Only days after Sen. Dick Durbin (D-Ill.), in a moment of candor, admitted that banks "own this place" -- referring to his own hallowed Senate -- the upper chamber of Congress drove the point home by defeating a bill allowing modification of troubled mortgages.
The Center for Responsible Lending quickly decried the move, noting the bill would have helped 1.7 million homeowners facing foreclosure and helped neighborhoods preserve some $300 billion in property value:
"The mortgage crisis continues to worsen, and the need for this legislation will only grow," said Mike Calhoun, president of the Center for Responsible Lending. "Unfortunately, millions of homeowners and all Americans waiting for economic recovery will pay dearly for this delay."Critical to the bill's defeat was the vote of 12 centrist Democrats against the measure (if one includes newly-converted Arlen Specter):
SEN. DEMOCRATS VOTING AGAINST 2009 MORTGAGE BILL
* Max Baucus (MT)
* Michael Bennett (CO)
* Robert Byrd (WV)
* Thomas Carper (DE)
* Byron Dorgan (ND)
* Tim Johnson (SD)
* Mary Landrieu (LA)
* Blanche Lincoln (AR)
* Ben Nelson (NE)
* Mark Pryor (AR)
* Arlen Specter (PA)
* Jon Tester (MT)
Note that only four are from the South. The Plains states were a stronger force with six. Sen. Carper from banking heaven Delaware and new Democratic convert Sen. Specter round out the list.
Even more interesting, at least half of them aren't major beneficiaries of campaign money from financial institutions. Only Sens. Baucus, Johnson and Pryor took more than $100,000 in contributions linked to commercial banks in 2008, according to the Center for Responsive Politics. (Lincoln comes close with $99k+.)
Half the Democratic senators voting against the bill received less than $25,000 in bank-related contributions in 2008. Sens. Bennett and Byrd had no contributions linked to the industry last election cycle.
So if it wasn't for payback of past campaign gifts -- at least in some cases -- what was it?
Four of the Democratic senators face re-election battles in 2010 (Bennet, Dorgan, Lincoln, Specter), and while mortgage relief might be popular with many voters it could certainly stimulate the wrath of the finance lobby.
Which brings us back to Durbin's comment. Even when they're not directly dispensing campaign cash, the banking and finance lobby appears able to throw fear into the hearts of lawmakers.
Amidst record losses, banks injected nearly $28 million into campaigns in 2008. Their armada of lobbyists have only grown in the TARP era. Bankruptcies and scandals have not diminished their political clout.
The driving principle appears to be fear -- about what the finance lobby can and might do. Apparently, there is more than one way for banks to "own" the Senate.