A Year Ago almost to the Day…
On April 5, 2012, I wrote the following about something Scott Garrett was doing as the Chairman of the Financial Services Subcommittee on Capital Markets:
A second piece of legislation passed Garrett’s committee – with Garrett as a primary cosponsor would prevent the CFTC and the SEC from regulating derivative trades by overseas subsidiaries of American companies. In other words, the same bad actors who helped cause the worst economic recession since the Great Depression could simply conduct their derivative trading through overseas subsidiaries and go back to doing business as usual as they did before Dodd-Frank.
At the end of March 2013, Scott Garrett reintroduced the same legislation – HR 1256 for the new session of Congress. Senator Carl Levin commented on what Garrett and his colleagues were trying to do far better than I could ever hope to do:
“Last year, some members of Congress supported watering down Dodd-Frank derivative safeguards, but abandoned those efforts after the world learned that JPMorgan Chase had lost billions of dollars on derivative trades. It is incredible that less than a week after new JPMorgan Whale hearings detailed how the bank’s London office piled up risk, hid losses, and dodged regulatory oversight, that some House members are again supporting the weakening of derivative safeguards.”
Silla Brush of Bloomberg looked at H.R. 1256. Brush quotes Americans for Financial Reform’s Marcus Stanley’s description of the bill as “an attempt to derail the [CFTC’s cross-border] guidance and tie down the ability of the CFTC to do anything.” Stanley also made the point that “the major Wall Street banks have literally thousands of subsidiaries in dozens of countries, so proper inter-affiliate regulation is crucial… If cross-border derivatives rules are weakened, you will have regulatory races to the bottom. If both these bills [Stanley is referencing a similar bill put forward in the House Agriculture Committee] pass, it’s worse than the individual parts, as financial firms are expert at moving money and will use both to effectively evade regulations.”
This is disgraceful. Scott Garrett is not protecting the interests of Main Street. In fact, Scott Garrett is putting our financial interests in peril to the benefit of his Wall Street masters. If you think I’m being hyperbolic consider that in the last election cycle, Scott Garrett received the following contributions from the financial services sectors…
Securities & Investments $532,020 (4th most among House Members)
Commercial Banks $136,049 (10th most among House Members)
Credit Unions $23,000 (8th most among House Members)
Hedge Funds $95,300 (2nd most among House Members)
Mortgage Bankers & Brokers $27,472 (5th most among House Members)
For those of you wishing to check your math, all these contributions to Scott Garrett add up to $813,841.
Ask yourself what motivates Scott Garrett to do what he does and then consider what it will take for you to do something definitive to help defeat him in 2014.