by Nick Tomboulides
Members of Congress who took seats on powerful banking and finance committees received special low-interest loans, according to a new study by two London Business School professors.
The study, which looked at congressional behavior from 2004-2011, found that members who regulated Wall Street received bigger loans, lower interest rates and more time to pay back their debts — compared to colleagues who didn’t have power over the financial sector.
On average, members of finance committees were given 32 percent more time (or 4.5 years on average) to pay back debts than the average legislator. One cannot imagine how these sweetheart terms stack up next to those of an American who doesn’t have the privilege of serving in Congress.
According to the researchers, these “results indicate that, through their personal liabilities, finance committee members may use their oversight and legislative power to potentially extract benefits from financial institutions.”
Smaller, under-performing banks — who are most likely to find themselves at the mercy of regulators — were discovered to have offered the best deals to Congress.
This report underscores the fact that members of Congress are exploiting their tenure to find financial opportunities rather than serve the public. Members know that seats on committees are distributed on a seniority basis. That’s why they build power through constant re-election and keep that power by servicing powerful interests. The needs of everyday Americans are lost in this equation.
Plus, finance and banking only represent a small sliver of the 200-plus committees and subcommittees on Capitol Hill. Members who oversee important subjects like energy, agriculture, health care and transportation can exercise similar power over those sectors.
Congressmen and congresswomen are considered special people in need of special favors because of their seniority and clout.
A strong amendment for term limits on Congress will address the relationship between seniority and corruption. By eliminating the idea of career politicians, term limits restore the citizen government our founders intended.
H/T International Business Times
Nick Tomboulides is Executive Director of U.S. Term Limits