Why Wall Street is starving Obama of funds
The big money men are riled by what they see as banker bashing from the President and have switched to his rival Romney, says Nikhil Kumar
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 30 October 2012
Money talks, goes the old cliche, and seldom does it boom more loudly than during the quadrennial battle for the White House. Every donor counts as the candidates scramble to fund their way to (or back to) Pennsylvania Avenue.
Wall Street, with its deep pool of billionaires and millionaires, is a key pit stop. In 2008, it was leaning left. The-then Senator Barack Obama had successfully charmed the sharp-suited throngs of lower Manhattan into backing him, lock, stock and chequebook. Goldman Sachs, no less, was his second-biggest contributor, based on donations from the firm's political action committee and those individual donors who listed the investment bank as their employer, according to the Washington-based Centre for Responsive Politics.
But four years on, riled by what many of them see as excess regulation and banker-bashing rhetoric from the President, Wall Street types have changed their minds and they are voting with their bank accounts.
With less than a week to go until the ballots are cast, donations from the securities and investment sector have netted over $19m (£12m) for Mr Obama's Republican rival, Mitt Romney, who has said he would "repeal ... and replace" the Dodd-Frank financial oversight law backed by the President and so disliked in the high-rises of New York.
Goldman ranks as his top contributor, based on the parameters above, with Bank of America, Morgan Stanley, JPMorgan and Credit Suisse making up the remainder of Mr Romney's top-five backers, according to CRP figures. In total, the finance, insurance and real sectors have contributed nearly $61m to the Republican camp.
Mr Obama, meanwhile, has received just under $6m from the securities and investment sector during the 2012 election cycle. The only vaguely financial name in the top 10 contributors to the Obama side this year is Deloitte, the accountancy firm. Wells Fargo is the lone bank in the top 20.
The trend is repeated in the CRP tally of donations from the hedge fund business and from Mr Romney's former colleagues in private equity. The Republican co-founder of Bain Capital has booked $5.7m in cheques from the two sectors, against $1.3m for Mr Obama.
Rewind to 2008, before the President called bankers "fat cats" who don't get it, and Mr Obama had Wall Street locked up. The securities and investment cabal gave nearly $16m to the Democratic candidate, against $9.2m to Senator John McCain, the Republican standard-bearer. Hedge funds and private equity, meanwhile, backed the soon-to-be President to the tune of $3.47m. Mr McCain, in contrast, received around $2m.
The shift this year matters, given the cost of securing office. By the time this year's race is over, the Obama and Romney campaigns, along with their parties, would have raised around $2bn. And though individual contributions are capped at $2,500 per candidate per election (the primaries and general election are counted separately, adding up to $5,000) and $30,800 per party per year, deep-pocketed donors have, under a 2010 Supreme Court ruling, been funneling millions more to outside groups allied with their preferred politician.
Wall Street's enthusiasm for the Republican ticket was in evidence the other week at a New York cocktail reception with Mr Romney's Vice-Presidential candidate, Paul Ryan. For $1,000 per person, guests from the city's financial elite were invited to hob-nob with one half of the Republican ticket at the Hilton hotel. Another $5,000 bought them a snap with Mr Ryan.
The names of the event's co-chairs was telling. According to The New York Times, the host list featured a number of hedge-fund notables, including John Paulson of Paulson & Co, and senior Blackstone group executives Michael Chase and Prakash Melwani. John Mack, the former boss of Morgan Stanley, was also reported to be on the list, along with ex-Goldman chief John Whitehead.
Not that Mr Obama hasn't tried, despite his commentary on bankers, to win back Wall Street. Earlier this year, for instance, his campaign manager Jim Messina convened some of the finance world's biggest hitters, including Ralph Schlosstein of Evercore Partners and Eric Mindich of Eton Park Capital, to stress that the President was running against Mr Romney, not against the industry, according to Bloomberg reports. But nothing, not the closed-door meetings, nor an array of glittering New York fundraisers, appears to have worked.
As one Mr Obama donor told The New York Times earlier this year: "This administration has a more contemptuous view of big money and of Wall Street than any administration in 40 years. And it shows." Given the numbers, it certainly does.
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