BOSTON — Though she hasn’t yet been sworn in, Sen.-elect Elizabeth Warren is already the subject of a political battle in Washington, D.C. The controversy is over whether Warren should get a seat on the Senate Banking Committee.
Warren ran as a reformer who would hold large financial institutions accountable. Those institutions paid attention. This summer, Rob Engstrom, senior vice president of the U.S. Chamber of Commerce, traveled to Boston to endorse U.S. Sen. Scott Brown over Warren.
“No other candidate in 2012 represents a greater threat to free enterprise than Professor Warren,” Engstrom said then.
Engstrom did not get back to us to discuss Warren for this story. But now, lobbyists for the banking and financial industries are trying to keep Warren off the committee where she could best regulate them.
“The companies responsible for the 2008 financial collapse — the Wall Street banks, the Chamber of Commerce and others — are trying to keep one of the architects of Wall Street reform off the Senate Banking Committee,” said Ed Mierzwinski, a consumer advocate in the national office of MASSPIRG.
But Mierzwinski said Warren goes to Washington with allies.
“Who wants her on the Banking Committee?” Mierzswinski asked. “Everyone else.”
At this point, Warren’s supporters are predicting that if Warren wants it, she’ll get a seat on the Banking Committee.
U.S. Rep. Barney Frank pointed out that Warren had powerful Democratic allies in the Senate as she oversaw the administration of the Wall Street bailout and created the Consumer Financial Protection Bureau.
“Politically, it would be just a terrible self-inflicted wound if Democrats were to keep Elizabeth Warren off the Banking Committee,” Frank said. “I have no reason to think that they’ll do that. I’m very confident she’ll be on the committee.”
Frank was a lead sponsor of the most sweeping reform of the financial sector since the Great Depression. It’s known as the Dodd-Frank law. And he said that the financial sector has lost political capital with Democrats because they opposed President Obama’s re-election.
“Because we did financial reform in ways that they were offended by, they heavily supported Mitt Romney,” Frank said. “So these are people who tried as hard as they could to defeat Obama and defeat Democrats in general. We will still, I hope, or my colleagues will still listen to them on the merits, but I don’t think they’ve got any great sense that we owe them.”
Warren has something else going for her: She comes into the Senate as its most successful fund-raiser. She can tap into a nationwide network of small contributors in a way that no other member of the Senate can.
As executive director of the Center for Responsive Politics, Sheila Krumholz watches how members of Congress use their fund-raising powers. She said Warren is in a class by herself.
“She has a network of loyal donors who, if she asks for something, she’ll get it, and she can use that network of donors in much the same way that Obama can, to further her own prospects and the prospects of others,” Krumholz said.
Krumholz pointed out that Warren could be helpful to the political future of someone such as Charles Schumer, the senior senator from New York, who sits on the Banking Committee.
“For people like Chuck Schumer, she could provide cover, because he’s seen as faithfully representing the interests of Wall Street, so her endorsement or support for someone like him could help mitigate attacks, so in more ways than one, should a senior member find themselves in a fight, she’s an asset to be tapped,” Krumholz said.
The chairman of the Banking Committee is Democratic Sen. Tim Johnson, of South Dakota, the base for many credit card companies that have done battle with Warren. But Johnson has issued a statement saying he has a good working relationship with Warren and would welcome her to the committee if that’s what she wishes.
We asked for an interview with Warren, but we did not hear back from her team.
In the end, the decision is solely Senate Majority Leader Harry Reid’s. He is expected to announce who sits on what committee early next month.