Wall Street's political cash favors Democrats By Tim McLaughlin
Fri Oct 6, 11:19 AM ET
Wall Street has shifted its allegiance in the 2006 election cycle by donating more to Democrats than Republicans who have been the investment banks' usual benefactors, U.S. Federal Election Commission data show.
Five leading firms Goldman Sachs Group Inc., Bear Stearns Companies Inc.,Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. have contributed $6.2 million so far to candidates before the November elections, with about 52 percent going to Democrats.
"People give ideological money and they give money to people they think are going to win," said Maurice Carroll, director of Quinnipiac University's Polling Institute in Hamden, Connecticut. "It looks like it's going to be a good year for Democrats."
Despite being awash in record profits, Wall Street executives, investment bankers, brokers and traders may be getting weary of Republican control, Carroll said. President George W. Bush's polling numbers are low and growing violence in Iraq also weighs heavy on Republican leadership, he said.
Meredith McGehee, policy director at The Campaign Legal Center, said Wall Street also may be concerned about the U.S. deficit, which has ballooned during the Bush administration.
"The last time the deficit was under control was under the Democrats," McGehee said.
Still, it's unlikely Wall Street would embrace higher taxes, a move some Democrats favor to cut the deficit.
The 2006 election cycle that began January 1, 2005, marks the first time in a dozen years that securities firms' donations have skewed leftward, according to analysis by the Center for Responsive Politics, a nonpartisan group that tracks political contributions.
Democrats have received $23.8 million from Wall Street compared to $21.7 million for Republicans. Over the previous five election cycles, Republicans captured 52 to 58 percent of the industry's political donations.
About 80 percent of the contributions from the industry comes from employees. The rest comes from political action committees, which remain loyal to Republicans for lowering tax rates on dividends and capital gains, for example.
LONGTIME TIES TO WASHINGTON
Goldman Sachs, a firm with longtime ties to Washington, has contributed $2.6 million, the most in the industry, through its employees and its political action committee. Democrats have received 60 percent of that money, reflecting a trend that dates to at least 1990.
Morgan Stanley ranks second with $1.6 million in contributions, with 52 percent going to Republicans, according to the Center for Responsive Politics.
The shift in overall contributions to Democrats reflects allegiance to New York's powerful Democratic senators, Hillary Clinton and Chuck Schumer, analysts said. Clinton, seen as a leading candidate for the White House in 2008, is the biggest beneficiary, receiving $1.1 million during the 2006 election cycle.
As chairman of the Democratic Senatorial Campaign Committee (DSCC), Schumer is using his home field advantage on Wall Street to outflank Republican fund-raisers. The DSCC, which wants to regain control of the senate, has raised $81.3 million compared to $69.2 million by the National Republican Campaign Committee.
For example, Lloyd Blankfein, Goldman's new chairman and chief executive, gave $25,000 to the DSCC. His predecessor, Henry Paulson, was a major Republican donor while at the firm before becoming Bush's treasury secretary.
RAISING MONEY EASILY
The industry has contributed $6.2 million to the DSCC, compared to only $2.6 million for the Republican's national committee. Schumer might easily raise money on Wall Street because he is a member of the Senate banking committee and chairman of the economic policy subcommittee.
"People from all walks of life -- including those in the finance world -- are tired of the Bush administration's inept management of the government and are looking to the Democrats to restore some accountability to Washington," DSCC spokesman Phil Singer said.
The National Republican Senatorial Committee wasn't available for comment.
One of Wall Street's leading political action committees, however, isn't tired of Republican candidates.
The Securities Industry Association, which represents Wall Street in Washington, gives more to Republicans because traditionally they're more likely to support the industry's agenda, such as in 2003 when the maximum tax rate on capital gains and dividends was lowered to 15 percent. |
