Monday, December 08, 2003
Ever since Jesus threw the moneylenders out of the temple, society has been plagued with the problem of usury -- when those with money lend it to those who are in desperation at rates that would embarrass any honest to goodness Wall Street Banker.
Take for instance the example of payday loans. These short term loans that working folks sometimes need to get them from paycheck to paycheck can carry interest charges of up to 391% according to this factsheet put out by the Federal Trade Commission.
Several states have tried to ban these practices, and federal regulators had wanted to clamp down too. Payday gouger Bill Webster was faced with the prospect of shutting down 216 loanshark operations in Pennsyvlania and North Carolina. But, Billy got the Chairman of the House Financial Services Committee, Mike Oxley, to weigh in and keep him in business.
Since Oxley was a friend, Billy Webster wanted to make sure he stayed in positions of power so that he could continue to help in out. On the very day when his payday loan operations were supposed to shut down, but didn't, Bill raised $42,000 for Mike Oxley's campaign committee.
The Toledo Blade runs a very detailed story here outlining the whole ugly affair. The reporter quotes some DC reformers who suggest that Oxley's view is being influence by the donations, as opposed to the donors simply giving to politicians they agree with. But this critique really misses the mark.
First off, it seems quite possible that Oxley really does agree with the payday lenders. After all, his other big accomplishments have included siding with oil and chemical companies to abolish fees they paid to clean up their hazardous waste sites.
But, even if Mike Oxley does agree with Bill Webster that he should be allowed to charge 391% interest for his payday loans and is totally following his best judgment as a legislator when working to strike down regulations that prevent this, there is still a huge problem with our democracy. Webster may not have bought Oxley's judgment, but rater he has bought a seat for his ally Oxley at the table.
According to Federal Election Commission records, Oxley raised $1,256,848 in his 2002 re-election campaign. His general election opponent Jim Clark raised just $10,551. Not surprisingly, Clark lost after being outspent by more than a hundred to one. So, the real question at hand is not whether Mike Oxley's judgment was swayed by his contributions from the payday loan industry, but whether or not Jim Clark would have done the same favor to the industry as Oxley did.
The question goes deeper than just whether Oxley would be in Congress or not, but for the big money he takes from loan sharks and polluters. In order to really help his fat cat friends, Oxley needs to be in a position of power. He needs to be a committee chair. This means he needs to raise money to give to other candidates, so that his party wins a majority of the seats and so the members of his party owe him a favor and will vote for him as committee chair. It's not just one seat in Congress that's for sale, its the whole enchilada.
Oxley freely admits as much, saying "I raise a lot and give away a lot. The last cycle I gave away as much as I spent on myself to keep the majority, to keep me as chairman, and to increase our majority."
And this is precisely the problem Mr. Oxley. Big money should not be the way that you keep your chairmanship, and the majority of the House of Representatives ought not be for sale.