In a market that's down 40%, where do you go to get bang for your investment buck? According to a study by the Center for Responsive Politics, the smart money was paying lobbyists to get a share of TARP funds. The 300 companies on Hank Paulsen's corporate welfare program may not know how to run a business profitably, but they know a rigged game when they see one.
The TARP recipients invested an aggregate amount of $114 million, with $77 million going direct to lobbyists and $37 million going to campaign funds of Washington pols. That investment resulted in a return of $305.2 billion, for a tidy annual return of just a little better than 267,000%.
And you and I can take pride, WE provided that incredible return for the politically well-connected. Be honest. Doesn't it make you feel great?
Recipients of the $700 billion federal bailout package in the finance and auto sectors may view their contributions and lobbying as the smartest investments made in years, according to the Center for Responsive Politics.
More than half of the 300 companies helped by the federal government’s Troubled Asset Relief Program (TARP) have dished out $114.2 million for politicking, with $77 million spent on lobbying last year and $37 million spent on federal campaign contributions for the 2008 election.
Those political activities have, in part, yielded the companies $305.2 billion from TARP, or a massive return of 267,208 percent.
“Even in the best economic times, you won’t find an investment with a greater payoff than what these companies have been getting,” said Sheila Krumholz, the center’s executive director, in a statement.
McLean-based Capital One Financial Corp., which got the fourteenth-highest bailout share of $3.6 billion and the most out of all local recipients, spent about $700,000 on campaign contributions and $1.1 million on lobbying.
The top three bailout recipients also spent big on campaigns and lobbying, according to the D.C.-based nonprofit.
Bank of America, combined with Merrill Lynch, spent $14.5 million and got $45 billion from the bailout. General Motors spent $15 million and got $10.4 billion, and American International Group spent $10.6 million and was paid out $40 billion.
Of all companies that have been helped by TARP, 25 paid lobbyists $76.7 million to represent them on Capitol Hill last year.
They spent the most during the third quarter of last year, dishing out $20.4 million on lobbying.
“Taxpayers hope their money is being allocated entirely on the merits, but with Congress controlling how much money the Treasury gets to hand out, it will be impossible to completely exclude politics from this process,” said Krumholz, in a statement.
Some of the top recipients of contributions from TARP beneficiaries are members of Congress who chair committees that regulate the financial sector and oversee how well the bailout program works.
In total, members of the Senate Committee on Banking, Housing and Urban Affairs, Senate Finance Committee and House Financial Services Committee received $5.2 million from TARP recipients in the 2007 to 2008 election cycle. President Obama collected at least $4.3 million from employees at those companies for his campaign, said the center.
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