David Albert Scott, an American politician/businessman, is the incumbent Member of the US House of Representatives from Georgia’s 13th district. He’s also the Chair of the House Agriculture Committee.
On Tuesday, SEC Chair Gary Gensler testified in front of the Financial Services Committee, and Rep David Scott’s statements stirred a lot of controversies when he stated; He (and his staff) is putting together a bill that would provide strong enforcement powers to the Government, including fines and jail sentences targeting the retail crowd on social media (predominantly the Reddit crowd).
One moral question that arises from his statement on Tuesday – How come a representative of the Congress who’s elected to protect the American people is trying to do something that would benefit the corporate elites and not the people? The answer is simple – He’s always been that way all along.
Over the years, Scott has had a lot of donations from the financial industry while voting for many minor amendments and legislation that decreases the restrictions of Wall Street.
The significance of the Agriculture Committee
The House and Senate agriculture committees were given regulation over derivatives in the 19th Century when farmers first started trading crop futures in order to stabilize prices, and the committees held onto their jurisdiction through the creation of the Commodities Futures Trading Commission (CFTC), which regulates the unfathomably massive US derivatives markets. That means the Committee routinely votes on bills that affect the balance sheets of Wall Street firms like Goldman Sachs far more than they impact the growing of crops or the rearing of livestock.
Derivatives markets comprise’ of financial instruments built atop other assets, like collateralized debt obligations, interest rate swaps, and white sugar futures. They can be used for hedging to limit risk, but they are also routinely used for pure financial speculation.
25 most corrupt members of Congress (2007)
Rep. David Scott has never been shy of controversies. In 2007 he was named one of the 25 most corrupt members of Congress by the political watchdog group Citizens for Responsibility and Ethics in Washington (“CREW”).
The watchdog group sent a letter to the then Acting Attorney General, Peter Keisler, detailing the Tax law violations and misuse of official resources.
Intercontinental Exchange, one of the biggest exchanges for the commodities market, is based in Georgia; And they have made significant donations to Scott’s campaigns.
And the top industries donating to him were from the business and the financial world. Insurance, Securities & Investment and Commercial banks are to name a few.
Scott siding with WallStreet
Rep. David Scott was a lead sponsor for several legislations, but most of them sided with corporate giants. He supported a constitutional amendment in banning “Same-Sex Marriages” (2004 and 2006) – a fundamental right of every American citizen to decide whom to marry; Voted for the US to continue selling Arms to Saudi Arabia; and also was against Iran’s Nuclear Deal.
Being the chair of the Agricultural Committee’s Commodity Exchanges and a member of the House Financial Services Committee, he has a history of partnering with opposition (and WallStreet) to deregulate the derivatives markets.
In 2012, Scott was one of the representatives who signed a letter that threatened to withhold regulators’ funding unless they ensure “flexibility” for banks in their implementation of the Volcker Rule, a provision of Dodd-Frank that was intended to prohibit federally-insured commercial banks from making certain kinds of speculative trades with their own accounts.
In 2013, the Committee passed seven Republican-sponsored bills designed to roll back the derivatives regulations that Congress had passed three years earlier in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Scott signed on as a co-sponsor to all seven bills.
Swaps Regulatory Improvement Act was a bill aimed to squash Section 716 of Dodd-Frank, which requires federally-insured depository institutions to “push out” their derivatives activity to non-bank affiliates to protect taxpayers; in case their trades go sideways and impact their ability to meet their liabilities. Under the bill (written in part by Citigroup lobbyists), all derivatives trades besides some that are based on asset-backed securities would be exempted from the push-out requirement. This bill will eventually be rolled out and signed into law. Scott voted yes for this.
In June 2019, Scott signed a letter urging financial regulators to roll back a rule requiring banks to put aside margin when making derivatives transactions among their affiliates in order to protect insured banks from losses stemming from the activities of their riskier affiliates.
Also in February 2013, new rules were intended to curb the abusive forms of payday lending. Scott was constantly praising the industry, using language that sounded scripted. He said such “small-dollar” loans were “highly transparent” with “built-in controls to limit the use”; products so good, they’re designed to prevent people from using them. “They’ve all received positive feedback from our borrowers,” Scott said.
As a member of Congress, David Scott doesn’t have any borrowers. But Richard Hunt, the top lobbyist for the Consumer Bankers Association, represents plenty of companies that do. It turns out Scott was reading from a 2013 testimony that Hunt gave to the Senate.
Scott was taking the side of an industry that has given him more than $72,000 since his election to the House in 2002. The bulk of that money was contributed during the Great Recession, which prompted lawmakers to develop the Dodd-Frank Act and rein in predatory lending practices to consumers.
The fact of the matter is, Rep Scott has always sponsored legislations for both lobbyists and WallStreet giants. So this is not his first time. The only difference is, this time he was pretty direct on whom he wants to control – social media crowd aka Reddit crowd aka the common man; The common man who voted for him to get him to power.