Tennessee: Bailout backers got gifts from banks

Tennessee: Bailout backers got gifts from banks

April 5th, 2009 by Matt Wilson in News

Campaign donors aligned with banks that received federal bailout money contributed tens of thousands of dollars to area lawmakers, records show.

U.S. Sen. Saxby Chambliss, R-Ga., who received $113,198 from some of those donors, will continue to accept contributions from political action committees, said the senator's spokeswoman, Ashley Nelson. The senator voted for the $700 billion Troubled Assets Relief Program to help distressed banks.

"The Supreme Court has ruled political contributions are a form of speech and protected by the Constitution," she said.

However, Todd Womack, chief of staff for U.S. Sen. Bob Corker, R-Tenn., said the senator's staff is looking at whether to accept contributions from bailout recipients in the future but has not made a decision. Sen. Corker also voted for TARP funding.

U.S. Sen. Johnny Isakson, R-Ga., said through a spokesman that he will "examine such funds closely before deciding whether or not to accept them." The senator voted for the funding.

Congress voted in October to pass the TARP, which provided operating capital to banks and other companies by buying preferred stock in the businesses.

Lawmakers who voted for the bailout did so in the face of public outrage. In early October, a Rasmussen Reports poll found that 63 percent of voters nationwide thought the bailout would help Wall Street more than taxpayers.

Subsequent news of bonuses and other perks for executives spurred even more public displeasure.

"I have never seen anything like the opposition to this," Sen. Corker told local business leaders days after voting for the measure.

U.S. Rep. Zach Wamp, R-Tenn., who is running for governor, said he believes congressional incumbents will be more cautious when it comes to contributions from bailout recipients.

"This is a new paradigm," he said.


Tim Amos, senior vice president of legal and government relations for the Tennessee Bankers Association, said banks that took TARP money are being stigmatized unfairly. He said most of the banks that took the money did it to help reinvigorate the U.S. economy - and now are trying to give it back.

He also argued that the amounts bank PACs and employees give to lawmakers is just "a drop in the bucket."

"These guys are spending $2 (million) or $3 million on the race," he said.

Federal lawmakers who accepted contributions from individuals and organizations affiliated with banks that received bailout money have a conflict of interest, said Drew Johnson of the Tennessee Center for Policy Research. "It's sort of quid-pro-quo at work at its most base level," he said.

Rep. Wamp said that contributions often are given to Congress members based on their committee assignments. Sen. Corker is the only delegation member who serves on a banking committee.

Sen. Corker, however, was not running for re-election last year, unlike Sens. Chambliss and Lamar Alexander, R-Tenn.

Contributions almost certainly will be a campaign issue in the next election but may not result in much turnover in Congress, said Larry Sabato, director for the Center for Politics at the University of Virginia.

"Expect the opponents to draw a straight line between legislators, the money and the votes they cast on the bailouts," Dr. Sabato said. "However, the incumbents are fully capable of defending themselves, and they'll have more money ... to be able to overcome the charges."

PDF: Bank contributors


Campaign contributions in 2007-2008 from the American Bankers Association, PACs of banks that received TARP funds or individuals who listed TARP banks as their employers:


* Sen. Lamar Alexander: $29,050

* Sen. Bob Corker: $48,500

* Rep. Zach Wamp: $12,350

* Rep. Lincoln Davis: $26,250


* Sen. Saxby Chambliss: $113,198

* Sen. Johnny Isakson: $8,700

* Rep. Nathan Deal: $12,000

Source: Federal Election Commission

Donation details

Below is a breakdown of contributions to regional lawmakers from groups, individuals or associations affiliated with TARP recipients:


Sen. Lamar Alexander

* PACs: $15,750

* Individuals: $13,300

Sen. Bob Corker

* PACs: $37,250

* Individuals: $11,250

Rep. Zach Wamp

* American Bankers Association: $7,000

* PACs: $500

* Individuals: $4,850

Rep. Lincoln Davis

* American Bankers Association: $10,000

* PACs: $16,000

* Individuals: $250


Sen. Saxby Chambliss

* American Bankers Association: $14,000

* PACs: $89,598

* Individuals: $9,600

Sen. Johnny Isakson

* American Bankers Association: $1,000

* PACs: $4,000

* Individuals: $3,700

Rep. Nathan Deal

* American Bankers Association: $10,000

* PACs: $2,000

Source: Federal Election Commission

In 2007 and 2008, Rep. Wamp took $500 from SunTrust Bank's political action committee and nearly $5,000 from SunTrust executives, according to Federal Election Commission reports. SunTrust received $3.5 billion from TARP.

Rep. Wamp also took $7,000 from the American Bankers Association PAC, $3,000 of which came just after the House passed the TARP bill. The association's PAC takes contributions from bankers and bank-affiliated PACs, which it then contributes to campaigns.

Rep. Wamp voted for the bill but since has said he regrets that vote.

The Chattanooga congressman argued that some banks contribute because of their ties to the local community.

"What little bit of money I've received is from community banks that didn't do anything wrong," he said. "SunTrust is a long-standing Chattanooga bank."

Senators from Tennessee and Georgia each received contributions from the PACs of some of the biggest bailout recipients, such as Citigroup, American International Group, Bank of America and Wells Fargo & Co.

Bryan Kaegi, finance consultant for Sen. Alexander, who also voted for the measure, noted that none of the funding came directly from companies.

"No corporation has contributed to the campaign because to do so would violate federal laws," he said. "All of our campaign contributions are from individuals, or from individuals giving through political action committees, and are fully disclosed."

U.S. Rep. Lincoln Davis, D-Tenn., and U.S. Rep. Nathan Deal, R-Ga., voted against the TARP measure. Both have received funding from bank PACs and the American Bankers Association.

A spokesman for U.S. Rep. Davis said the congressman receives contributions from a lot of sources.

"No one will have any influence on this independent-thinking congressman except the folks he serves," said spokesman Tom Hayden.

Chris Riley, chief of staff for Rep. Deal, said the congressman has no problem with voting against his contributors.

Charles Bullock, a professor of political science at the University of Georgia, said those two arguments will provide insulation to Congress members who voted against the TARP. He said members who voted for the bailout will face stronger criticism.