The Lobbyists: Industry to Direct Gifts To Legislative 'Friends'

Stung by recent legislative losses on financial reform and credit union growth, the banking industry is threatening to withhold campaign contributions from incumbents who voted against its interests.

"We are very unhappy with the way we were treated, particularly by the Republican leadership in the House," said James F. Beall, chairman of BankPac, the American Bankers Association's political action committee. "We just need to sit down and figure out who our friends are."

Mr. Beall, who is also chairman and president of Farmers and Merchants Bank, Centre, Ala., said the ABA slowed down its pace of gifts this year after more House members signed on to support legislation easing credit union membership limits.

BankPac gave nearly $700,000 to congressional campaigns from January 1997 through this April.

Marty Farmer, a senior lobbyist for the Independent Bankers Association of America, agreed the industry must send a strong signal to Speaker Newt Gingrich and other House Republicans, who led the fight to pass the credit union and financial services reform bills.

"Otherwise they will keep voting against you and smile at you," he said.

Though Edward L. Yingling, the ABA's chief lobbyist, would not name lawmakers targeted for retribution, possible targets include three House Banking Committee members: Reps. Richard H. Baker, R-La., Robert W. Ney, R- Ohio, and David J. Weldon, R-Fla.

"Some people who have relied on support in the past won't be seeing it this go-round," Mr. Yingling said. "The industry would look to see if there are close races involving somebody who was very negative on our issues."

As part of the soul-searching intended to prepare the way for reestablishing the industry's lobbying influence, some banking trade groups are calling for banking leaders to meet this fall to plot a unified legislative strategy.

"It is clear banking has not done that well in the last two Congresses," said Kenneth A. Guenther, IBAA's executive vice president.

"It is time for the banking industry to sit down and come up with an agenda for the next Congress."

Mr. Guenther said he and Richard M. Kovacevich, chairman and chief executive of Norwest Corp. as well as president of the Bankers Roundtable, have discussed organizing a summit. The ABA also supports the idea, Mr. Yingling said.

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