Banking chief Dodd to leave US Senate – sources

January 6, 2010

By Thomas Ferraro

WASHINGTON, Jan 6 (Reuters) – U.S. Senate Banking Committee Chairman Christopher Dodd, a key player in still-unfinished work to overhaul U.S. financial regulations, will announce on Wednesday he will not seek re-election in November, two senior Democratic party aides said.

The news, coupled with another Democrat’s retirement announcement, underscored the fragility of the Democrats’ Senate majority, which is just enough to push President Barack Obama’s agenda past Republican procedural obstacles.

The aides offered no reason for Dodd’s decision, but it had been clear for months the Democratic lawmaker from Connecticut, dogged by questions over his financial industry connections, had faced the prospect of being voted out of office.

It remains to be seen how Dodd’s withdrawal from the race will influence how he handles two major jobs in the Senate this year — one as chief steward of financial reform and the other in the healthcare debate.

Dodd, 65 and a former presidential hopeful, was the leading player in early 2010 for Democrats and Obama on sweeping regulatory reforms they want to push through to prevent a repeat of 2008’s global financial crisis.

On Tuesday, Democratic Senator Byron Dorgan announced he would not seek another six-year term. Polls showed that he, like Dodd, faced an uphill fight in November when voters will elect a third of the 100 senators and all 435 House members.

Rivals have hammered the white-haired Dodd, a 35-year veteran of U.S. politics, over his connections to the financial industry and two mortgages he got in 2003 from Countrywide Financial Corp, once the nation’s largest home lender that was acquired by Bank of America in 2008.

Dodd got the loans through a Countrywide VIP program.

Critics said they represented a conflict of interest since Dodd’s committee oversees mortgage lenders. A Senate ethics investigation followed.

In February 2009, Dodd said he acted properly, refinanced the mortgages, apologized to the people of Connecticut over the episode, and made public all records related to the loans. The ethics investigation ended.

But for months now, Dodd’s poll numbers have been weak. Some Democrats had wondered if he could win another term. His retirement could clear the way for a stronger Democratic candidate.


Dodd is trying to fashion a financial reform bill to match one produced last month by the House. He has parceled out key issues to bipartisan teams on the committee.

Some lawmakers say progress is being made. But deep disagreements are certain to challenge even one of the Senate’s top consensus builders. The Senate will not fully reconvene until Jan. 20. To get his legislation through, most analysts say, Dodd, too, will have to make compromises.

Dodd, a centrist, has longstanding ties to Wall Street, having raised millions of dollars over the years from employees of firms like Goldman Sachs and Citigroup, many of whom go home to Connecticut from New York City every night.

Dorgan, of North Dakota, said his decision not to seek re-election was unrelated to the prospect of a tough election battle this year but because he felt it was time to pursue other interests after 30 years in Congress.

Republican National Committee Chairman Michael Steele linked Dorgan’s decision to the Democratic Party’s alignment with Obama’s policies.

“Today’s announcement … highlights just how vulnerable both Senate and House Democrats have become since deciding to walk in lockstep with President Obama’s government-run policies,” Steele said in a statement.

Historically, the majority party in Congress tends to lose seats in the first congressional election after a presidential election.

(Writing by Howard Goller, Editing by Paul Simao)

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