A group of moderate Democrats held private meetings this fall with executives from Goldman Sachs and JP Morgan Chase, while in the midst of pushing successfully to water down landmark legislation designed to beef up regulation of the financial industry.
In mid October, members of the New Democrat Coalition (NDC), a caucus of pro-business Democrats, traveled to New York City. According to an emailed itinerary for the trip drawn up by an event planner working for the group and obtained by TPMmuckraker, members met on October 12 with executives from Goldman, and the following day with execs from JP Morgan. Sandwiched between those events was a fundraiser for the New Dems, and a meeting with CEOs from Marsh and McLellan Companies, a consulting and insurance firm.
Based on the itinerary, the Goldman meeting was to be attended by Reps. Joe Crowley and Scott Murphy of New York, and Gabrielle Giffords of Arizona. The JP Morgan meeting was to be attended by Reps. Crowley, Murphy, Melissa Bean of Illinois, John Adler of New Jersey, and Jim Himes of Connecticut — a former Goldman banker. Crowley serves as NDC’s chair, and Bean as its vice chair.
According to a Hill aide familiar with the trip, the Wall Street meetings almost certainly didn’t appear on any of the members’ official schedules, because they were organized through NDC as part of a campaign trip — hence the fundraiser — rather than through the members’ offices. If that’s the case, the public had no way to know they occurred.
A spokeswoman for the NDC declined to comment on the meetings, referring questions to the individual members involved. None of the members named above immediately responded to requests for comment.
The NDC, founded in 1997, wields serious clout on financial issues. Of its 68 members, 15 sit on the House Financial Services committee, which is in charge of the financial regulatory overhaul currently making its way through Congress.
A recent article in BusinessWeek offered a detailed account of the New Democrats’ success in watering down major aspects of the legislation this fall. Here’s one example, among several cited by the magazine:
The Obama administration wanted to require that derivatives — the complex financial instruments, currently traded in over-the-counter deals, that helped cause the financial crisis — be traded on regulated platforms. But derivatives are big business for Wall Street, especially for the largest banks like Goldman and JP Morgan, and the change would have significantly reduced their profits. So, the magazine reported, those banks and others lobbied New Dems, including Bean, to weaken the administration’s plan. They, in turn, pressed Rep. Barney Frank, who as chair of the Financial Services committee is quarterbacking the reform effort in the House.
The push succeeded. The recently-passed House bill won’t require banks to trade derivatives on regulated platforms, though they will have to report the deals to regulators.
The New Dems have been major beneficiaries of Wall Street’s largesse this cycle. According to online records examined by TPMmuckraker, Bean, Himes, and Crowley were the House’s top three recipients of campaign contributions from JP Morgan for 2009-10. They took in $7000, $5400, and $5000 respectively.
Additional reporting by Nick Pinto