How Wall Street Bought Barney Frank
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Maybe the Weiss family’s contributions had something to do with Frank’s lukewarm support for more substantial reforms. Or Baker’s, or Vincent’s, or the MFA’s. Or those of any one of the deep-pocketed Wall Street supporters that Frank has cultivated since rising to a leadership post on the financial services committee.
For years, Frank was a mediocre fundraiser. In 2002, he was ranked 185th out of 215 Democrats in the House in total fundraising take. Previous years were similarly unimpressive.
That all changed in late 2002, when he became the most important Democrat on the financial services committee, replacing Rep. John LaFalce. In the following election cycle, Frank increased his fundraising five-fold, from $268,000 to $1.4 million. He cruised to re-election, though Democrats failed to take back the House that year.
Due to his leadership of the finance committee, Frank derived the greatest share of his cash, and his newfound power, from Wall Street. He consistently raised more than 50 percent of his campaign contributions from the finance, insurance, and real estate industry, often referred to as “FIRE” -- essentially the bundle of interests that had the most to gain from the housing bubble. By contrast, before becoming ranking Democrat, the FIRE share of his money hovered around 25 percent.
Remarkably, only two members of the House have taken in a larger share of their money from Wall Street over the past two campaign cycles -- Paul Kanjorski, a Democrat, and Spencer Bachus, a Republican. And during the 2006 cycle, Frank took in more money from FIRE than any other Democratic member of the House, and all but a few Republicans.
In 2009, Frank has taken in 48 percent of his contributions from FIRE, more than $400,000. Only one Democrat, Jim Himes, has raised more from Wall Street. Melissa Bean, that darling of Wall Street, actually trails Frank by several thousand dollars.
To put Frank’s funding mix in perspective, for every 20 Wall Street donors calling his office, there are two union presidents, one healthcare executive, and a handful of activists and business executives in other industries. (Check out this awe-inspiring graph, to grasp this more fully.)
With all that big money behind him, it's no wonder Frank has gone virtually unchallenged in his recent electoral campaigns. And he has used his Wall Street war chest to fund other Democrats across the country, building his influence and power within the party. It is that power, both symptom and cause of his chairmanship of Financial Services, that made him the Democratic Party’s point man on the financial crisis in fall 2008.
For clues as to how Frank got there, we can look to Representative John LaFalce, Frank’s predecessor as the ranking Democrat on the House Financial Services Committee, who was similarly dependent on FIRE.
GLB, as it is known, tore down the walls between commercial and investment banks set up by the Depression-era Glass Steagall Act, paving the way for the creation of too-big-to-fail behemoths like Citigroup. Democrats were in the minority at the time, so LaFalce wasn’t chair of the House Financial Services Committee, but he was credited with making sure the financial modernization bill was of high priority to the Clinton administration.
Soon after the legislation passed, LaFalce and other key policymakers reveled in their victory by gorging themselves on a cake bearing the epitaph of Glass Steagall. And then there was LaFalce’s retirement party, in 2002, where two lobbyists representing Bank of America, Morgan Stanley, and other financial interests sang a humorous tribute named “Big John.” LaFalce hailed from western New York, a region hit hard by financialization and de-industrialization, and far from the area he truly represented: Wall Street.