[Cross-posted from the ProgressMass blog. Like ProgressMass on Facebook and follow on Twitter.]
Perhaps you saw this bit of news earlier in the week:
Embattled banker drops out of Romney fund-raiser
Mitt Romney’s campaign says that Bob Diamond, the embattled former chief executive of Barclays bank, will no longer be cohosting a London fund-raiser for the presumptive Republican nominee.
Diamond, a Concord, Mass., native who oversees one of the world’s largest banks, has been embroiled in a rate-fixing scandal in Britain that is threatening to expand.
The bank’s chairman resigned on Monday, and Diamond stepped down as CEO Tuesday amid pressure from some in Parliament. The government has launched an inquiry to find out if there was any criminal wrongdoing.
The scandal involves manipulating the London Interbank Offered Rate, or Libor, which is used to set the rates for a range of consumer products including mortgages, credit cards, and bank loans. Barclays has already been fined $453 million in a settlement with US and British authorities.
It might not shock you to learn that the “embattled” Mr. Diamond happens to have previously contributed to “Wall Street favorite” Republican Scott Brown’s campaign. From OpenSecrets.org:
Over the previous few months, we’ve seen Republican Scott Brown winning (in landslides) the “primaries” for support among Goldman Sachs and JPMorgan Chase. With Barclays joining the ranks of the scandal-ridden financial giants, it seemed an appropriate time to ask:
Who’s winning the Barclays Primary?
According to OpenSecrets.org, Barclays currently ranks as Republican Scott Brown’s 15th largest source of contributions at $41,999, comprised of $34,999 from individuals at Barclays and $7,000 from Barclays’ PAC(s). By comparison, a donor look-up of Barclays-employed contributors to Brown’s Democratic opponent, Elizabeth Warren, turns up just two individual contributions totaling $2,900. In other words:
With another landslide “primary” win for Republican Scott Brown among the scandal-ridden financial giants, this again raises the question of why Republican Scott Brown is winning these “primaries” in one-sided landslides. Why is Republican Scott Brown such a favorite of Wall Street?
The answer, as many of us know, appears to be that Republican Scott Brown has worked so diligently on Wall Street’s behalf to water down regulations:
The temptations of Scott Brown
When Massachusetts Republican Scott Brown addressed supporters after his upset victory in January, he declared there would be “no more closed-door meetings or back-room deals by an out-of-touch party leadership.”
Some would argue that’s exactly what he just did in the final push on Wall Street reform.
After private talks with Treasury Secretary Timothy Geithner, Senate Banking Committee Chairman Chris Dodd and other top Democrats, Brown scored a series of exemptions from the “Volcker rule” — which would bar certain forms of proprietary trading — a provision pushed by big Massachusetts banks and financial firms, including State Street Corp. and Mass Mutual.
Of course, Wall Street knows where its bread is buttered:
Donations poured in as Brown’s role grew
With vote near, financial sector delivered $140kCampaign contributions to Senator Scott Brown from the financial industry spiked sharply during a critical three-week period last summer as the fate of the Wall Street regulatory overhaul hung in the balance and Brown used the leverage of his swing vote to win key concessions sought by firms.
From mid-June until the Fourth of July, according to a Globe analysis of his campaign finance reports, the Massachusetts senator took in $140,000 from banks and investment firms and their executives, including companies based in the state, such as MassMutual and State Street Corp. That is 400 percent more than the $28,000 received on average by all Republican senators during the same three weeks.
As the money poured in, Brown and his Senate staff were working both publicly and behind the scenes to scuttle $19 billion in fees on the financial industry that would have paid for part of the regulatory overhaul, and to weaken a provision intended to curb certain types of investment activities by banks and insurance companies.
As we all know, even after financial reform was passed into law, Republican Scott Brown continued to work diligently on Wall Street’s behalf to further loosen the rules:
Senator Brown sought to loosen bank rules
Senator Scott Brown has trumpeted his role in casting the deciding vote in favor of the 2010 Wall Street overhaul, but records show that after he voted for the law, he worked to shield banks and other financial institutions from some of its tough provisions.
E-mails between Brown’s legislative director and US Treasury Department officials show that Brown advocated for a loose interpretation of the law so that banks could more easily engage in high-risk investments. […]
Brown’s role in helping to loosen the Volcker rule in advance of casting his vote on Dodd-Frank has been well-documented. Notably, he helped create a provision that allows banks to invest up to 3 percent of their money in riskier investments such as hedge funds and private equity funds, and to own up to 3 percent of an individual fund – additions that won him Wall Street support.
But e-mails obtained by the Globe show that Brown’s work on behalf of the financial sector did not stop when the law was passed. In the second stage, as regulators began the less publicly scrutinized task of writing rules amid heavy pressure from the banking sector, Brown urged the regulators to interpret the 3 percent rule broadly and to offer banks some leeway to invest in hedge funds and private equity funds.
With Republican Scott Brown operating as Wall Street’s personal U.S. Senator, it’s no wonder that Brown would, in landslide fashion, win the “primaries” for support from Goldman Sachs, JPMorgan Chase, and now Barclays, as well. A question Massachusetts voters may want to consider is whether we want a U.S. Senator who ardently defends the interests of Wall Street or one who fights for the Massachusetts Middle Class.
