washington to make a difference, giving us hope we can believe in because we've been taxed enough, already?
Fucking shit-eaters...may they all burn in hell for etenity....
One of the things that troubles me is that historically there have been opposition groups and fighting amongst and between the powerful psychopathic parasites who run the financial and governmental sectors. However, it appears that the greatest accomplishment of the central bank plan has been to include virtually every single psychopathic parasite in the money sucking meme. Every psychopath either creates and embezzles money, is bribed and paid by those who create and embezzle money or has legal protection to steal money.
Who would have known that it could be so easy.... and it will continue until there are so many welfare psychopathic parasites that their money becomes worthless or the US loses its military power.
Beware of the false prophets, who come to you in sheep’s clothing, but inwardly are ravenous wolves.16“You will know them by their fruits. Grapes are not gathered from thorn bushes nor figs from thistles, are they?17“So every good tree bears good fruit, but the bad tree bears bad fruit.18“A good tree cannot produce bad fruit, nor can a bad tree produce good fruit.19“Every tree that does not bear good fruit is cut down and thrown into the fire.20“So then, you will know them by their fruits.
6“Do not give what is holy to dogs, and do not throw your pearls before swine, or they will trample them under their feet, and turn and tear you to pieces.
epic corruption of biblical proportions begets biblical context quotes
bitchez
Of course, 'No Arrests on Wall Street, But Over 7,700 Americans Have Been Arrested Protesting Big Banks', article by Zaid Jilani
« While Wall Street has escaped prosecutions, thousands of Americans have been arrested in the course of protests against the banks. As of May 2013, that number is 7,736 — according to the website Occupy Arrests, which tracks arrests. »
http://thecontributor.com/no-arrests-wall-street-over-7700-americans-hav...
Is that the same Financial Services Committee of CONgress that pretends to grill bankers and "hold them accountable"?
They must mean for their bribes and campaign donations.
Absolutely agree, but there's a bit of redundency in there, I think.
Campaign donations are indistinguishable from bribes.
Holding them accountable could also be re-phrased as 'the accounts I hold will never be accountable'