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Ahead of McCutcheon, Big Money Dominates

J. Mijin Cha

As we wait for the Supreme Court to rule on McCutcheon v. FEC, which would strike down aggregate campaign contribution limits, a series of stories have come out highlighting how much damage money is doing to our democracy and our economy. In short: a lot.

A ProPublica investigation found that nonprofits funded by dark money dominated redistricting plans across the country. Looking at documents uncovered in a lawsuit in North Carolina, the investigation found that Republican operatives, funded by dark money groups, drew the lines that packed as many Democrats as possible into three congressional districts. North Carolina’s delegation flipped from 7-6 Democratic to 9-4 in favor of Republicans. The same process of party operatives, cash, and secrecy also took place in Wisconsin, Ohio and Michigan. The role that dark money funneled through “non-profits” played is redistricting is extensive and the entire investigation is worth a read.

Adding to this, an article today in the Nation shows the incredible influence and access one of Wall Street’s most powerful trade groups, the Securities Industry and Financial Markets Association (SIFMA) had in the aftermath of the foreclosure crisis. SIFMA fought aggressively against a small study in Brockton, MA that looked at how to use eminent domain to help struggling homeowners, even though the plan would impact 2,300 households at most. Documents revealed through a FOIA request show that SIFMA sent its notes and observations to a key staffer at the Federal Housing Finance Agency, which was charged with helping homeowners in the aftermath of the housing crisis. Emails from SIFMA urged FHFA to reject the eminent domain plan and FHFA subsequently threated to take legal action against localities that used eminent domain to restructure mortgages. It also threated that Fannie Mae and Freddie Mac, which the agency oversees, would be ordered to stop doing business altogether in areas that pursued eminent domain plans.

The SIFMA case is particularly rich. Wall Street lobbied heavily to relax regulations that would have stopped the foreclosure crisis. It then lobbied heavily to weaken protections put in place after the crisis and now it is lobbying to stop aid to homeowners who are in foreclosure largely due to Wall Street’s excesses. In other words, don’t stop us from making money off of people who can’t afford it, don’t stop us from doing it again, and don’t help people who we’ve hurt.

Yet, because Congress largely listens largely to the affluent and corporate interests, the weakened consumer protections in place may not stop another financial crisis. If the definition of insanity is doing the same thing over and over again and expecting a different result, Wall Street and Congress qualify.