By Chris Kromm --
Facing South
The Senate is expected to take a final vote on the health reform bill before
sending it back to the House for several minor fixes. Two Democratic U.S. senators are expected to vote "nay" on the reconciliation bill -- although their opposition will be only partially due to health reform.
Sens. Ben Nelson (NE) and Blanche Lincoln (AR) are also opposed to the bill due to a largely overshadowed, but just as important, measure that would dramatically reform the student loan industry.
As
Facing South reported, just two weeks ago six senators wrote to President Obama outlining their "concerns" over the loan reform proposal, which would stop private lenders from being allowed to originate student loans, which they make virtually risk-free thanks to federal subsidies.
By Wednesday, most of the Democratic senators had
shifted gears and signaled their support for reform, mostly to avoid the negative optics of being on the wrong side of health reform.
But Lincoln and Nelson appear to be holding out in defense of the largely for-profit student loan industry. Why?
Personal and political tiesThe answer is likely found in
a report released this week by Kevin Connor of the Institute for America's Future, which details a dense web of personal and political relationships between major private lenders and the two senators.
First the political: Lincoln and Nelson have been
two of the biggest beneficiaries of campaign contributions from the student loan industry:
Nelson, for one, is a top recipient of Nelnet [a large lender based in Nebraska] cash. The company's PAC has given him $19,000 over the years, and executives Jay and Mike Dunlap gave him $3,000 late last year. Sallie Mae's PAC maxed out to Senator Blanche Lincoln's primary account in 2009.
But it's also personal, thanks to a revolving door between Lincoln and Nelson's senate offices and the lobbying operations of the student lenders.
As part of a massive
$15 million lobbying push, Connor notes that the loan companies "made a number of key lobbying hires in order to open lines of communication" to target senators:
Among their hires: Kelly Bingel. Bingel is Senator Blanche Lincoln's former chief of staff and a longtime aide to the Senator. She is lobbying on behalf of an obscure group called the "Student Loan Coalition" and John Dean, a lobbyist for the Consumer Bankers Association. The CBA's membership includes Citigroup, Chase, Wells Fargo, and a number of other large student lenders.
A recent Roll Call article described Bingel as Lincoln's "alter ego." ... Lincoln is the godmother of Bingel's son [and] both members of the same sorority, Chi Omega.
Another connection: Lottie Shackelford, one of Lincoln's major donors, is a lobbyist for Sallie Mae, the biggest student lender in the country lobbyist. Shackelford, the former mayor of Little Rock and vice chair of the Democratic National Committee, has given Lincoln $3,750 over the past five years, including $2,000 in 2009. She first began lobbying for Sallie Mae in 2007.
Sen. Nelson has similar ties: Amy Tejral, his former legislative director,
is now a lobbyist for Nelnet, Nelson's largest campaign contributor and a lending company with a strong interest in maintaining the status quo.
Arvest Bank and the Walton EmpireSen. Lincoln has another close tie to the student loan industry back in her home state not mentioned in Connor's report:
Arvest Bank, based in Fayetteville, Ark and chaired by none other than
Jim C. Walton, youngest heir to the Wal-Mart fortune and ranked by Forbes as the
11th-richest person in the world.
According to
Arkansas state records [pdf], Arvest is by far the biggest student lender in Arkansas, responsible for $9.6 million in student loans last school year and $9.2 million in 2009-2010.
Arvest is also a big supporter of Sen. Blanche Lincoln. According to OpenSecrets.org, individuals and PACs connected to Arvest were
among the top 50 contributors to Lincoln's campaign committee in the 2010 election cycle, pitching $11,700 into her campaign coffers.
But the big gun here is Mr. Walton, whose political clout in Arkansas and nationally goes far beyond Arvest Bank. Wal-Mart has been the
third-biggest financial supporter of Lincoln's political career,
investing $75,500 in her since she took office in 1989.
Jim Walton doesn't give much money to Democrats -- only
1% of his donations since 1980 -- but he's made an exception for Sen. Lincoln,
personally donating $4,600 to her campaign in her last election run.
But that's obviously just a fraction of Walton's political influence. Over the last 12 years,
he's personally donated $51,550 to the Arvest and Wal-Mart PACs, significant chunks of which made their way back to Lincoln.
And with the Waltons, politicians are always aware there's plenty more where that came from -- especially after the Supreme Court expanded the ability of corporate players to influence elections.
Sensing the opportunity, Arkansas Lt. Governor Bill Halter -- who launched a surprise primary challenge to Lincoln this spring -- has
announced his full support of student loan reform measure.
INSTITUTE INDEX - Money, politics and student loan reform Estimated amount of money the federal government would save under student loan reform being considered by the Senate this week:
$61 billionProfits announced last year by Virginia-based Sallie Mae, the biggest private student lender in the country:
$324 millionAverage amount of debt that a college student graduating in 2008 faced upon graduation:
$23,200Amount that banking interests have spent in lobbying to oppose the reform bill:
$15 millionNumber of Democratic senators that have announced their opposition to the bill:
2Rank of Nelnet, a student loan company based in Nebraska, among campaign contributors to Sen. Bill Nelson (D-Neb.), who opposes the reform bill:
1Amount that Nelnet's PAC has given to Sen. Nelson over his career:
$19,000Amount that Sallie Mae's PAC gave to Sen. Blanche Lincoln, who also opposes the bill, in December 2009:
$4,000Year that Amy Tejral, Sen. Nelson's former legislative director, joined Avenue Solutions, a firm that lobbies on behalf of Nelnet:
2007Year that Kelly Bingal, Sen. Lincoln's former chief of staff, joined Mehlman Vogel, a firm that lobbies on behalf of the student loan industry:
2005Amount of money that Lottie Shackelford, a lobbyist for Sallie Mae and vice chair of the Democratic National Committee, has given to Sen. Lincoln over the last five years:
$3,750