The captains of Wall Street have picked a presidential candidate for this year and it is Republican Mitt Romney, rather than US President Barack Obama, campaign donation records show.
The records released on Tuesday by the US Federal Election Commission illustrate a basic shift in political giving at the presidential level by the nation’s financial elite.
After a fling with Obama — the charismatic Democrat embraced four years ago during the severe credit crisis that erupted under then US-president George W. Bush — Wall Street is backing Romney in a return to its largely Republican inclinations.
Romney’s six largest campaign contribution sources last year were executives, family members and affiliated political action committees of Goldman Sachs, JPMorgan Chase, Morgan Stanley, Credit Suisse, Citigroup and Bank of America, according to the Center for Responsive Politics, a Washington-based group that monitors campaign finances.
The center said that the leaders of the six Wall Street giants — which were rescued from ruin by US taxpayers about three years ago — have given US$1.8 million to the Romney campaign.
As for Obama, Goldman Sachs was the sole major financial firm ranked among his top 20 contribution sources for last year, with gifts of just US$64,000 compared with US$496,000 to Romney.
As they line up behind Romney, banks and investment firms are being joined by a new generation of hedge fund and private equity managers with deep pockets.
They are backing the candidate who comes from their ranks — Romney, a former private equity executive.
“The financial industry has preferred Romney from the beginning when he started his campaign,” said Viveca Novak, spokesperson for the center. “He is of their world. They believe he understands them. So, not suprising they would favor him.”
Newt Gingrich, Rick Santorum and Representative Ron Paul, the other three Republican presidential contenders, have received very limited support from the financial sector.
As usual, the finance/insurance/real estate sector is leading all others on the campaign donors list, the center said.
Even after the 2008 financial crisis and the 2010 passage of the Dodd-Frank laws that put new restrictions on the banks and markets, “the power of Wall Street in Washington is unmitigated,” said Richard Parker, a public policy lecturer at Harvard University’s Kennedy School of Government.
The sector had donated more than US$23 million to presidential campaigns as of Dec. 5, the center said. And there are nine months to go before the elections for president and Congress.
Wall Street money, like funds from other walks of life, is pouring in both as traditional campaign donations, which are limited to US$2,500 per donor, and as unlimited gifts to Super PACs.
The Super PACs are the legacy of a 2010 Supreme Court decision that unlimited donations by individuals, corporations and unions to groups that operate independently from campaigns.
Working through Super PACs, a few wealthy managers of top hedge funds and private equity firms are pumping money into the political process at unprecedented levels.
Seven of them have given more than US$5 million combined to Restore Our Future, a Super PAC that backs Romney. That was more than Obama’s Super PAC, called Priorities USA, raised in all of last year. Priorities USA’s donor list is topped by labor unions.