Copyright 1999 Times Mirror Company
Los Angeles
Times
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November 16, 1999, Tuesday, Home Edition
SECTION: Metro; Part B; Page 9; Op Ed Desk
LENGTH: 814 words
HEADLINE:
PRIVACY ISSUE BUBBLES BENEATH THE PHOTO OP;
BANKS: NEW LAW SIGNED BY
PRESIDENT CLINTON FAILS TO PROTECT CONSUMERS FROM PRYING EYES.
BYLINE: ROBERT SCHEER, Robert Scheer is a Times
contributing editor
BODY:
You can't be a
successful lawyer and not work for banks, Hillary Clinton once said in defense
of her shenanigans as a Little Rock lawyer on behalf of the Madison Savings and
Loan. Or a senator from New York, or a president of the United States, her
husband might have added.
Last Friday, the White House photo op offered
a broadly smiling President Clinton surrounded by Fed Chairman Alan Greenspan
and other financial movers and shakers as Clinton signed the Financial Services
Modernization Act into law. With that flourish of his pen, Clinton gave the fat
cats of Wall Street everything they've long wanted, sweeping away consumer
safeguards enacted at the time of the Great Depression, suddenly making it legal
for banks, insurance companies and stockbrokers to affiliate as one company.
Clinton also granted these new conglomerates the power to collectively exploit
the information their varied affiliates have collected on their
customers--health records, stock transactions and credit histories, for
example--shredding the basic American right to privacy.
"The White House
really pulled the rug out from under consumers by agreeing to weak privacy
provisions in the banking bill," said Rep. Edward J. Markey (D-Mass.). He, along
with conservative Sen. Richard Shelby (R-Ala.), unsuccessfully tried to amend
the financial bill by requiring consumer approval before private information was
bandied about.
Clinton uttered some vague promises about backing
stronger privacy protection in the future, but the broad smile on his face as he
signed this giveaway to Wall Street made his priorities all too clear. The
financial interests that dumped more than $ 300 million into the passage of this
bill--the most expensive lobbying effort in history--are essential to Hillary
Clinton's U.S. Senate campaign. No one gets elected from New York who doesn't
play ball with Wall Street interests. That is why New York Democratic Sen.
Charles E. Schumer, a big Hillary backer, so strenuously lobbied Clinton to sign
this law.
Also, the president has got to repay the loyalty of Robert
Rubin, his former Treasury secretary, who stood by Clinton during his time of
personal troubles. Rubin has become co-chairman of Citigroup, a conglomeration
between Citibank and Travelers Insurance that immediately benefits from this new
legislation, which was strongly backed by Rubin and his Treasury Department and
for which he lobbied in the months following his resignation.
Without
this law, Citigroup would have had to divest some of its lucrative insurance
business. Surely there needs to be an investigation as to whether Rubin violated
federal conflict-of-interest rules by urging White House support for this bill
while in negotiation for his new job. But one will not hear a call for such
investigation from Republican or Democratic leaders in Congress, who have been
major recipients of Wall Street funding in return for supporting this bill. Nor
from the leading presidential candidates of either party, who feed at the same
trough.
In signing this law, Clinton offered a pretense of concern for
consumer privacy and promised his Treasury Department would come up with a new
package of consumer protection to right this wrong. What rubbish! By signing the
bill, this lame duck president gave away whatever leverage he had over the
banking interests and their power block in Congress.
As Markey put it:
"This was the perfect opportunity to protect the little guy, the average
consumer, because the big boys in the financial services industry wanted the
banking bill so badly. Now we have to start all over again, and it's not going
to be easy. But we can't stop fighting until every American has the privacy
protections they deserve."
The fight for privacy now hangs on passage of
HR3320, the "Consumers' Right to Financial Privacy Act" sponsored in the House
by Markey and Joe Barton, a conservative Texas Republican. Shelby and Richard
Bryan (D-Nev.) introduced an identical bill, S1903, in the Senate. This
legislation asserts this very clear principle: "Financial institutions would
have to notify consumers before sharing their personal information, provide the
consumer access to that information to confirm its validity, and most
importantly, would have to gain express consent from the consumer before any
personal information could be shared." Failure to comply would carry civil and
criminal penalties.
This same privacy legislation also can be passed by
the states and, thanks to a loophole in the Financial Services Modernization
Act, would supersede the federal law. If that happens, the victory that the
banks are now gloating over may prove to be somewhat pyrrhic. A candidate's
support for this privacy legislation should be a voters litmus test to determine
whether those who presume to represent them value consumer privacy over bank
profits.
LOAD-DATE: November 16, 1999
