Silicon Valley Bank (SVB) President and CEO Greg Becker speaks during the Milken Institute Global Conference on May 3, 2022 in Beverly Hills, California.
Patrick T Fallon | AFP | Getty Images
Before Silicon Valley Bank’s failure, its former CEO Greg Becker backed two tech industry lobby groups trying to influence the Dodd-Frank financial reform bill and pushing for corporate tax cuts, according to records verified by CNBC.
In the run-up to the bank’s collapse, Becker ran a group called TechNet and served on the board of the Silicon Valley Leadership Group, two trade organizations that have lobbied government officials on a range of issues related to the firm. Becker resigned as TechNet chairman earlier this year, but remained on the group’s board of directors until Monday, when he resigned.
Both trade organizations included Silicon Valley Bank as a member before failing, according to archived versions of their websites. Current members of both organizations include tech giants Google, Amazon, Meta and Apple.
SVB collapsed under pressure after customers withdrew a staggering $42 billion last week. Days after the bank was forced to close on Friday, regulators halted SVB customer deposits as part of a series of measures to stem the damage from its collapse. Regulators later appointed Tim Mayopoulos as chief executive of the SVB.
Lobbying by trade groups linked to Becker and SVB adds to a series of efforts to influence policy that have attracted lawmakers’ attention since the bank’s failure. Some members of Congress have asked for more information about the practices that have left the bank vulnerable and its drive to eliminate regulations, along with Becker’s sale of more than $3 million in stock in late February.
Sen. Elizabeth Warren, D-Mass., a member of the Senate Banking Committee, sent a letter to the bank’s board of directors, asking him to “describe the full extent of your efforts to reverse the Dodd-Frank regulations in Congress.” Warren and other lawmakers are now pointing to the bank’s failure as justification for tightening safeguards in the financial industry, including by repealing a 2018 law that relaxed the Dodd-Frank rules.
When Becker ran TechNet, the group piled money into shaping federal policy — pieces included by Dodd-Frank. The organization has spent more than $2 million lobbying Congress since the beginning of 2020, according to its lobbying disclosure reports.
TechNet spent $1.84 million on 20 internal and external lobbyists last year, the highest investment in lobbying since 2005, according to data from nonpartisan watchdog OpenSecrets. The trade group had huge coffers to draw from, raking in more than $4.2 million in membership dues in 2020, according to its most recent financial disclosure form filed with the IRS.
TechNet focused in part on “Section 1033 of the Dodd-Frank Consumer Protection Act,” according to its disclosure reports. Records show that the group worked with House and Senate lawmakers and officials from the Consumer Treasury Protection Bureau on the consumer disclosure-related provision.
Steve Kidera, a spokesman for TechNet, told CNBC that the group’s “disclosed lobbying on Section 1033 was a consumer privacy issue related to the announced disclosure of proposed rulemaking at the CFPB on privacy, one of the top policy issues in our industry.”
Section 1033 was introduced as part of the sweeping financial reform legislation enacted by former President Barack Obama after the 2008 financial crisis.
The CFPB says it is “in the process of writing regulations to implement” Section 1033, which would require financial institutions like Silicon Valley Bank to “make transaction data and other information about a consumer financial product or service available to consumers upon request.” the consumer receives from the covered entity.”
Although the lobbying disclosures don’t explain whether TechNet supports or opposes Section 1033 as written, the organization clearly wants a say in how the rule is implemented.
The group’s policy principles for 2023 state that it aims to “establish robust consumer data directly through Section 1033 rulemaking that encourages the free flow of consumer-authorized data throughout the financial ecosystem.” TechNet added that it “supports a flexible, consent-based framework to inform consumers about how their information is shared, transferred, stored, and used.”
The other trade organization for which Becker sat on the board has dug into its own deep pockets to influence politics. The Silicon Valley Leadership Group raised $1.3 million in contributions in 2020 and raised another $2.9 million through membership dues, according to records filed with the IRS.
Their 2021 records, provided to CNBC by the organization following a request, show that they earned almost the same amount in membership dues that year. According to records, the group raised more than $940,000 through donations in 2021.
The organization boasts on its website that it has “supported comprehensive corporate tax reform, including lowering the corporate tax rate and moving to a hybrid/territorial international tax regime.”
The corporate tax rate last fell in 2017. Former President Donald Trump signed into law GOP tax cuts, lowering the rate from 35% to 21%.
Laura Wilkinson, a spokeswoman for the Silicon Valley Leadership Group, told CNBC that Silicon Valley bank executives are part of the group’s coalition of dozens of member companies, which met with House and Senate lawmakers on Capitol Hill in 2017 to meet for a reduction in the corporate tax rate.
“We are focused on strengthening competitiveness by fighting for a fair corporate tax system at the local, state and federal levels,” Wilkinson said. “2017 included joining the broad coalition of high street corporations and innovation leaders working for a simpler and fairer tax system as part of a broader tax reform to support economic growth and American jobs.”
Federal filings show that the Silicon Valley Leadership Group has not filed any lobbying disclosure reports since 2009.
Becker served as chairman of the Silicon Valley Leadership Group from 2014 to 2017, according to an archived version of his SVB bio page. Becker could not be reached for comment.
SVB and Becker support Democrats
While pursuing political goals that sometimes clashed with Democrat priorities, SVB and Becker often gave money to the party’s candidates.
One of Becker’s big donations in the 2022 election cycle went to Senate Majority Leader Chuck Schumer, DN.Y., according to Federal Election Commission records. Schumer gives to charities the contributions his campaign received from both Becker and the bank’s PAC.
Since 2011, the year Becker became CEO and president of the SVB, his political action committee has given the majority of its donations to Democrats in every election cycle, according to OpenSecrets. The exception came in 2012, when Republicans retained control of the House of Representatives even when Obama won re-election.
Senator Mark Warner, D-Va., a member of the Senate Banking Committee, also received input from Becker. According to Federal Election Commission records, Warner received $11,400 from the ex-bank CEO over the course of the 2020 and 2022 election cycles. Sen. Jon Tester, D-Mont., received $3,000 from the bank’s PAC in 2017, according to FEC filings.
According to an invitation to the gathering, Becker also hosted a fundraiser for Warner at his home in California in 2016. Warner and Tester officials will not say if they plan to donate any of the funds they received from Becker or the bank’s PAC.
The veteran lawmakers voted in favor of the 2018 law, which rolled back parts of Dodd-Frank.
The bill they supported reclassified the “too big to fail” standard under Dodd-Frank, which came with increased regulatory scrutiny. By raising the regulatory threshold for banks from $50 billion in assets to $250 billion, mid-sized banks have been exempted from these regulations. Becker, in testimony delivered before a Senate panel in 2015, called for a similar request to exempt his and other midsize banks from the Dodd-Frank rules.
The Federal Deposit Insurance Corp., which helped build protection for SVB depositors, said before the bank’s closure that the company had about $209 billion in total assets — which would have made it subject to those rules prior to 2018.