How Wall Street Spun the Press on Campaign Donations to Dems

February 09, 2010 | Last updated: July 31, 2020

If you read the stories in The Wall Street Journal last week or The New York Times this week about campaign contributions from financial companies, you might have the impression that financial PACs and executives are shifting their money from Democrats to Republicans en masse over bonus restrictions, new regulations and the proposed big bank tax. That’s exactly the impression that Wall Street and the Republican Party want you to have — but it turns out it’s not true.

House Minority Leader John Boehner (R-Ohio) got the ball rolling last week when he leaked to the Journal that he’d met with J.P. Morgan Chase CEO and Chairman (and big Democratic donor) Jamie Dimon about donating to Republicans; Dimon refused to comment. The Times picked up the gauntlet this week, quoting the BB&T CEO Kelly King — a board member of the Financial Services Roundtable:

“If the president doesn’t become a little more balanced and centrist in his approach, then he will likely lose that support [of financial companies].”

Interestingly, according to campaign finance records, King has donated exclusively to Republican candidates, and BB&T’s PAC has historically weighted its contributions in favor of Republican candidates regardless of the party in control. It sounds like a guy who doesn’t even donate to Democrats is trying to shake them down for concessions on financial market reforms based on their desire for campaign contributions — and reporters are lapping it up.

But is it true that financial companies are switching their campaign contribution allegiance to Republicans in 2010? The first (and only) concrete example offered of a company doing this is Bank of America, according to the Journal.

Through the first nine months of 2009, about 54% of donations from Bank of America Corp.’s political action committee and employees went to Republicans, according to campaign-finance data compiled by the nonpartisan Center for Responsive Politics. That was a switch from the 2008 campaign, when 56% of the company’s donations went to Democrats.

That’s true, but it’s only half of the picture. Bank of America actually operates two PACs: one out of Washington, and one out of Delaware. In 2008, the D.C.-based PAC gave 55 percent of its congressional race donations to Democrats, but 54 percent of its Senate donations to Republicans; the Delaware-based PAC split its donations to candidates down the middle, but gave 58 percent of its PAC-to-PAC expenditures to Republican causes. Overall, the $50,000 extra that the D.C.-based PAC gave to Democratic Congressional candidates was outweighed by the $87,000 extra the Delaware-based PAC gave to Republican causes.

In the 2010 cycle so far, the D.C. PAC has given 53 percent of its Congressional contributions to Republicans and 91 percent of its Senate contributions to Republicans, and the Delaware PAC gave just over two-thirds of its contributions to Republicans PACs. It’s a movement away from Democrats, but the cycle is far from over — in fact, given that it’s still primary season for contributions, it’s barely begun — and the numbers show that the Bank of America was hardly some great supporter of Democrats during the best of times. Like many other companies, what loyalty it showed to Democrats in 2008 was solely loyalty to House Democrats, not to the party overall.

The story holds true for many other major banks: Supposedly staunchly Democratic firm J.P. Morgan has a similar dual-PAC structure, and the majority of its contributions went to Republican candidates in 2008, and weren’t outweighed by the minor advantage held by Democrats in its PAC-to-PAC contributions in 2008 — nor were its second PAC’s small contributions to candidates strongly in favor of Democrats. While its PAC-to-PAC contributions in 2010 are heavily in favor of Republicans so far, its contributions to candidates are running fairly even — and the PACs have allocated less than a quarter of the 2008 cycle contributions despite strong fundraising. Dimon himself has yet to donate to a single Republican candidate in 2010.

Goldman Sachs, everyone’s favorite punching bag, hasn’t donated to a single Republican senator for 2010, and its contributions to Democratic House candidates far outpace those to Republicans. The Times** says that UBS’s PAC is donating mostly to Republican candidates because of its strong support for Senate Republicans; but UBS’s donations to Democratic House members are besting those to Republicans, which is the very reason why its 2008 donations favored Democrats in the first place. The embattled AIG is one of the few companies whose donations to Democratic senators outpaced those to Republicans in 2008; that continues in 2010.

In fact, according to the Center for Responsive Politics, the PAC donations by finance, insurance and real estate companies have turned in favor of Democrats in 2010 as compared to 2008, spurred by a reversal of fortune for Republicans among commercial banks and insurance companies as well as gains for Democrats among savings and loan companies and security and investment companies. It seems a lot like the real story is that Republicans are trying to claw back a trend away from donating to Republicans in 2010, rather than spurring any movement away from the Democrats. But that would take some number crunching to figure out, rather than relying on whispers from Boehner’s office or statements from Republican bankers.