Bank of America

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Bank of America would benefit from the passage of I-1053, but Washington would lose

Bank of America, headquartered in Charlotte, North Carolina, is one of the largest financial institutions in the United States, and also one of the biggest and most powerful corporations on Earth. It is the second largest corporation outside of the oil industry (behind Wal-Mart). Following its 2008 acquisition of Merrill Lynch, Bank of America became the largest wealth manager on the planet. It holds more than twelve percent of all deposits made in the United States.

Prior to that deal, Bank of America had subsumed Countrywide Financial, MBNA, The United States Trust Company, LaSalle Bank, FleetBoston, and NationsBank. all within one decade. At the time of its merger with NationsBank, Bank of America stopped operating Seafirst (which it had purchased in 1983) as an independent subsidiary; its branches were converted to Bank of America branches.

Bank of America is a major beneficiary of TARP, the Troubled Assets Relief Program, more commonly known as the “bank bailout”.

By the time President Barack Obama was inaugurated in late January 2009, Bank of America had already taken $25 billion in TARP money.

Assets in Washington State

Bank of America’s major assets in Washington include:

  • Two hundred and thirty nine branches in one hundred and twenty one cities
  • Corporate offices in the following buildings:
    • Fifth Avenue Plaza, located at 800 5th Avenue, Seattle, WA 98104
    • Columbia Center, located at 701 5th Avenue, Seattle, WA 98104
    • Bank of America Tower, located at 10500 NE 8th Street, Bellevue, WA 98004

Lobbying

Since 1990, Bank of America has spent more than $17 million on federal campaigns. Bank of America has historically donated slightly more money to the party in control of Congress, although it has broken with tradition for the current cycle, giving nearly sixty percent to Republicans, who are out of power. The current top recipients of Bank of America’s money are Republican Senate hopefuls Mike Castle and Kelly Ayotte.

Last year, Bank of America spent $3.68 million lobbying Congress at the federal level. It has already spent more than $2.1 million so far this year.

It spends additional sums lobbying at the state level.

Bank of America’s lobbyists in Olympia are David Swartley and Martin Flynn Public Affairs Inc. Bank of America’s 2009 lobbying expenses in Washington amounted to $83,937.60 (PDC data).

What Bank of America Wants

Bank of America, like other large financial institutions, is anxious to prevent the Legislature from ending a tax loophole that primarily benefits out of state banks. During the most recent legislative session, the House passed a budget closing this exemption. Although many senators wanted the Senate’s budget proposal to do likewise, the language was kept out at the insistence of Senator Jean Berkey, who heads the Banking Committee.

Senator Adam Kline explains:

I’m receiving a lot of e-mail supporting the closure of the tax exemption that is currently granted to banks on the interest earned on first mortgage investments. This deduction, which has been in place since the early 1980’s, means that banks don’t currently pay Business and Occupations (B&O) taxes on the interest or investment earnings made from the interest from residential first mortgages.

The Supplemental Operating Budget proposed by the House of Representatives proposes to cap this deduction at $100 million, so that each bank would be taxed only on the excess over that amount – i.e., if the bank earns $150 million in interest, it would pay tax on the additional $50 million. It is estimated that the cap on the deduction would garner around $59 million.

The Legislature ultimately did not close the exemption; as mentioned earlier, this was partly due to Jean Berkey’s interference. However, Washington will face another big budget deficit next year, and this exemption will be one of the first things on the chopping block… unless Initiative 1053 passes. If I-1053 passes, Republicans will assert that closing tax exemptions is tantamount to raising taxes, and impossible to do under I-1053 without their permission. Bank of America is essentially buying itself special protection to avoid having its special tax break rescinded. See, Bank of America would rather have that money for itself, rather than chipping in like a good “corporate citizen” to save public services from being eviscerated.

In summary, profit is more important to Bank of America than the fiscal health of Washington State (go figure). That’s why Bank of America supports Tim Eyman’s Initiative 1053.

Corporate Profile

  • Company Type: Public
  • Traded on: NYSE (BAC) and Tokyo Stock Exchange (8648)
  • Contribution Address: 401 N Tryon St Charlotte, NC 28255
  • Chief Executive: Brian Moynihan
  • 2010 1st Quarter Revenue: $19.9 billion
  • 2010 1st Quarter Net Profit: $3.2 billion

Contribution History for 2010 Cycle

From Public Disclosure Commission records…
Amount Date Initiative/Sponsor Committee Given To
$10,000 07/01/2010 1053 (Tim Eyman) Citizens for Responsible Spending

Total amount shelled out by Bank of America for electioneering: $10,000

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