More Members Refuse Bank Donations
With public outrage mounting over AIG’s bonuses, the universe of lawmakers no longer accepting campaign contributions from struggling banks continues to grow.
Senate Finance Chairman Max Baucus (D-Mont.) and three other senior Democratic members of his committee — Sens. Kent Conrad (N.D.), Blanche Lincoln (Ark.) and Tom Carper (Del.) — are all closing their campaign coffers to the troubled banks.
The decision to forgo Wall Street’s campaign checks is not universal.
Most of the 46 members of the Finance Committee and Senate Banking, Housing and Urban Affairs Committee, which oversee the financial services industry, are remaining tight-lipped about whether they’ll continue to accept the banks’ checks.
Thirty-two of the 42 Senators on the Banking and Finance committees — including the ranking member of the Banking panel, Sen. Richard Shelby (R-Ala.) — did not respond to a Roll Call survey of their policy for accepting money from banks receiving money from the Troubled Asset Relief Program.
Many Democratic leaders in the House have already signaled that they will not accept the banks’ money, including Speaker Nancy Pelosi (Calif.) and House Financial Services Chairman Barney Frank (Mass.).
Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.) told Roll Call earlier this month that the campaign committee was reviewing whether to take contributions from the troubled banks, but the committee has not yet released any guidance on the issue.
But key Senate players like Majority Leader Harry Reid (D-Nev.) are still reviewing whether to accept banks’ campaign contributions, according to a Reid spokesman.
Likewise, Democratic Senatorial Campaign Committee Chairman Bob Menendez (N.J.) is also staying mum on the issue.
Menendez, who is a member of both the Finance and Banking committees, is charged with raising millions of dollars to help maintain the Democratic Senate majority and counts Wall Street among his stable of go-to donors.
During the 2008 cycle, members of the Finance and Banking committees received $5.2 million from financial institutions that are now TARP recipients, according to the Center for Responsive Politics.
But several Democratic lobbyists said they did not expect the DSCC to take a stance on the failing banks’ campaign contributions because they will need the financial institutions’ deep pockets to help pay down the massive debt the committee rang up in the 2008 cycle.
The DSCC had $10.9 million in debt on the books at the end of January, according to Federal Election Commission reports.
DSCC spokesman Eric Schultz said the campaign committee is “reviewing our policies, but can tell you that above all else, we’ll follow the law.—
Banking Chairman Chris Dodd (Conn.) also said last month that he was no longer accepting campaign contributions from banks that received federal bailout funds.
It’s unclear how much money the struggling banks will raise in the upcoming cycle. But for Senators like Dodd, who is facing potentially his toughest Senate re-election fight ever in 2010, the decision to forgo contributions will cut heavily into his donor base.
The Connecticut Democrat received $854,200 in the 2008 election cycle, including money to his presidential campaign, from companies that received bailout funds, according to the Center for Responsive Politics.
It’s not clear whether Dodd will also abstain from taking campaign contributions from employees of the financial institutions.
Some Senators rarely, if ever, took banking donations in the first place.
Sen. Herb Kohl (D-Wis.), a multimillionaire who almost entirely self-finances his campaigns, already had a strict prohibition on campaign contributions, according to his spokeswoman, Lynn Becker.
“He doesn’t accept donations from banks; he refuses donations from PACs and lobbyists; and he doesn’t solicit contributions from anybody,— Becker said in an e-mail.
Other Senators, like Arkansas’ Lincoln, are taking a more nuanced approach. Lincoln has not accepted contributions from non-Arkansas banks that have received bailout funds since January, according to her campaign manager, Steve Patterson.
“It’s not a matter of the TARP banks being dirty or in any other way unacceptable to us. She just feels like as long as they are accepting taxpayer funds to operate more effectively, it’s in her best interest not to accept their contributions,— Patterson said. “We’re trying to avoid PACs and employees and lobbyists connected to TARP banks, and we’re doing the best we can to identify them.—
Carper, who is not accepting PAC contributions from banks that received bailout funds, is also leaving the door open to changing that policy in the future.
“I will revisit this next year and thereafter,— Carper said.
Other Senators such as Majority Whip Dick Durbin (D-Ill.), John Kerry (D-Mass.) and Olympia Snowe (R-Maine) have put off making any decision about the campaign contributions because they are not in cycle.
Durbin has, however, instituted a policy of not meeting with banks seeking TARP funds, according to his spokesman Max Gleischman.
As more lawmakers refuse their campaign cash, financial services companies have started to review their own political giving strategy.
American Express is taking a more “go slow approach,— according to the credit card company’s Senior Vice President of Government Affairs Arne Christenson. “We’re in a bit of a pause,— Christenson said. “We’re taking a chance to think things through.—
The company, which dolled out $471,000 in the 2008 election cycle, is continuing to solicit employees to contribute to its PAC.
American Express’ decision is similar to financial giant JPMorgan Chase, which has also drawn down its political giving in D.C.
Several Senators on the two committees, including the Finance Committee’s ranking member, Sen. Chuck Grassley (R-Iowa), as well as Sens. Mike Johanns (R-Neb.), Mike Enzi (R-Wyo.) and Sherrod Brown (D-Ohio) are still taking the banks’ money.
Similarly, Sen. Orrin Hatch (R-Utah) is continuing to solicit funds from the financial institutions.
“We should not tar every firm that receives TARP money with the same brush,— Hatch spokesman Mark Eddington said. “It is important to remember that many TARP recipients and their workers had little or nothing do with the excesses that helped cause the current economic crisis.—
“In fact, some small-and medium-sized banks were encouraged by the Treasury Department to take the money,— Eddington said.
Emily Pierce and Katie Kindelan contributed to this report.
Correction: March 17, 2009
The article incorrectly reported that Sen. Mark Warner (D-Va.) was receiving campaign donations from banks receiving TARP funds. He is not.