Democrats Can’t Bank on Wall Street Money
As Democrats raise cash for the final weeks of this campaign cycle, they shouldn’t expect the financial services industry to be their ATM.
Unlike most sectors whose political action committees favor the party in power, many banks are revealing their pique with Democrats in their campaign donations.
Industry lobbyists said the financial institutions are still furious over the Wall Street reform law signed by President Barack Obama in the summer. While the administration and Congressional Democrats said the measure was necessary to prevent future economic meltdowns, the industry views the new regulations as excessively burdensome.
And Wall Street executives are still chafing from some Democrats’ anti-big-bank rhetoric while debating the measure.
“No other industry has had this bull’s-eye on their back,” one banking lobbyist said.
The lobbyist said many corporate PACs give to the majority party under the rationale that they don’t want to anger key committee chairmen or party leaders who could have the ability to shape future legislation that affects their businesses.
But post-reform, the lobbyist said, the financial community did not see the downside of giving to Republicans.
“There is no fear of retribution from Democrats, because how much worse can it get?” the lobbyist said.
Through the end of August, banks had given almost $3.9 million to Republicans and $3 million to Democrats, according to a CQ MoneyLine analysis of Federal Election Commission filings.
That was a decline from the previous election cycle.
In 2008, slightly more than half of Bank of America’s contributions to federal candidates went to Democrats. This cycle, only 42 percent of its PAC money has gone to Democrats.
JPMorgan Chase’s PAC has doled out 44 percent of its contributions to Democrats this cycle compared with 47 percent in 2008. And Wells Fargo has given about 39 percent of its PAC money to Democrats this season compared with 47 percent in the previous season.
One of the most dramatic reversals has occurred at Goldman Sachs, the investment banking firm that is the target of securities fraud charges by the Securities and Exchange Commission. Lloyd Blankfein, the firm’s CEO, denied any wrongdoing at a contentious Senate hearing in April.
In the 2008 cycle, the firm sent almost 64 percent of its PAC money to Democratic candidates. But this time that share has plummeted to 43 percent. The firm also has given $40,000 to Republican leadership PACs compared with $25,000 to Democratic leadership PACs, according to the CQ MoneyLine analysis.
The financial giant does spread around some of its contributions to leaders of both parties. At the end of August, it gave $5,000 to House Minority Leader John Boehner (R-Ohio) and to House Majority Leader Steny Hoyer (D-Md.). The firm also gave $45,000 to Democratic Party committees and $30,000 to Republican committees.
Blankfein, who had previously made large donations to Democrats, including $28,500 to the Democratic Senatorial Campaign Committee in 2007, has donated just $4,800 to Democrats this cycle, according to FEC records. He also contributed $4,800 to Sen. Richard Shelby (Ala.), the top Republican on the Senate Banking Committee and a vocal opponent of the Wall Street reforms.
Goldman Sachs declined to comment on the company’s giving.
The Financial Services Roundtable, which has favored Republican candidates for the past eight campaign cycles, has given the GOP $212,000 this round compared with almost $179,000 to Democrats.
But Scott Talbott, the roundtable’s senior vice president of government affairs who said he personally delivers the PAC checks, dismissed the notion that the group is making a statement about partisan preferences.
“We focus on candidate qualifications, and party affiliation is a distant second,” he said.
One of the leading players on Capitol Hill in the debate over financial reform was the American Bankers Association. The ABA’s longtime president, Edward Yingling, who announced he is retiring at the end of this year, had suggested the legislation was too extreme.
A spokesman for the trade association said the group does not comment on its PAC giving. But the contribution numbers hint at the group’s dissatisfaction with Democrats. In 2008, the ABA gave 42 percent of its contributions to Democrats. In the current cycle, that share has fallen to less than 37 percent.
The banking group also gave $300,000 to Republican leadership PACs this cycle, more than twice as much as to their Democratic counterparts. And the ABA has contributed $75,000 to Republican Party committees and $47,500 to Democratic committees.
One of the most recently reported contributions from the bankers was $5,000 in August to Rep. Spencer Bachus (R-Ala.), who could be in line for the chairmanship of the Financial Services Committee if Republicans win control of the House.
Bachus, the panel’s ranking member, has so far this election cycle received $482,400 from the finance and insurance industry. That is $100,000 more than the current chairman, Rep. Barney Frank (D-Mass.), has collected from the sector.
If the GOP wins the House, Bachus may face competition in his bid to be Financial Services chairman from his colleagues on the panel. Some of the potential challengers also have collected substantial contributions from the financial sector. Rep. Scott Garrett (N.J.) has gained $308,000 from the industry, while Rep. Jeb Hensarling (Texas) has received $311,000. Another possible contender, Rep. Ed Royce (Calif.), has netted $392,000.
Despite the vitriol of some industry insiders, not all banking groups are angry at the current Congress.
The Independent Community Bankers of America has favored Democratic contenders so far this cycle with 67 percent of its PAC contributions. That is up from 55 percent in 2008 and 31 percent in the cycle before that.
Steve Verdier, the association’s executive vice president of Congressional relations, said the group was neutral on the Wall Street reform bill but was supportive of a small-business measure recently signed by Obama. That measure included a small-business lending fund that the independent bankers backed.
“It’s not all negative,” Verdier said. He added that even though lawmakers alienated some in the banking community, they were merely listening to their constituents. “The public was not on the side of Goldman Sachs,” he said.