The question was simple: Should the lending practices of auto dealers be regulated?

It was already October and the 42 Democrats and 29 Republicans on the House Committee on Financial Services had spent the better part of the year hashing out the details of a new federal agency dedicated to protecting consumers from dangerous and deceptive financial products.

Auto dealers seemed like an obvious target for the new agency; nearly every time someone buys a car, the dealer also sells them an auto loan, complete with promises like zero per cent interest and a pile of cash back. Americans hold some $850 billion in car debt and dealers are responsible for marketing roughly four-fifths of that amount. They pocket lucrative commissions with little oversight, and the committee seemed poised to change that.

Enter Rep. John Campbell (R-Calif.), a former Saab dealer from Orange County, who according to his latest financial disclosure statement still collects rent from some of his former auto dealer colleagues. Campbell downplayed the importance of his industry partners and proposed an amendment to the bill exempting dealers from the new agency's purview. On October 22, it came up for a vote.

As usual, the members filed into the high-ceilinged first-floor hearing room in the Rayburn House Office Building. Committee Chairman Barney Frank oversaw the vote atop four tiered rows of seats, a full story above the witnesses and the audience. The longest-serving Democratic members of the panel -- informally known as the banking committee -- sat to the right or just below the chairman; it can take years, if not decades, for a freshman representative to ascend up the risers.

The clerk called the roll, starting from the top. Senior Democrats roundly rejected Campbell's amendment. It appeared as if the Democrats would beat back the effort and apply the same standard to car dealers that was applied to everyone else.

Then came the bottom two rows, the place where reform goes to die. Despite the disapproval of the powerful chairman and nearly every consumer group in the country, the Campbell amendment passed by a 47-21 margin.

THE FRONTLINES

In the fall of 2008, Democrats took the White House and expanded their congressional majorities as America struggled through a financial collapse wrought by years of deregulation. The public was furious. It seemed as if the banks and institutions that dragged the economy to the brink of disaster -- and were subsequently rescued by taxpayer funds -- would finally be forced to change their ways.

But it's not happening. Financial regulation's long slog through Congress has left it riddled with loopholes, carved out at the request of the same industries that caused the mess in the first place. An outraged American public is proving no match for the mix of corporate money and influence that has been marshaled on behalf of the financial sector.

The banking committee is the second-largest in Congress -- the Transportation and Infrastructure Committee has three more members -- and is known as a "money committee" because joining it makes fundraising, especially from donors with financial interests litigated by the panel, significantly easier.

The Democratic leadership chose to embrace this concept, setting up the committee as an ATM for vulnerable rookies. Eleven freshman representatives from conservative-leaning districts, designated as "frontline" members, have been given precious spots on the committee. They have individually raised an average of $1.09 million for their 2010 campaigns, according to the Center for Responsive Politics; by contrast, the average House member has raised less than half of that amount.

Raising that much money, even with a golden seat on the committee, takes an awful lot of time. The Democratic Congressional Campaign Committee (DCCC) pushes members to do as much "call time" with potential donors as is physically possible from the moment they win election -- which doesn't leave much time for legislating.

"It creates a culture where people don't have to show up," says freshman Rep. Jackie Speier (D-Calif.) about the combination of the committee's size and the ever-pressing fundraising concerns. Speier, a freshman on the committee, says she began to think she was stupid for showing up to every single hearing when she first arrived on the Hill. "I don't know if it's just an unspoken rule around here -- because I'm still very new -- but it appears you don't have to show up for the hearing. You just show up to vote... I think for really thoughtful discussion and review to take place, you have to be an active participant. You can't just be the vehicle to whom one of the special interests throws an amendment with a statement attached and feel that you're doing the people's work."

Because the frontline members face the possible end of their careers in November and may be beholden to the whims of powerful donors, the Democrats' 13-seat advantage on the committee is weaker than it appears. If seven members break with the party on a vote, the GOP wins. Rep. Luis Gutierrez (D-Ill.) refers to them as "the unreliable bottom row." (The second row is little better, populated by the Democrats from red-leaning areas who first took office after the 2006 election.)

In short, by setting up the committee as a place for shaky Democrats from red districts to pad their campaign coffers, leadership made a choice to prioritize fundraising over the passage of strong legislation. "It makes it difficult to corral consensus," says Rep. Stephen Lynch (D-Mass.), a subcommittee chairman, of the unwieldy panel.

And just as the lure of money leads inexperienced new members to join the committee, it prompts experienced staffers to bolt for larger paydays in the private sector. "You have this phenomenon where if you have a staffer who's very experienced on a certain issue and is dealing with the financial sector for any number of months or years, all of a sudden they become a real acquisition target for Wall Street," says Lynch.

According to a HuffPost analysis of the 243 people who've worked on the committee -- including clerical and technology staff -- since 2000, almost half of the 126 people who have left registered as lobbyists, mostly for the financial services industry.

And recruiting experienced Capitol Hill hands to work on K Street pays off in material ways. For example, it didn't hurt the auto dealers' chances of winning an exemption that a third of the industry trade group's two dozen lobbyists are former Hill staffers.

Commercial banks, according to the Center for Responsive Politics, spent nearly $50 million lobbying in 2008 and dropped another $37 million in the first three quarters of 2009. They employed 417 federally-registered lobbyists.

And the revolving door turns in both directions. Sixteen of the committee's 86 current staffers -- including a good chunk of the senior staff -- worked as lobbyists before coming to the committee. (And it's not just Republicans; 12 of the 16 are Democrats.)

"The door doesn't just revolve once," says Rep. Brad Miller (D-N.C.). "They tend to go out and come back and go out again. It really does create a set of financial incentives, whether conscious or not."

Though Lynch laments the phenomenon of staffers fleeing to K Street, he's got nothing against the individuals who leave: "I don't begrudge any of these young people with huge student loans and some Wall Street firm wants to compensate them."

Frank blames staff compensation: "We underpay public officials. Particularly the staff. [Lawmakers] get a certain degree of non-monetary compensation -- psychic. You know, I get mentioned on 'Gossip Girl.'"

Staffers get a good look at how the other half lives; they rub elbows with lobbyists both at work (in meetings or even on extravagant field trips ) and off the clock, during ritualistic happy hours. Those who attend know the unspoken rule: don't talk too much shop but bring plenty of business cards. The friendly social scene helps explain why there's not much condemnation from staffers for colleagues who leave for higher pay.

"Everyone comes here to stand up for something they believe in, and at some point they go downtown to make money, and at some point someone they worked for draws them back [to the Hill]," says a former staffer who works as a lobbyist. "It's the running joke: a staffer gets married, you better go downtown! Spots open and one of the committee staffers has a kid. They'll be moving downtown. Money is number one."

"OUT-GRASSROOTSED"

As the House leadership set up committees for the 111th Congress in early 2009, Frank pushed to shrink the size of his own panel in order to better meet the historic challenges presented by the financial collapse and bailout, say several members of the committee including Reps. Mel Watt (D-N.C.), Miller and Lynch. Instead, it got bigger. "He was obviously outvoted," quips Lynch. "Either that or he missed the meeting."

Frank doesn't conceal his distress at the size of his panel. "I had no part in setting up the committee. That was all the Speaker," Frank says when asked about the front-row frontliners. Then, without prompting, he adds: "It's also very large, which is a problem. We're the second-largest committee, but the transportation committee does not have ideological issues."

The size and makeup of the committee have been a challenge even for Frank, a chairman not lacking in confidence or energy. "It's been very hard work. The committee used to be a very good little committee, because it had the urban constituency. But it's become a somewhat more desirable committee for people," he says. "There are a large number of people who have marginal seats, and it obviously makes me have to work harder and is a constraint on what we can do. We start out with what I want to do, but what's relevant is what I can get a majority for."

The sheer size of the committee can sentence reform to death by a thousand cuts. Each member of the majority, no matter where he or she falls on the political spectrum, has political interests back home. If those interests are affected by the bill, they've got someone on the panel to carry their concerns about "unintended consequences" to the chairman.

Frank denies that the big banks control his committee members; he actually claims that the big banks' backing of legislation these days is so toxic that he doesn't want their public support. "Goldman [Sachs] has no influence down here. Bank of America doesn't. Bank of America was ready to support the consumer policeman," Frank says in an interview in his office, referring to the Consumer Financial Protection Agency (CFPA). That support, he says, was politely declined.

There is some truth to Frank's point; groups like the auto dealers don't bring with them to Capitol Hill the public-relations baggage of Wall Street or Goldman Sachs. "The local auto dealers are very popular in their districts," Frank says. The more an interest group can make an issue district-specific and the more it can relate on an everyday level, Frank argues, the better it will do. "That's why the realtors always beat the bankers. The bankers sit and they go [Frank makes a dour face, leans back in his chair and tightly folds his arms, miming an aloof posture]. The realtors are out there joining the Kiwanis and sponsoring little league."

The same is true with John Deere, dairy farmers and other back-slapping boys from back home. But the big banks have figured this out, too -- and now they use precisely such groups to poke holes in the reform effort. Over the last year, they've drafted an army of credible little guys to walk the halls of Congress and push the interests of brokers, swaps traders and Wall Street bankers. And they've shown that they don't need big loopholes to slip trillions of dollars through.

"What's happening now is the pro-regulation forces are being out-grassroots-ed by the antis," Frank says. One member, he says, represented tons of title insurance companies. Another came from the headquarters of credit unions. A third's district is home to LexisNexis; another to Equifax. Each of those entities received special treatment because their representative sits on the committee -- and the more members on the committee, the more special treatment is needed. "I have not had a problem because of campaign contributions. The problem is democracy: it's people responding to people in their districts: community bankers, realtors, auto dealers, as I said, end users, insurance agents," says Frank.

A video of the vote on Campbell's amendment shows how the auto dealers won their victory. It's both serious and comical. After the senior committee members enter their no votes, the bottom two rows begin weighing in with yes after yes after yes -- followed by unanimous ayes from the GOP side.

Then, once it becomes clear that auto dealers are getting their way, those senior Democrats -- not wanting to get on the bad side of a powerful industry for a losing cause -- actually start switching their votes from no to yes.

As confusion spreads and more votes are changed, Frank tweaks his colleagues with a subtle dig. "Can I ask this? Would members please vote loudly, especially if you plan to vote differently than the clerk anticipates?" The chamber echoes with laughter.

Pretending that there is some mistake, several members ask the clerk how they were recorded before asking to switch their votes. After Rep. Dennis Moore (D-Kan.), a senior New Dem and a subcommittee chairman, employs this technique, Frank puts a stop to it. "I would also say, at the same time, if you know how you're recorded, don't ask the clerk. Just change your vote," he says. This time, there is no laughter.

Later on, when the bill was on the House floor, Frank and Watt, a subcommittee chairman, tried to narrow the exemption but failed. The lopsided committee vote had sapped the strength of the opposition.

The scene of the unfolding vote demonstrates a few things at once: First, notice the size of the committee and the time it takes for everyone to vote. Then, watch the bottom two rows up-end the legislation. And see how difficult the committee is to control, even for as forceful a personality as chairman Frank:

It's in this environment that Frank is tasked with passing what he considers financial reform as historic as "what Theodore Roosevelt and Woodrow Wilson did to control trusts, and what FDR did to control the stock market" -- a regulatory bulwark that stood firmly until it was disassembled in the '80s and '90s.

NOBODY COULD HAVE FORETOLD

The general makeup of the committee dates back to January 2007, when Democrats reclaimed control of Congress. It was a different world than the one today -- before the global financial crisis of 2008.

"No one knew when this committee was appointed that the U.S. economy, the world economy would walk to the precipice, and therefore put the eyes of the world on that committee. Nobody could have foretold [that]," says Rep. Emanuel Cleaver (D-Mo.).

As for the conservative sophomores on the committee: "No, you can't [kick them off]. I mean, you could, [but] it's not going to look good and probably going to hurt them," Cleaver says. "I mean, who wants to go home and explain why they were taken off the most active committee with the most significant legislation maybe in the last hundred years? That's not something I'd want to go home and explain."

Can the younger members go home and explain the legislation to begin with? Check out almost any committee hearing on C-SPAN 2, and those bottom two rows are typically empty, another example of the no-show culture that so surprised Jackie Speier. Just as over-involvement can slowly weaken legislation, under-involvement in the broader crafting of legislation results in members who don't understand what it is they're tackling -- though they might be able to repeat talking points from lobbyists. Over the summer, a senior Democrat on the committee, Maxine Waters of California, complained about committee members' closeness to bank lobbyists after freshman Blue Dog Suzanne Kosmas (Fla.) skipped a hearing on the financial crisis to attend a fundraiser with lobbyists from the financial industry.

"I understand they have almost hired a lobbyist for each one of us," Waters said, speaking after Speier in an almost completely empty hearing room. "I never expected that given the subprime meltdown and the number of foreclosures that we have that we would get that kind of opposition. How soon we forget. And I'm more concerned that there are members of Congress who are beginning to take on the arguments of the financial services industry about why a consumer financial agency is not necessary."

Then Waters chastised Kosmas for skipping out: "Even yesterday when we were engaged with consumer advocates, one member got up and left and went to a fundraiser with the banking community, in the middle of all that. Well, all I have to say is, I'm hopeful that our advocates will be stronger than ever and we will fight against this opposition."

The panel still muscled through some pretty tough legislation, argues Cleaver. "We've been able to get all the priorities of the administration through the committee in spite of some glaring handicaps, such as a large number of freshmen whose seats may not be safe," he says. "And if you look at the votes plural, you will see that on some rather key votes they actually vote against the administration's position."

The legislation's failure to tightly regulate the derivatives market, however, is a crippling weakness. And the frontliners take credit for that.

Democratic Rep. Jim Himes, a frontliner and a New Dem, knocked out moderate Republican Chris Shays in Connecticut in 2008. A former banker, Himes is already an influential member on the committee. "The list of [New Dem] principles for financial regulatory reform, I was intimately involved in that, because I co-chair the New Dem Financial Services task force with Melissa Bean," Himes says. Bean (D-Ill.), along with retiring Rep. Dennis Moore (D-Kan.), is a New Dem ringleader on the committee.

Bank lobbyists looking for the seven votes needed to up-end legislation know where to start. Bean and 15 other New Dems have effective veto power on the committee and are sympathetic to their interests. According to its mission statement, the coalition, which was founded in the boom year 1997, is "committed to enacting policies that encourage economic growth, maintain U.S. competitiveness, meet the new challenges posed by globalization in the 21st century, and strengthen our standing in the world." Wall Street lobbyists usually warn that banking regulations will harm U.S. competitiveness and slow economic growth.

Six of the committee's New Dems are frontline freshmen. The panel is also home to seven Blue Dogs, another faction of business-friendly Democrats, three of whom are also New Dems. Two of the Blue Dogs are frontliners, including Rep. Walt Minnick, a freshman Democrat from Idaho who worked to beat back the pro-consumer finance authority in committee and pushed an amendment on the House floor that would have gutted it. Both efforts failed, but Minnick was nonetheless singled out for praise by the American Bankers Association in a post-vote memo.

Some of the Blue Dogs and New Dems describe their experience working as bankers as an advantage. "I worked in the industry for many years, and so it's been very exciting for me to probably play a more engaged role than a new member ordinarily would," says Hines. "Scott Murphy and I and two or three others really drove the creation of the derivatives bill. Nobody understands it, but it's one of the more important aspects of the regulatory reform. And looking at it as a former businessperson, I think we've really struck a good compromise. I don't think the bill is in any way heavy-handed."

Murphy (D-N.Y.) is a former venture capitalist who won a special election to replace Kirsten Gillibrand when she went to the Senate. A Blue Dog, Murphy isn't on the committee, but on the House floor he punched a gaping hole in the derivatives portion of the bill -- which was already riddled with gaps -- exempting all sorts of swaps-trading from regulation and effectively undermining the legislation. Trillions of dollars of derivatives, which Warren Buffet has called "financial weapons of mass destruction," are traded in "dark pools" that nearly brought down the global financial system in 2008. Thanks to the frontliners, many of these pools remain unregulated in the House reform bill.

Brad Miller has had his share of battles with the bottom two rows. Many of "the Blues and News," as he calls them, are hamstrung by a "dependence on contributions from the industry. That traditionally has been one of the reasons to get on the committee. It was seen as a money committee."

BIPARTISANSHIP

Staffers and members of Congress who deal with lobbyists know that, if they play nicely, there will be career opportunities to come.

"Traditionally, the money committees as a whole have always been the most valuable places to jump from the Hill to K Street," says Ivan Adler, a headhunter at the McCormick Group. "Money committees" also include the tax-policy-writing Ways and Means Committee and the Energy and Commerce Committee. "Folks that are working on financial services and taxes are more valuable, no doubt."

K Street's paychecks flow to both parties. HuffPost compiled a list of committee staffers throughout the decade from Legistorm.com and cross-referenced their names with lobbying disclosure reports filed with Congress. Of the 126 people who have left the financial services committee since the end of 2000, lobbying disclosure forms show that 62 have registered as lobbyists at some point. That doesn't even include people who did not register as lobbyists but who nevertheless worked for law firms with lobbying departments.

Committee spokesman Steve Adamske, relying on information provided by personnel staff, identified the Democrats on the list that HuffPost showed to him. Of the 104 Democratic staffers, both current and former, 31 have been registered to lobby. Of a total 149 GOP staffers, 53 have registered to lobby, roughly the same percentage of total staff as the opposition. (The GOP has more total staffers over the time period in question because it controlled the committee until the 2006 elections. Frank became the highest-ranking Democrat on the committee in 2003; he became chairman in 2007.)

Staffers who go on to lobby are forbidden for one year from directly lobbying the committee they left. Adamske says that when staffers return from downtown to the committee, they are barred from working on the issue they lobbied on for one to two years, depending on the circumstances.

HuffPost was able to speak with a dozen of the 62 staffers who left the committee to become lobbyists; only a handful were willing to speak on the record while others spoke on background or off the record. Several say they left their jobs after being recruited by downtown firms. It's a process that Joe Ventrone, a former Republican deputy staff director for the committee, calls "cashing out."

"Cashing out is using your position to get a significantly greater salary in the private sector," says Ventrone, who now works for the National Association of Realtors. He says there's nothing wrong with leaving the Hill for K Street but he argues that, on the Hill, perception is reality; that if it looks like staffers sell their souls when they take jobs lobbying their former colleagues on behalf of industry, it's because they do.

Ventrone lobbies for realtors, but he says that he never contacts former colleagues in Congress. ("I didn't cash out like a lot of the other people on the Hill," he says.) He left the committee in 2001 to work for the Department of Housing and Urban Development during the Bush transition, then for the Federal Housing Finance Board. The realtors hired him in 2003 and he registered as a lobbyist in 2008.

For staffers leaving a committee job, a higher-paying position downtown is "a very logical progression," says former committee lawyer Howard Menell, who is currently retired. "They knew the people, they knew the laws, and that's what they did." Menell's only lobbying client after he left the committee was the National Multi Housing Council. He says he never contacted former colleagues and only did work that would help low-income housing. "I think I'm different because I particularly did not want to lobby on the issues that I worked on for so many years."

The lobbyists insist they don't fit the Jack Abramoff caricature of the profession painted by the media; they don't capitalize on their connections to pervert the legislative process on behalf of big-money clients.

In reality, lobbying is more boring: lobbyists visit the Hill for meetings with members and staffers to explain how proposed legislation might have "unintended consequences" that could hurt an industry. Or, lobbyists might be invited to make a large campaign contribution and share concerns with members over a meal. Opportunities to attend such events abound -- almost any member of Congress is available for breakfast, lunch, or dinner at some point during the week. And anyone is welcome so long as she or he brings a big fat check.

On Sept. 10, for instance, you could catch all 11 banking committee frontliners for breakfast at the D.C. headquarters of the Credit Union National Association, which over the years has employed at least two committee staffers as lobbyists. The price of admission was a donation to the DCCC ranging from $1,000 to $20,000, according to an invitation obtained by the nonpartisan Sunlight Foundation. The event was well timed -- the committee was just preparing to mark up its regulatory reform bill. Frank himself was billed as a special guest.

From the point of view of lobbyists, their work is just a matter of providing information and then telling clients where they stand in the legislative process. There is no incentive to provide bogus information to sway legislation. "If you lead them down a path that gets them burned, you're gone," says a former Republican staffer. "It's not in my best interest to tell a member if something's true that isn't."

But there's little doubt that former committee staffers use their familiarity to smooth the process. "All of them will come in and say they used to be you. 'I know what you're going through,'" recalls a staffer who left the committee for non-lobbying work. "They try to be real friendly."

When talking to reporters, lobbyists generally laugh at the idea that they have to power to shape legislation, despite such feats as the exemption of auto dealers from the purview of the CFPA. And it's true that they're mere middlemen. But then again, banks and other financial interests can afford an army of aggressive and well-connected middlemen, while consumers groups are left with one or two sentries to cover two chambers. It can mean the difference between winning and losing.

Sometimes, the notion that one lobbyist can be a negative influence is taken seriously. Michael Paese served as a lawyer and deputy staffer director for the committee until 2008, when he jumped ship and wound up lobbying for the Securities Industry and Financial Markets Association. Goldman Sachs scooped him up over this past summer. In an unusual move in September, Frank forbade his staff from talking to Paese for an additional year after his official 12-month "cooling off" period expired. Frank calls the suggestion that Paese might have been carrying water for potential future employers while still on Hill "paranoia."

Hill staffers who work on financial issues are particularly susceptible to lobbyists because, while they may be among the brightest to come through their college class, they often don't know all that much about finance. "They're stretched too thin, covering three or four issue areas," says a former staffer. And on the Hill, "issue area" doesn't mean bond markets or derivatives. "Financial services" is an issue; "health care" is another; "trade" and "education" could be two more, all covered by the same staffer.

"What they know is people," says a former staffer, "and the way you get to know these people is through happy hours or the [free] receptions" on the Hill, often sponsored by trade associations. Because staffers aren't always deeply versed in the particular issue they've been lobbied on, their advice to their bosses often reflects what they're hearing from K Street.

Frank is sometimes able to overcome that influence by going around the staffer. "The staffer is usually pushing something he heard from a lobbyist. If you can get the staffer and the member split up, you can usually get the member to agree to something," says a former staffer. He recalls a time when staff persuaded Rep. Al Green (D-Texas) to demand certain concessions from Frank; during the meeting, Green went out in the hallway to take a phone call; Frank met him out there and got him to change his vote.

ROUND AND ROUND THEY GO

Menell and others claim that nobody used to bat an eye when staffers went to K Street and back. It was all part of the pro-Wall Street consensus that developed during the boom years. By contrast, the new climate is creating tensions on the committee. When the financial system collapsed last fall, the bipartisan consensus on Wall Street came down with it. Amid populist fury, banking regulation has become more partisan. Some current staffers now say the hopping back and forth between competing sides should be seen for what it is: betrayal.

"You couldn't pay me enough to go be the spokesman for things like exploding mortgages, 39 dollar overdraft fees and double-cycle billing. These things might not have been 'party issues' a few years ago, but they very much are today," says a staffer.

Of the 16 people on the committee payroll who previously worked as lobbyists, former clients include H&R Block, the New York Stock Exchange, the Bond Market Association, Wachovia, MetLife and Experian. One staffer lobbied on behalf of the National Employment Lawyers Association, yet no staffers have done lobbying gigs with consumer advocacy groups like the Consumer Federation of America, Public Citizen or U.S. PIRG.

At least five are serving the committee for their second time. Committee lawyer Clinton Columbus Jones, for instance, worked for the committee for years before leaving to lobby for Fannie Mae in 2007. He returned to the committee in 2008, just before the Federal Housing Finance Board took the home-loan giant into receivership. Lawyer Jason Todd Spence served as a legislative aide to Rep. Bob Ney (R-Ohio) before a brief lobbying stint with the Independent Insurance Agents & Brokers of America; he returned to the committee in 2008.

"Sometimes you're puzzled at what causes that," says Rep. Lynch. "Is that the downsizing on Wall Street or is that a directional intent there, that staffers are coming back to carry water for a certain perspective? You have to be careful with that."

Mel Watt says he's seen how staffers with K Street backgrounds can be a boon to the committee. He also says he's seen it cut both ways. "If you get too connected to somebody and you start carrying their water, it can be a problem whether you're a member or a staffer," he says. "On the one or two occasions where I've experienced it, I called it to Barney's attention." A third member, who asked not to be named, says he had also seen particular staffers undermining reform legislation before heading off to K Street.

The chairman, however, says he is not concerned about staffers carrying water for past or future clients and employers. "What we have sought to achieve in our staff is a good diverse group of people who have different backgrounds and can bring different things to the table," says committee spokesman Steve Adamske. "At the end of the day, it is Barney's decision what the committee will be doing and it's the members who will vote on it."

SMART POLITICS

"Don't make yourself crazy with conspiracy theories," Rep. Rosa DeLauro tells HuffPost. A senior Democrat from Connecticut, DeLauro is co-chair of the Steering and Policy Committee; in that capacity, she decides which members get placed on which committees, with the approval the House Speaker. (The Speaker's office declined to comment.) DeLauro says that when she makes placement decisions, she isn't thinking of fundraising but rather is simply responding to requests made by members.

"I've been through this where everybody coming in wanted [the Transportation and Infrastructure Committee]. People coming in want Financial Services. There's a host of people who want Foreign Relations. It depends on themselves, their district, their own situation. If you go down that road, you're going to make yourself crazy," she says of the fundraising theory.

Ultimately, though, Democrats are essentially relying on a "great man" strategy, figuring they can dump as many bank-friendly Democrats on the committee as they want and Frank will generally keep them in line. "We have a lot of faith in Barney. He can handle it," says a senior Democratic aide when asked about the phenomenon. Frank's senior staffers, say several current and former committee aides, similarly outmatch their counterparts. The chairman, they say, is able to use the knowledge gap at both the member and the staff level to his advantage.

"The good news is that we have, in my opinion, the most extraordinarily competent chair of that committee in place. He knows his subject, he's one terrifically smart pol, and he has a lot of self-confidence, to say the least," says Majority Leader Steny Hoyer (D-Md.).

"It is an enormous committee, and that makes it difficult for anyone to do major legislating. And I would say that Frank has done a pretty significant task of legislating with such a challenging and diverse committee that's so large," says Rep. Patrick McHenry (R-N.C.), a committee member.

Hoyer says it's natural that business-friendly Democrats would seek out the committee. "The business community is very focused on the Financial Service Committee -- the banking community, brokers. So it's not surprising that more moderate Democrats, more business-focused Democrats, would want to go on the committee which deals with issues they legitimately believe have to do with the growth of the economy, creation of jobs and the growth of business. I think that the Financial Services Committee is a pretty representative committee."

Sure, he says, you could pack the committee with unreconstructed New Dealers, but you've still got to get the bill off the House floor. And then, of course, there's the Senate. "Now, you could create a committee of all right or all left, and they could report out all right or all left stuff, and you get to the floor, and you have chaos," he says. "When you get to the floor, what you get is this conflict and confrontation of the people who were shut out, who represent a broader spectrum. The glory of the Democratic Party in my opinion in the House of Representatives today is it, in fact, is a representative party of the country at large. The Republican Party 's not. And I think that's good news."

The House floor is indeed a treacherous place for reform legislation, with 67 New Dems looking to take a shot at it. But making it through committee gives legislation a head start. The auto dealers, for instance, would have had a very hard time winning their concession on the House floor, because the Speaker could have simply prevented Campbell from offering his amendment.

ANOTHER WAY

But the difficulty of corralling the conservative Democrats, the valuable spots they take up on the committee that could otherwise go to a moderate or progressive and the expensive campaigns they require to stay in office call into question the strategy that got them elected. The party's argument is that it is these marginal Democrats who give it the majority it needs to govern. But in seeking to craft its majority, the DCCC pays no attention to how those candidates will behave once in office.

One freshman, Alabama's Parker Griffith, after getting roughly $1.5 million from the DCCC in 2008 and 2009, returned the favor by voting against every Democratic priority and then bolting for the Republican Party. The bottom two rows of the banking committee have been filled at a price of tens of millions of dollars. That money could have instead boosted the campaigns of progressives such as Bill Hedrick, Dan Seals or Bill Durston -- all of whom lost tight races; none of whom would have voted with Wall Street.

Progressive congressional candidate Darcy Burner who, despite heavy backing from the DCCC lost a squeaker in Washington State in 2008, says the campaign strategy has a more insidious influence.

"The D-triple-C as an institution is much more inclined toward Blue Dog candidates than progressives and that's a self-fulfilling prophecy. They pick candidates who might be perfectly progressive and teach people to be less progressive. You really have to buck them to stay progressive," she says, citing her own experience and several candidates who gradually became more conservative under DCCC guidance. "Once you say that stuff to voters, you're expected to follow through."

("Members are encouraged to represent their districts," says DCCC spokeswoman Jen Crider.)

But is it all that pragmatic? Waffling centrists can have a hard time holding on to their seats -- especially when a populist wave comes washing over, wiping out pandering politicians. And by pushing for Washington to go soft on Wall Street, the frontline Democrats -- and the leadership that put them there -- have helped create the very storm that could carry them away.

Regardless of the loopholes they may have punched through the financial regulations, the vulnerable Democrats on the committee who routinely voted with the banks are sure to be labeled as proto-socialists by the GOP in 2010.

Committee Republican McHenry says that the Democrats will be hit for fostering a bailout culture and for over-regulating small businesses. And many of the Democrats will be ill-equipped to defend themselves because they don't show up for hearings and don't understand the financial system. "A number of these things very much run counter to what the American people want, and it's very difficult for them to explain the legislation because they don't understand it themselves," he says.

The only frontline Democrat on the committee to consistently oppose the banks has been Rep. Alan Grayson (D-Fla.). The Washington consensus is that his strong stance represents a huge risk in his swing district of Orlando. Yet Grayson does not yet have a credible opponent. Many of the centrist and conservative frontliners wish they could say the same.

Stronger progressives, says Burner, might have been in a better position to hold the seats. "They tend to hold on pretty well," Burner says. "One could argue that it's smart politics to actually have values."

Laura Bassett, Jeff Muskus and Elyse Siegel contributed to this report.

UPDATE: Steve Adamske sends in the following letter in response to this story:

We do have people who come to work for the committee who are not ex-bank lobbyists. One example of this is our Senior Economist, Dave Smith, who was the former chief economist of the AFL-CIO, and a long time staffer and friend to Senator Kennedy. We also have a whole housing team, who has pretty much dedicated their careers to the interest of public housing and affordable housing (mostly different types of rental housing). I also don't want to discount the dedicated government career staffers, such as my staff director and myself, who have not "cashed out"--although we have had many opportunities to do so--in order to stay in the government and work to better protect consumers and build affordable rental housing. In fact, the last private sector job I had was in 1986. This is not to say we don't have people on our staff that are from industry. We do, as you and I discussed. And it is through this diversity of backgrounds that we have the mix of experience and passion to help the chairman accomplish his goals.

Steve Adamske
Communications Director
House Committee on Financial Services
January 25, 2010