Jeff Gelles: Big finance boosting its political gifts

As he touted his latest idea for home refinancing, aimed at helping up-to-date homeowners benefit from low interest rates even if the value of a home has fallen, President Obama showed off a simplified mortgage-disclosure form - one of the initial goals of the Consumer Financial Protection Bureau he championed.

"This is what a mortgage form should look like," Obama said, recalling the difficulty that he and his wife, Michelle, faced - even as newly trained lawyers - in parsing papers presented to them when they bought their first condo.

Simplifying mortgage-disclosure documents is part of the nuts-and-bolts of consumer protection. If that wasn't obvious before the housing bubble and financial crisis, it was painfully so afterward, when we learned how the mess was triggered in large part by exotic and confusing loans that weren't in anybody's interests - except that of lenders or loan brokers who sold them immediately and never had to worry about the micro- or macroeconomic risks of defaults.

In its first six months on the job, the CFPB has pursued similarly basic goals for those who borrow via credit cards or student loans. It has built a user-friendly website (www.consumerfinance.gov) to help educate consumers about financial products and their risks, and established a central place where borrowers can direct complaints if something goes wrong. It has helped thousands of consumers win relief - and helped thousands of others understand why a lender was sticking to its guns. It is working to help seniors, military families, payday-loan borrowers, and others at extra risk of confusion or scams.

So why did blocking the CFPB's start-up become a rallying cry for virtually every Republican in the U.S. Senate? Why did they choose to filibuster the nomination of Obama's choice to head the agency, former Ohio Attorney General Richard Cordray, and demand that the Dodd-Frank financial reforms be weakened before they took effect?

For that matter, why did some Democrats seem so cozy during the Dodd-Frank debates with a financial industry whose unwise risks almost triggered Great Depression 2.0?

It's impossible to say for sure what motivates anyone. But a new report on the growth of big money in politics suggests that something beyond a simple difference in ideology may be at play.

Yes, Republican policymakers are openly eager to double down on the deregulatory dogma of the last three decades. And yes, Obama and many Democrats - including some who said "amen" to deregulation through the 1990s - say they've seen the light, rejecting laissez-faire in favor of basic rules of the road. They deserve real credit for backing the CFPB.

But if you've ever wondered why the finance industry usually seems to get its way on more complicated or lower-profile decisions - such as when it fought the breakup of too-big-to-fail banks, or deep-sixed Obama's 2009 proposal to allow bankruptcy judges to write down the value of underwater homes the same way they write down the value of vacation homes and business investments - the Sunlight Foundation's report may prove eye-opening.

In the 20 years from 1990 to 2010, the number of donors able and willing to donate at least $10,000 in federal campaigns - what Sunlight calls "the political one percent of the one percent" - has grown dramatically. But the most remarkable growth in elite donors centers on a particular segment of the economy: donors connected to finance, insurance, and real estate, a sector that Sunlight labels by its acronym, FIRE.

In 1990, about 1,100 elite FIRE donors contributed about $15 million to federal candidates, parties, and political action groups. In 2010, another year when Congress but not the presidency was at stake, about 5,500 elite FIRE donors kicked in $178 million.

Those numbers far outpaced the contributions of other sectors known for their influence, including lawyers, communications and electronics, defense, and health.

In 2010, as Congress debated Dodd-Frank, 2,178 elite donors linked to securities and investment firms donated $84 million to federal campaigns - an average of more than $38,500 apiece.

In a report on Sunlight's findings, senior fellow Lee Drutman linked the growth to the "stratospheric levels of wealth" generated over the two decades by the financial sector, which he said now accounts for 8.4 percent of the domestic economy, compared with 6 percent in 1990. At one point several years ago, the finance sector claimed close to 40 percent of profits earned by all U.S. businesses.

Sunlight is also tracking the latest twist in the saga of money in politics: the rise of so-called super PACs in the post-Citizens United world. These supposedly independent groups, which can now receive unlimited donations from people or corporations, have drawn multimillion-dollar donations into the current election cycle from a handful of billionaire businesspeople. And big money can even arrive anonymously, if a donor steers funds through a nonprofit such as Karl Rove's creation, American Crossroads GPS.

Credit Rove for his sense of irony. The "GPS" may sound like some "let's find our way" metaphor, but it actually stands for "Grassroots Policy Strategies" - as if secret donations from wealthy donors is equivalent to support from everyday people.

What do large donors get, beyond the satisfaction of helping their candidates to victory? The obvious answer is access. When issues arise that matter to such large donors, you can bet that the recipients of largesse will listen.

That's why we get the government we do. If you want government to look out for your interests alongside those of elite donors, the only solution is to pay close attention. And to vote.