Financial Blog

Disempowered Bankers Start Super PAC, Reveal Plans for World Domination

Members of the American Bankers Association recently announced that after years of being ignored in the halls of power, the industry will at last be creating its own super PAC to serve as its proverbial big stick.

For too long, the banking industry has been stuck at 13 on the list of industries giving the most to members of Congress, drowned out by such vehemently anti-banking interests as Misc. Finance (12), Lobbyists (7), Real Estate (5), and Securities and Investment (3).

American Banker editor-at-large Barbara Rehm writes, Frustrated by a lack of political power and fed up with blindly donating to politicians who consistently vote against the industrys interests, a handful of leaders are determined to shake things up.

While I am highly skeptical of the sentiment that Congress is not afraid of bankers, given that banking lobbyists outnumber banking reform advocates 25-1 and that the Chairman of the Senate Financial Services Subommittee seems to believe that the banks own the place, the most ridiculous thing about this announcement may just be the bankers willingness to reveal their strategy for skirting the non-coordination rules.

The Supreme Court and FEC explicitly prohibit Super PACs from coordinating with candidates and their campaigns. I generally interpret this to mean that having a direct conversation with a candidate is a violation of the rules. Yet Matt Packard, the Super PACs chairman, is apparently quite excited about using his new stick in that context, If someone says I am going to give your opponent $5,000 or $10,000, you might say, Yea, okay. But if you say the bankers are going to put in $10,000 or $500,000 or $1 million into your opponents campaign, that starts to draw some attention.

When is Packard imagining himself having this conversation and what will he be asking for to call off the hounds? This statement speaks volumes about how the industry thinks about its involvement in politics.

Note too that Packard says they may be directing money into your opponents campaign. He means that in the same way that one might give to Restore Our Future to support Romney right? Nope. While the coordination rules are twisted enough when it comes to candidate specific super PACs, Friends of Traditional Banking plans to go even further. The independent expenditure-only committee, according to Rehms description, will exist not to touch the money, but to direct it to the candidates actual campaigns.

This is starting to feel like the scene where the Bond villain reveals his whole plan for world domination. Even with a feckless FEC on the beat, Friends of Traditional Banking seems to be inviting federal investigation.

Rehm reports that the first thing prospective donors have been asking Utah Bankers Association president Howard Headlee is, Is this legal? Luckily, Headlee seems to have a Trevor Potter button for that.

Correction: A previous version of this post incorrectly stated that the American Bankers Association created Friends of Traditional Banking. It is not part of this effort.

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