WASHINGTON Municipal bond broker-dealer groups have spent nearly $5 million trying to influence federal lawmakers in recent months, using in-house lobbyists as well as outside firms and campaign contributions to promote their positions on securities laws, tax reform, and regulation.
The Securities Industry and Financial Markets Association has spent nearly $4.2 million on its Capitol Hill lobbying efforts during the first two quarters of 2014, according to lobbying disclosure documents which groups are required to submit to the Clerk of the House and the Secretary of the Senate. The group routinely spends more than $5 million on its lobbying efforts every year, but is on pace to spend more this year than in any since 2006 when it spent more than $10 million.
SIFMA has a large in-house lobbying shop. Its disclosure documents show 20 separate individuals were working to advance the organization's interests during the first two quarters. The law requires individuals to register as lobbyists if they lobby more than one executive branch official, lawmaker, or congressional staff contact and spend at least 20 percent of their time on those activities. Its in-house lobbyists, which include SIFMA president and chief executive officer Kenneth Bentsen and Michael Decker, a managing director and co-head of municipal securities for the group, accounted for the vast majority of SIFMA's lobbying expenses in the first half of the year.
The disclosure documents show SIFMA's in-house lobbyists worked on Dodd-Frank Act implementation, which included the final effectiveness of the Securities and Exchange Commission's municipal advisor registration rule July 1. They also lobbied on accounting standards for municipalities, bankruptcy reform for local governments, tax-exemption for municipal bonds, tax reform legislation, and bills that would have revived Build America Bonds and taxed internet retail sales.
In addition to the nearly $4 million it spent on its own lobbying efforts, SIFMA also hired the firm of Cleary Gottlieb Steen & Hamilton for $210,000 over the first and second quarters, documents show. Several members of that firm lobbied on behalf of SIFMA on tax reform and swap regulation. SIFMA's political action committee gave about $466,000 to federal candidates and $120,000 to national parties during the 2014 election cycle, plus another $31,000 to campaign committees. SIFMA's PAC donates about 64% of its expenditures to Republicans and 36% to Democrats, according to the non-partisan Center for Responsive Politics. Among the recipients is Rep. Steve Stivers, R-Ohio, who got $10,000 during the 2014 election cycle.
PACs can contribute up to $5,000 per election to federal candidates, but since the primary election and general election count separately under federal rules, a PAC can actually give $10,000 to a candidate. If a candidate has to run in a special election, they can get another $5,000 on top of that in the same election cycle.
Stivers, a member of the House Financial Services Committee and former banker, has previously sponsored legislation that would have curtailed municipal advisor regulation. Stivers also gave a speech in July critical of the SEC's Municipalities Continuing Disclosure Cooperation initiative. From the floor of the House, Stivers pushed for the SEC to limit the scope of its disclosure violations self-reporting program to the last two years or risk possible legislative action forcing their hand. He threatened to sponsor legislation if they SEC did not act. The SEC subsequently modified the MCDC by extending the reporting deadline for issuers and moving to tiered capped penalties based on size for underwriters who participate in the program.
Other top SIFMA recipients in the Republican-controlled House included Speaker John Boehner, R-Ohio, House Financial Services Committee chair Jeb Hensarling, R-Tex., and Rep. Tom Price, R-Ga. Boehner and Price each got $10,000, records show, while Hensarling got $15,000.
The group was less active in the Senate, where Democrats hold sway. The top recipient was Senate Banking Committee member Mark Warner, D-Va., who received $7,500. John Cornyn, R-Tex., who sits on the Senate Finance Committee, got $7,000.
Sarah Bryner, research director at the Center for Responsive Politics, said that the most active lobbies have spent far more than SIFMA. The U.S. Chamber of Commerce, for example, has already exceeded the $50 million mark. But Open Secrets, the lobbying and campaign contribution disclosure website run by the Center for Responsive Politics, classifies SIFMA as a "heavy hitter." Bryner said that the year-to-year variations in a group's spending on lobbying is not simple to explain, but that general influence spending is driven by what is happening on Capitol Hill.
"The general lobbying market is driven by the bills under consideration in Congress," Bryner said, adding that consideration of measures like Dodd-Frank and the Affordable Healthcare Act triggered a flurry of lobbying activity.
The Bond Dealers of America has spent considerably less on lobbying: $230,000 on lobbying through outside firms. The group paid Ellen Marshall of Marshall & Company $30,000 through the first two quarters of the year, and Roberts, Raheb & Gradler $100,000. One of the principals of that firm is Rick Roberts, a former chief of staff for Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee. He also was an SEC Commissioner from 1990 to 1995.
Another firm, Urban Swirski & Associates, also got $100,000 through the first two quarters to represent BDA's interests on the Hill. Anne Urban and Sandra Swirski are tax experts and former staffers to lawmakers while William Coughlin was a former staff to Rep. Emanuel Cleaver, D-Mo, a member of the House Financial Services Committee.
The totals for both groups do not include individual contributions or expenditures by their member firms or employees of those firms.
BDA did not respond to requests for comment. SIFMA declined to comment.
Kyle Glazier covers the securites beat and economic indicators for The Bond Buyer in Washington, D.C.
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