TARP Recipients Continue Lobbying Spending

Financial institutions that received federal bailout money continued to spend heavily on lobbying efforts in 2009, while auto companies cut back on such expenditures by approximately one-third.

Eight major banks - Citigroup Inc., JPMorgan Chase & Co, Bank of America Corp., Goldman Sachs, Morgan Stanley, Wells Fargo & Co., State Street Corp. and Bank of New York Mellon Corp. -- spent a total of $12.4 million on lobbying in the first half of the year.

That was a touch more than what they spent in the corresponding time period a year ago, The Hill newspaper reported. JP Morgan led the group, spending $3.07 million from January through June. Citigroup came in second with $2.9 million in lobbyist spending.

Lobbying by bailed-out companies has been controversial. Critics have said that banks that receive taxpayer money should not be allowed to turn around and use that money to influence lawmakers.

"They should not be allowed to lobby,'' Craig Holman, a government affairs lobbyist for Public Citizen, told McClatchy News Service. "As long as they hold on to a very substantial portion of public funds, and are publicly owned essentially, they should not be using any of their funds for lobbying purposes or campaign contributions."

The banks have said that they have not used bailout money for lobbying purposes and that the fees are paid from other business sources. "We don't use TARP funds," Shirley Norton, a spokeswoman for Bank of America, told McClatchy.  "We're very sensitive to the issue of using government funds.''

Unlike the banking sector, however, lobbying by the automobile industry declined by a significant margin in 2009 -- a clear sign that banks, having survived an initial panic, are far more confident in their future prospects than Chrysler LLC and General Motors Corp., both of which are in the middle of wholesale restructurings that included brief stops in bankruptcy court.

GM spent $5.56 million on lobbying in the first six months of 2009, down from the $7.08 million spent in the same period in 2008. According to The Hill, Chrysler spent $1.42 million, compared with $2.78 million the year before, and auto and mortage lender GMAC LLC spent $660,000 versus $1.15 million in the same period in 2008.

Some companies have shut down their lobbying operations altogether. American International Group, Inc., which once had an impressive army of lobbyist on Capitol Hill, no longer has a single lobbyist working on its behalf.