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[bob ford <bobford79 AT yahoo.com>]

>From today's NYT, a short take on those in line to whsisk away the bail-out 
>moneys which were once the assets of the taxpaying citizens.  With the 
>times, you will understand that they do not put as much balme as is proper 
>on investment bankers, hedge fund managers, and present polotical committee 
>chairman.  Those people fall within the groups of the Times' friends.  
>Still, this is enough to make a person wonder why they even 
>try................bobford


__________________________________________________________________________

Lobbyists Swarm the Treasury for Piece of Bailout Pie
 
By MARK LANDLER and DAVID D. KIRKPATRICK
Published: November 11, 2008 

WASHINGTON — When the government said it would spend $700 billion to rescue 
the nation’s financial industry, it seemed to be an ocean of money. But after 
one of the biggest lobbying free-for-alls in memory, it suddenly looks like a 
dwindling pool.




Daniel Rosenbaum for The New York Times

Edward Yingling, president of the American Bankers Association, is concerned 
that there won’t be enough money left to help community banks once the 
lobbyists get their cut. 
Many new supplicants are lining up for an infusion of capital as billions of 
dollars are channeled to other beneficiaries like the American International 
Group, and possibly soon American Express. 

Of the initial $350 billion that Congress freed up, out of the $700 billion 
in bailout money contained in the law that passed last month, the Treasury 
Department has committed all but $60 billion. The shrinking pie — and the 
growing uncertainty over who qualifies — has thrown Washington’s legal and 
lobbying establishment into a mad scramble.

The Treasury Department is under siege by an army of hired guns for banks, 
savings and loan associations and insurers — as well as for improbable 
candidates like a Hispanic business group representing plumbing and 
home-heating specialists. That last group wants the Treasury to hire its 
members as contractors to take care of houses that the government may end up 
owning through buying distressed mortgages.

The lobbying frenzy worries many traditional bankers — the original targets 
of the rescue program — who fear that it could blur, or even undermine, the 
government’s effort to stabilize the financial system after its worst crisis 
since the 1930s.

Among the most rattled are community bankers. 

“By the time they get to the community banks, there may not be enough money 
left,” said Edward L. Yingling, the president of the American Bankers 
Association. “The marketplace is looking at this so rapidly that those who 
have the money first may have some advantage.”

Adding to the frenzy is the possibility that the next Congress and White 
House could change the rules further. President-elect Barack Obama has added 
his voice by proposing that the struggling automakers get federal aid, which 
could mean giving them access to the fund — something the Treasury secretary, 
Henry M. Paulson Jr., has resisted.

Despite the line outside its door, the Treasury is not worried about running 
out of money, according to a senior official. It has no plans to ask 
lawmakers to free the second $350 billion of the rescue package during the 
special session of Congress that could begin next week.

That could limit the pot of money available, at least until the next Congress 
is sworn in next January. Meanwhile, the list of candidates for a piece of 
the bailout keeps growing.

On Monday, the Treasury announced it would inject an additional $40 billion 
into A.I.G., amid signs that the government’s original bailout plan was 
putting too much strain on the company. American Express won approval Monday 
to transform itself into a bank holding company, making the giant marketer of 
credit cards eligible for an infusion.

Then there is the National Marine Manufacturers Association, which is asking 
whether boat financing companies might be eligible for aid to ensure that 
dealers have access to credit to stock their showrooms with boats — costs 
have gone up as the credit markets have calcified. Using much the same 
rationale, the National Automobile Dealers Association is pleading that car 
dealers get consideration, too.

“Unfortunately, I don’t have a lot of good news for them individually,” said 
Jeb Mason, who as the Treasury’s liaison to the business community is the 
first port-of-call for lobbyists. “The government shouldn’t be in the 
business of picking winners and losers among industries.”

Mr. Mason, 32, a lanky Texan in black cowboy boots who once worked in the 
White House for Karl Rove, shook his head over the dozens of phone calls and 
e-mail messages he gets every week. “I was telling a friend, ‘this must have 
been how the Politburo felt,’ ” he said.

The Congressional bailout law gave the Treasury broad authority to decide how 
to spend the $700 billion. Under the terms of the $250 billion capital 
purchase program announced last month, cash infusions are available to 
“qualifying U.S. banks, savings associations, and certain bank and savings 
and loan holding companies, engaged only in financial activities.”

That definition has grown to include private banks and insurers like Allstate 
and MetLife, which own savings and loans. It may also encompass industrial 
lenders like GE Capital and GMAC, the financing arm of General Motors, 
provided they win approval to reclassify themselves as a bank or savings and 
loan holding company.

The Treasury set a deadline of Friday for institutions to apply for capital 
investments, which has meant a grueling few weeks for already overworked 
officials like Mr. Mason.

“Jeb is like the customer service agent at Verizon when the power lines go 
down,” said Robert S. Nichols, president of the Financial Services Forum, a 
trade group for big institutions like Citigroup, Fidelity and Allstate 
Insurance, some of which have received federal money.

The influential independent and community bankers group, which represents 
smaller institutions, won an extension of the deadline for privately held 
banks while the Treasury considers a way for them to participate in its 
program as well.


The Treasury, several industry executives said, wants to avoid too strict a 
definition of eligible institutions, in case the Obama administration decides 
it wants to tweak the requirements for an investment, or even overhaul the 
rescue program. 


 Credit Crisis — The Essentials

Several lobbyists said the Treasury’s model contract acknowledges the 
possibility that Congress could impose new requirements on recipients of the 
money, and some Democratic lawmakers have talked about further restricting 
executive compensation, shareholder dividends or other uses of the money as 
part of the deal. 

“We are like a tenant signing a lease contract with the landlord where the 
landlord can come back and change the terms after the fact, and in fact we 
are going to have a new landlord in a couple of weeks,” said Mr. Yingling of 
the bankers association.

The first wave of lobbying came in early October when Mr. Paulson announced 
the plan to buy troubled mortgage-related assets from banks. The Treasury 
said it would hire several outside firms to handle the purchases, and would 
dispense with federal contracting rules. 

Law and lobbying firms that specialize in government contracting fired off 
dispatches to clients and potential clients explaining opportunities in the 
new program. Capitalizing on the surge of interest, several large firms, 
including Patton Boggs; Akin Gump; P & L Gates; Fried, Frank, Harris, Shriver 
& Jacobson; and Alston & Bird, have set up financial rescue shops.

Alston & Bird, for example, highlights its two biggest stars — former Senator 
Bob Dole and former Senator Tom Daschle. Mr. Dole “knows Hank Paulson very 
well” and has been “very helpful” with the financial rescue groups, said 
David E. Brown, an Alston & Bird partner involved in its effort. 

“And of course, Senator Daschle is national co-chair of the Obama campaign,” 
Mr. Brown added, noting that because Mr. Daschle is not a registered 
lobbyist, his involvement is limited to “high level advisory and strategic 
advice.” 

Ambac Financial Group, in the relatively obscure bond insurance business, 
never needed lobbyists before, said Diana Adams, a managing director. But its 
clients persuaded the company to hire two Washington veterans — Edward Kutler 
and John T. O’Rourke — who helped arrange a recent meeting with Phillip L. 
Swagel, an assistant Treasury secretary. “We haven’t really asked for much in 
the past,” Ms. Adams said.

Initially, the banks reacted coolly to the prospect of the government taking 
direct stakes in them. They worried about restrictions on executive pay, and 
whether there would be a stigma attached. In conference calls with industry 
groups, Mr. Mason helped explain the Treasury proposal — a job he and his 
colleagues did well, judging by the change of heart among banks. 

“The biggest surprise was how quickly it went from ‘I don’t need this,’ to 
‘How do I get in?’ ” said Michele A. Davis, the head of public affairs at the 
Treasury, who is Mr. Mason’s boss.

Underscoring the many ways companies can take part in the rescue fund, the 
Hispanic Chamber of Commerce and other Hispanic business groups met with Mr. 
Paulson to push for minority contracts in asset management, legal, 
accounting, mortgage services and maintenance jobs, like plumbing and masonry.

“They are going to need a lot of folks in minority communities that are able 
to service their own communities,” said David Ferreira, head of government 
relations for the Hispanic Chamber of Commerce.

As the automakers have pushed for federal help, the trade groups for car 
dealerships and even boat dealerships are pressing their own cases. They 
argue that showrooms are feeling a squeeze between higher borrowing costs to 
finance their inventory and slowing consumer sales to move it out the door.

“We have been encouraged by reports that Secretary Paulson is looking to 
broaden the program,” said Mathew Dunn, head of government relations for the 
National Marine Manufacturers Association. 



On Friday, the automobile dealers sent Mr. Paulson a letter urging him to 
keep them in mind. 

“A well-capitalized, financially sound dealer network is essential to the 
success of every automobile manufacturer,” wrote Annette Sykora, a car dealer 
in Slaton, Tex., and the chairwoman of the National Automobile Dealers 
Association. “Any government intervention should include provisions to 
preserve the viability of dealers.”

>From today's NYT, a short take on those in line to whsisk away the bail-out 
>moneys which were once the assets of the taxpaying citizens.  With the 
>times, you will understand that they do not put as much balme as is proper 
>on investment bankers, hedge fund managers, and present polotical committee 
>chairman.  Those people fall within the groups of the Times' friends.  
>Still, this is enough to make a person wonder why they even 
>try................bobford


Some lobbyists, Mr. Mason said, had called him even though they did not have 
any clients looking to get into the program or worried about its 
restrictions. They were merely seeking intelligence on which industries would 
be deemed eligible for assistance. He suspects they were representing hedge 
funds that wanted to trade on that information.


http://www.nytimes.com/2008/11/12/business/economy/12lobbying.html?pagewanted=2