New lobbying rules released today by the Treasury Department may do little more than highlight the mess left over from the early rounds of capital infusions into banks. Following a week of chatter in the media over possible political motivations behind the Treasury´s selection of banks to recapitalize, the agency vowed to adhere to a stricter regimen of transparency in its decisionmaking and to limit banks´ ability to use lobbyists to argue their cases for Tarp funds.
But the move looks like it´s little more than stagecraft. The Treasury vowed to "implement safeguards to prevent lobbyist influence" over the bailout effort, "including restricting contacts with lobbyists in connection with applications for or disbursements of EESA funds." The agency also said political influence wouldn´t affect recapitalization decisions, and that the Treasury´s Office of Financial Stability would "publish a detailed description of the investment review process" leading up to the decision to grant funds.
This could be a response to what happened last week after several news outlets reported that an undercapitalized bank, the Boston-based OneUnited, was a pet recapitalization project of Rep. Barney Frank, D-Mass., one of the main architects of the bailout bill. The concern goes back even farther, however. Recent rounds of funding for Citigroup and Bank of America have also come with more lobbying strings attached-with little effect.
The power lobbyists hold over lawmakers and government agencies is rooted deeply in the minds of the American public and its expanse is mythic. Lobbyists themselves would downplay it, but their effect is widely felt and will continue to influence policy decisions barring rules with some sharper teeth. Until then, however, perhaps Treasury should concentrate on its internal quest for transparency-an area in which there is room for vast improvement.