Molly Ivins June 21

AUSTIN, TEXAS — Heads up, special interests everywhere: Would you like to know how to buy a law tailored especially for you, to fatten up your bottom line? Then you can't do better than to study the bankruptcy "reform" law just passed in the House of Representatives by a 306 to 118 vote. What a perfect pattern card this bill is for special interests; a veritable how-to manual for those who want to change the law so they can cash in.

First off, you must not neglect the all-important campaign contributions. Yes, friends, unless you pay, you cannot play — and the credit industry shows us how to maximize the investment by paying special attention to those all-important committee leaders.

According to The Wall Street Journal, which has done some excellent reporting on this bill, the American Financial Services Association gave about $100,000 to congressional candidates and political parties last year — up 30 percent from its contributions in 1995, the last non-election year.

In February, the AFSA held a $1,000-a-plate fund-raising dinner for Florida Republican Bill McCollum, a sponsor of the "reform" legislation. According to Common Cause, the consumer-credit industry — banks, credit-card companies, consumer-finance companies, credit unions and S&Ls — gave more than $58 million in campaign contributions between January 1987 and March 1998. This figure includes $49.7 million in PAC contributions and $8.4 million in soft money — $31.8 million to Republicans and $26.3 million to Democrats.

Next, you want to invest in a major, multimillion-dollar public-relations campaign to influence public opinion on your issue. We suggest that you start by funding some "research" on your issue.

Amazingly often, if you pay for the research, it will come out saying just what you want it to. Then you use this "research" as the basis for television ads trumpeting what a terrible problem there is with current bankruptcy laws and claiming that they are so abused that it costs every American family $400 a year just because all those terrible deadbeats refuse to pay off their credit cards. We guarantee that the media will credulously parrot the results of your "independent research," thus helping move public opinion in your favor.

Of course, there is the occasional setback, as when the General Accounting Office puts out a report politely noting that your "research" is full of hooey, that you have failed to use random samples, and that you have bent some numbers and provided no backup for some conclusions. Above all, when you are running television ads about the dire rise in bankruptcies, allow no information showing that you created the problem yourself.

Why are more people taking bankruptcy? Because more people have gotten hopelessly into debt. Why? Because the credit-card companies have been pushing credit cards on economically marginal citizens in a way that makes crack pushers look like pikers.

According to the Consumer Federation of America, between 1993 and 1996 the rate of households with incomes below $20,000 being solicited for credit cards rose from 40 percent to 58 percent. One new ploy is to send checks for thousands of dollars worth of unsolicited loans — just send them right out there. According to The Associated Press, one bank brags that it has signed up more than $1 billion in loans in this interesting fashion.

The Wall Street Journal found a family in California that kept track of the amount of credit they had been offered: $4.9 million in 1997 alone.

Interestingly, $2.5 million of this credit was offered to the lady of the house, who has no income of her own. Another $1.4 million was offered to a 26-year-old daughter. The banks call, they write, they send unsolicited cards and checks, and they offer special deals "by invitation only."

And here's a beaut: They cut off your credit if you pay off your cards. Honest. In October, Beneficial National Bank cut off 12,000 MasterCard holders because they paid their credit-card bills in full every month, running up no interest. Too good a credit risk, no credit.

Apart from these shameless, reckless credit-pushers, people go into bankruptcy for the same reasons they always have. The "booming economy" disguises a lot of hardship: People get laid off (mergers and acquisitions at a higher rate than ever); they lose medical insurance (cutting benefits is a favorite new corporate ploy); and they get divorced. An additional factor, although it is hard to get solid numbers on it, is the spread of state lotteries and casino gambling. When you legalize casinos, gambling addiction follows as night follows day.

The increase in bankruptcies was supposed to be addressed by a government-appointed commission, which spent more than two years looking into the problem. In the end, five of its nine members found no major abuse of the bankruptcy system or need for a crackdown, and only two members endorsed anything like the bills Congress is embracing.

No problem for our special interest: The credit pushers embarked on a campaign to discredit the National Bankruptcy Review Commission. An AFSA attorney told a debtors' attorney, "We're going to nuke this when it gets to Capitol Hill." The creditors' coalition wrote Congress that the commission was "lacking in responsiveness to the testimony and other input from creditors," even though the creditors had a team of two dozen lawyers attend each of the 21 hearings held around the country.

Next, according to the Journal, "the financial industry amassed a war chest and an army of top-tier policy-shapers" — lobbyists, PR firms and pollsters. They hired lobbyists with clout in each party: former Republican National Chairman Haley Barbour and former Clinton Treasury Secretary Lloyd Bentsen.

"In addition," said the Journal, "the trade groups mobilized their foot soldiers across the country, offering a toll-free 'Grassroots Hot Line' to patch local bankers through to their congressman's office. In at least five states with senators on the critical Judiciary Committee, coalitions were formed by bankers, other lenders and retailers. Though the groups claim to be local, their press releases are virtually identical.

"The public-relations blitz focused on two themes: that bankruptcy filers are the 1990's version of President Reagan's 'welfare queens' and that the average family picks up the tab."

Should anyone not go along with your PR schemes, you must move to discredit them. In March, the National Bankruptcy Conference — top attorneys, law professors and judges — issued a statement blaming creditors, not debtors, for the rise in bankruptcy filings. Oops. So the creditors' lobby went after the NBC, including law firms with partner-members of the NBC.

The dandy upshot of all this effort is that Congress is obligingly passing a bill to address a problem that doesn't exist so credit-card pushers can keep their hooks in working people who never should have been given huge credit lines in the first place and now will have to pay ghastly interest rates on them forever. We live in a great nation.

Molly Ivins is a columnist for the Fort Worth Star-Telegram. To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 1998 CREATORS SYNDICATE, INC.