Blame Grover Norquist for Dismantling Financial Services Reform, Democracy

If you need evidence that this country has been hijacked by special interests, look no further than the hell that compromised politicians are putting Elizabeth Warren through.
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If you need evidence that this country has been hijacked by special interests, look no further than the hell that compromised politicians are putting Elizabeth Warren through.

As Huffington Post reporter Michael McAuliff observed, Warren was repeatedly harassed and even called a liar by members of the so-called House Oversight and Government Reform committee at a hearing on the newly created Consumer Financial Protection Bureau. Warren, appointed by President Obama to implement the consumer watchdog mandated by last year's Dodd-Frank financial reform law, was also accused of trying to leave the hearings before they were over. Oh, and she's being asked to testify again "in the near future... because of your unwillingness to provide direct and responsive answers," according to Darrell Issa, chairman of the committee.

This nastiness had nothing to do with political differences and everything to do with the perfectly legal bribery system in Capitol Hill in which politicians are given "campaign contributions" by an industry in exchange for fighting reform of the industry and the promise of a future job lobbying for the industry.

Take the three bills passed by the House Financial Services Committee on May 13, which are designed to weaken the CFPB, which goes live on July 21. Please. Rep. Sean Duffy's bill (he received $173,125 from the Finance, Insurance and Real Estate industries, or FIRE, in the 2010 election cycle) would make it easier for CFPB's decisions to be reversed by the Financial Oversight Stability Council, the same regulators that allowed the last financial crisis to happen. Rep. Shelley Moore Capito's bill ($355,747 from FIRE) would delay the agency's opening indefinitely. And Spencer Bachus, the U.S. House of Representative's third biggest recipient of donations from FIRE, totaling $7.1 million over time, according to Bloomberg Businessweek, has introduced a bill that would have a five-person commission run the agency instead of a director.

As I said in a previous post, the finger of blame for this corruption points directly at Grover Norquist, who is more famous for his founding of the anti-tax group, Americans for Tax Reform, which not only exhorts Republicans to pledge never to raise taxes but to never end tax breaks, despite the fact that doing so would eliminate the deficit. But his even more evil contribution is the K Street Project, co-founded in 1995 with then-House Republican Whip and now-crook Tom DeLay of Texas. The idea: Republicans would take over the big lobbying firms as successfully as they took hold of the House. As a result, lobbying outlays more than doubled between 1998 and 2008 alone and 42% of former House members and 50% of Senators became lobbyists between 1998 and 2004, according to Public Citizen. And as I pointed out in my book, America, Welcome to the Poorhouse, Congresspeople who have their eye on a K Street job tend to draft legislation that benefits their future employers.

For some bizarre reason, even though a judge has to recuse him or herself from presiding over a trial when there's a conflict of interest -- i.e., the judge owns stock in a company run by the defendant -- there's no law barring elected officials who serve on committees that oversee industries from collecting campaign contributions from members of those industries. Unfortunately, McCain-Feingold does not address this conflict and while former Senator Russ Feingold has been an outspoken critic of "the revolving door between Wall Street and Washington," to my knowledge, he's never introduced legislation that would lock that door.

The only attempt at reform has been the passage of the Honest Leadership and Open Government Act of 2007, which bans lobbyists from buying meals and trips for, and giving gifts to, members of Congress and their aides but doesn't limit the contributions themselves. As Rep. Gary L. Ackerman, a Congressman from New York, told the New York Times, "You as a lobbyist cannot buy me a dinner for $40., the lobbyist can give my campaign $1,000 and the campaign can pay for our dinner. That's perfectly legal, and it's perfectly dumb."

Most likely what's needed is a referendum prohibiting "conflicted contributions" that is voted on by the general public, given that politicians like bribes and cushy lobbying jobs too much to vote against this practice. Unfortunately, at least according to Wikipedia, the U.S. Constitution doesn't provide for referendums at the federal level.

Incredibly, despite the fact that there are four groups on Capitol Hill focusing on corrupt political practices: The Campaign Legal Center, the Project on Government Oversight, the Citizens for Responsibility and Ethics and Democracy 21 -- and one group that does an excellent job of detailing which politicians get corrupting contributions: the Center for Responsive Politics -- as far as I can tell none of these groups have attempted to reverse Norquist's bloodless coup. Democrats have to realize that what's at stake isn't Obama's political survival but that of democracy itself.

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