In late April, the U.S. Senate rejected an amendment to the housing bill that would have allowed bankruptcy judges to provide relief for troubled homeowners by modifying mortgage payments. Among those who opposed the measure, which was known as "cramdown," was Sen. Chuck Grassley, the ranking member of the Senate Finance Committee.
"It will cause interest rates to go up and will make it more difficult for people to get a mortgage," the Iowa Republican said at the time.
Two months later, the people who benefited from Grassley's vote are poised to shower him with campaign donations. The senator is hosting a fundraiser on Monday evening with lobbyists and a political action committee representing, among others, key players in the mortgage and private equity industries.
The event will take place at the swank Capitol Hill restaurant, The Monocle, steps away from the U.S. Senate, and is soliciting donations of $2,500 to "host" or $1,000 for PAC or personal contributions.
The organizers of the event include Smith "Smitty" Davis, a lobbyist for the mega-firm Akin, Gump, Strauss, Hauer & Feld, Pace Bradshaw of the Mortgage Bankers Association, Suzanne Hutchinson of the Mortgage Insurance Companies of America, and the political action committee for Aflac Insurance.
According to research compiled by the good-government group Public Campaign and taken from public records, Davis represents some of the very companies affected by Grassley's cram-down vote under the purview of the Finance Committee. Among them are the often-criticized rating's agency, Moody's, which paid at least $890,000 for Davis' services and the Private Equity Council ($750,000). The Mortgage Insurance Companies of America has paid Davis and his firm $980,000 to lobby on its behalf including, $220,000 this year alone for work on "the housing recovery and possible capital assistance." Smith has also lobbied on behalf of the Healthcare Liability Reform Coalition, earning his firm $140,000. Grassley, as ranking member of Finance, is intimately involved in crafting healthcare reform legislation.
Bradshaw, likewise, has a whole host of clients in the banking and housing industry. He is a registered lobbyist for the Mortgage Bankers Association. Since 2007, the MBA has spent nearly $8 million lobbying, including $935,000 in the first quarter of this year. The group is active on every key issue involving housing policy including leading the fight to defeat cram down.
"We need to keep fighting this," MBA's chairman, David Kittle, told assembled members at their annual gathering. "We need to keep giving to the PAC, on a regular basis."
Hutchinson, meanwhile, is the executive vice president and a registered lobbyist for the Mortgage Insurance Companies of America, which has spent $8.5 million lobbying Washington since 2007. In 2009 alone, the group spent $215,000 to lobby on three specific items: The Federal Housing Recovery Plan, the Helping Families Save Their Homes Act and the Hope for Homeowners Program.
For good government groups, the presence of these three lobbyists as well as the Aflac PAC, which has given $14.3 million in campaign contributions over the past two decades, at the Grassley fundraiser is troubling. The senator, according to the Center for Responsive Politics, has raised nearly $2.8 million from the finance, insurance, and real estate industries over the course of his career. But now, more than ever, he is playing an integral role in crafting housing policy, health care, and financial regulatory reform.
"Sen. Grassley appears to be cashing in from the mortgage bankers for his recent vote to prevent bankruptcy judges from renegotiating the terms of mortgages in order to prevent foreclosures to keep people in their homes," said David Donnelly, national campaigns director of Public Campaign Action Fund. "The lobbyists and PAC hosting this event have made it clear that they will continue to fight against the types of financial market reforms now under discussion in Washington."