Press Releases

Frank Responds to Reports of Campaign Contributions to Reward Opponents of Financial Reform

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Washington, DC, July 26, 2011 | comments

Congressman Barney Frank today released the following statement in response to press reports that Republican leaders, who have strongly opposed Wall Street reform, are receiving greatly increased campaign contributions from Wall Street firms.  An article published by Bloomberg News states that campaign contributions to House Speaker John Boehner have increased six-fold over the same period in the last election cycle, and that “three of the biggest sources of Boehner’s campaign cash are employees of three Wall Street investment houses.” 

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Congressman Barney Frank today released the following statement in response to press reports that Republican leaders, who have strongly opposed Wall Street reform, are receiving greatly increased campaign contributions from Wall Street firms.  An article published by Bloomberg News states that campaign contributions to House Speaker John Boehner have increased six-fold over the same period in the last election cycle, and that “three of the biggest sources of Boehner’s campaign cash are employees of three Wall Street investment houses.” 

“If anyone still doubts that some on Wall Street yearn for the good old days when the financial services industry could engage in irresponsible and deeply damaging practices without regulation, here is the proof.  Those that oppose the financial reform law and were unable to block it last year are now providing substantial backing to those who are attempting to undermine it.”

“They are funding Republican opponents of financial reform who are proposing to block efforts to prevent price-inflating speculation on food and energy until late 2012 and to gut the Consumer Financial Protection Bureau, effectively putting bank regulators, which have failed miserably in the past, back in charge of consumer protection.  Last week, they proposed to repeal a provision in the financial reform law which holds rating agencies legally liable when they make misstatements in sales prospectuses.  And they want to restrict the amount that is needed by the SEC to protect investors from fraud and abuse.”

“In short, they want to allow the financial services industry to resume its old ways, and some in the industry want to reward them for doing it.  With all the money flooding in we will have a tough battle ahead, but I will not be deterred and I’m ready to fight back.”


Wall Street Helps Boehner Boost Fundraising as House Speaker

BLOOMBERG NEWS

July 25, 2011

Since January, U.S. House Speaker John Boehner has raised $6.6 million for his campaign committee, six times more than the Ohio Republican received during the same period two years ago when he was the chamber’s minority leader.
 
Three of the five biggest sources of Boehner’s campaign cash this year are employees of three Wall Street investment houses, a shift from the 2010 election cycle when such contributors weren’t ranked among his top 10 donors.

Employees at the New York hedge fund Paulson & Co. contributed $61,050 to Boehner’s campaign account, more than any other company. New York-based Moore Capital Management LLP employees gave $53,000, while those at Cantor Fitzgerald LP donated $45,000.

No one from any of those companies donated to Boehner for his 2010 re-election campaign, according to the Center for Responsive Politics, a Washington-based research group that tracks political money.

Republican consultant Eddie Mahe said he had “no doubt” Wall Street has been betting that the House Republican majority would lead the effort to “repeal or at least modify” the revised financial regulations enacted last year.

Armel Leslie, a spokesman for Paulson & Co., Patrick Clifford, a spokesman for Moore Capital, and Bob Hubbell, a spokesman for New York-based Cantor Fitzgerald, all declined to comment on campaign donations.

Republican Opposition

Boehner and House Republicans last year opposed passage of the revamped rules for the financial industry, which was blamed for triggering the worst economic downturn since the Great Depression.

President Barack Obama signed those new rules into law a year ago this month. Since taking control of the House, the Republican majority has moved to undo parts of the legislation, although the Democratic Senate has prevented major changes.
 
Boehner received most of the donations from Paulson & Co., Moore Capital and Cantor Fitzgerald in June, the same month the House voted along party lines to cut the budget of the Commodity Futures Trading Commission, which is writing most of the new derivatives rules, and the House Appropriations Committee voted to limit funding for the new consumer protection bureau.

House Republicans have also opposed Democratic efforts to tax carried interest, the share of profits paid to asset managers, as ordinary income rather than at the lower capital gains rate.

Carried Interest

Some Democrats, including Representative Sander Levin of Michigan, are promoting that tax change as part of legislation to reduce the deficit and raise the U.S. debt limit.

Levin’s brother and fellow Michigan Democrat, Senator Carl Levin, endorsed the proposal in a floor speech last month.

“One example of the kind of tax breaks and tax loopholes that we Democrats seek to change is the unconscionable tax break given to hedge fund managers,” he said. “Recognizing carried interest for what it is would increase tax fairness for working Americans who pay their fair share of taxes. They have the right to expect that the wealthy do the same.”
 
Officials of both Paulson & Co. and Moore Capital sit on the board of directors of the hedge funds’ Washington-based trade group, the Managed Funds Association, which spent $2 million in the first six months of this year lobbying Congress on financial regulations and other issue, according to its lobbying disclosure report.
 
Cory Fritz, a spokesman for Boehner’s PAC, didn’t respond to requests for comment.
 
Securities Industry

In 2009-10, the combined giving from the securities industry made it Boehner’s biggest business-sector donor -- with $353,050 in contributions, according to the Center for Responsive Politics, a Washington-based research group.
 
Employees in the securities and investment industry, the biggest corporate source of campaign cash for federal candidates, have given 52 percent of their money to Republicans this year, according to the center. Hedge fund employees have given 56 percent to the Republicans.

“There’s no better fundraising strategy than having power, and Boehner obviously has a lot of it,’ said Bill Allison, editorial director for the Sunlight Foundation, a Washington- based watchdog group.

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