calgov2002:
 calgov2002: for old calgov2002 articles. calgov2002: for new calgov2002 articles. Other Bump Lists at: Free Republic Bump List Register |
Posted on 08/13/2002 5:42:05 PM PDT by RCW2001
LOUISE CHU, Associated Press Writer
Tuesday, August 13, 2002
©2002 Associated Press
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2002/08/13/state2009EDT0176.DTL
(08-13) 17:38 PDT SACRAMENTO (AP) --
Financial services giant Citigroup Inc., its fortunes hit by a variety of setbacks in the last year, is fighting on several fronts in California to influence key legislators and Gov. Gray Davis.
Since January 2001, the company has donated at least $200,000 to Davis, including $75,000 in May, when the company threw a fund-raising luncheon for Davis, state campaign finance records show. The Democratic governor and the nation's largest financial services company have had a long relationship, and Davis' brother-in-law George Ross is the company's chief credit officer and a longtime associate of Citigroup CEO Sanford Weill.
Citigroup's May donations came just before its Citibank subsidiary sued the state over a law that would require credit card companies to warn customers on their monthly statements how long it would take to pay off balances by just paying the minimum monthly payment.
The lawsuit is one of the many recent Citigroup moves, as it tries to maintain its market share, prop up its faltering stock price and fight back consumer organizations seeking to limit the sale of personal financial information.
"What do they want for that big investment?" asked Robert Stern, president of the Center for Governmental Studies, a Los Angeles-based think tank studying campaign finance and elections. "My assumption is that the return will be enormous, if they get what they want."
Citigroup officials did not return repeated calls by The Associated Press for comment, and its chief Sacramento lobbyist, Lynnea Olsen, declined to comment.
Long considered one of the nation's most successful companies, Citigroup has been rocked by huge loan losses in Latin America, accusations that its investment bankers helped hide Enron's debt from the public and a federal investigation into whether it offered special access to shares of new stock offerings to executives at now-bankrupt WorldCom. As a result, its stock is down 39 percent this year.
These troubles, analysts said, help account for Citigroup's intense interest in California legislation, particularly the financial privacy bill pushed by Sen. Jackie Speier, D-Hillsborough.
Speier's bill would require financial institutions to get customer permission before selling their personal information, such as bank balances and unlisted phone numbers, to outside companies. It's "one of the most highly contested pieces of legislation in the past couple years," said Shelley Curran, a policy analyst for Consumers Union.
Citigroup leads the fight against the bill because "they're one of the most aggressive sellers and sharers of personal financial information," said Robert Herrell, a spokesman for Speier. Citigroup has "affiliations with telemarketing companies that skirt, if not violate, the law on several occasions."
Speier has already changed parts of her bill at the request of Davis, who has said he wants to sign a strong privacy bill. Two previous attempts have failed in recent years, including one by Davis that Citigroup also opposed.
Citigroup is also part of a coalition of financial institutions that has sued the state of California to kill a new credit card "warning" law that requires companies to send warnings only to customers who made the minimum payment six months in a row.
Lobbying records filed with the secretary of state's office show that Citigroup lobbied the governor's office and the Legislature extensively while the bill was written. The San Francisco Chronicle also reported in June that the company worked closely with Davis on the law, with sections of the final version lifted verbatim from Citibank's proposal.
The lawsuit baffled the law's supporters, who said the companies helped write large chunks of it. But the companies have said that didn't mean they agreed with it.
Citigroup has also actively opposed a couple bills that would ban contracts for the purchase of consumer goods or services made over the phone, mail or e-mail if the customer did not provide at least part of the account number to be charged.
In all, Citigroup has spent almost $300,000 on lobbying since January 2001, state records show.
Citigroup's watchful eye on California politics is part of a larger trend of many out-of-state companies, who see the nation's most populous state as a policy trendsetter.
"If California goes, it's reasonable to think the other states will follow suit," Curran said.
Davis has repeatedly denied any connections between his campaign contributions and his actions as governor.
"The governor does not make decisions on official policy matters based on who gives the most money," said Garry South, Davis' senior policy adviser. "You have to look at the cases where major donors are ticked off at the governor on a regular basis because he's not doing what they want him to do."
But while Stern credits Davis' ability to resist such influence, he said the timing and nature of the contributions do put the governor in compromising situations.
"It can't not affect him," Stern said. "Otherwise, people would not be giving."
Read the bills, AB865, SB775, AB2775 and AB2578, at www.leginfo.ca.gov.
"It can't not affect him," Stern said. "Otherwise, people would not be giving."
That sums it up quite eloquently. All of these donations in close proximity to significant decisions/actions by the governor make it quite clear that the donors aren't just civic-minded Good Government types. These are rather naked bribes.
calgov2002:
|
calgov2002: for old calgov2002 articles. calgov2002: for new calgov2002 articles. Other Bump Lists at: Free Republic Bump List Register |
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.