Citigroup hires lobbyist who helped cause the S&L crisis
Oct 12th 2009 9:30AM
Updated Dec 4th 2009 4:43PM
Financial crises are very lucrative for the Republican party. One way to judge that is to measure the success of lobbyist Richard Hohlt, who has given hundreds of thousands of dollars to Republican candidates since pushing through savings & loan deregulation, which led to the last great banking bailout overseen by a Bush. Now that same lobbyist is advising Citigroup (C), which is holding $306 billion in government cash ($45 billion in preferred stock) plus loan guarantees (up to $261 billion), according to The New York Times.
There is no question in my mind that Citigroup Chairman Dick Parsons ought to consider the wisdom of his decision to hire Hohlt. The lobbyist has a track record that would bring joy to the heart of anyone who loves record bailouts of financial institutions that go off the rails due to deregulation. And Hohlt even played a part in outing former CIA agent Valerie Wilson, whose husband had the nerve to contradict Bush administration claims about Iraqi access to nuclear material.
The New York Times reports that Hohlt played a key role in pushing Reagan-era deregulation in the form of a 1982 bill -- The Garn-St. Germain Act -- which freed S&Ls to make risky loans, eliminate deposit caps, and hold less capital. President Reagan's successor, George H.W. Bush, had the pleasure of overseeing what was then the biggest bailout in U.S. history -- the $293.3 billion S&L bailout that followed the S&L deregulation, according to Pro Publica.
Hohlt has done so much more, though. The Times reports that in the 2008 election, he gave $108,700 in campaign contributions, almost exclusively to Republicans, and in 2004 he was a "Super Ranger" who helped raise at least $200,000 for George W. Bush's reelection -- the fellow whose Treasury secretary gave Citigroup that $306 billion.
For Hohlt and Parsons, none of these are big problems. Hohlt tells The Times that he's learned from his mistakes; Parsons says that Hohlt helps him learn what's going on in Washington. It all sounds perfectly innocent to me -- unless you are one of those people who thinks that a government should represent its citizens.
We have the best government money can buy. And Hohlt has helped to channel the money from those doing the buying to those doing the governing. As long as that keeps happening, we're not going to see any financial reform.