Financial Industry Spends $300 Million on Deregulation Lobbying and Campaign Contributions

In 1997 and 1998, the banking, insurance, and securities industries spend over $300 million to advance financial deregulation, including $58 million in direct campaign contributions to Democratic and Republican candidates, $87 million in soft money contributions to both parties, and $163 million on lobbying. This massive financial commitment buys bipartisan support for dismantling Depression-era financial regulations, particularly Glass-Steagall.

The spending represents a strategic investment in legislative capture. Financial firms trend heavily Republican during the 1996 and 1998 deregulation push, but Democrats increasingly rely on wealthy donors and finance sector contributions, creating partisan convergence on deregulation. Research shows that around 1980, Republicans and Democrats begin to agree on deregulation, with this consensus strengthening through the 1990s as Democratic dependence on Wall Street funding grows.

The $300 million campaign proves extraordinarily effective. Congressional Democrats vote with Republicans on key deregulatory bills throughout the late 1990s, culminating in the 1999 Gramm-Leach-Bliley Act repealing Glass-Steagall with overwhelming bipartisan support (90-8 in Senate, 362-57 in House). The expenditure demonstrates how systematic campaign contributions and lobbying can purchase legislative outcomes: for every dollar the financial industry invests in deregulation advocacy, it receives exponentially greater returns through reduced regulatory constraints and expanded profit opportunities. This legalized corruption transforms both parties into vehicles for financial industry interests, abandoning their traditional regulatory roles.