Fat Cats and Strange Bedfellows

by Ryan Caione, January 10th, 2008, 6:27 am

We’ve got the first caucus in pocket and a primary in the books. With the presidential election season kicking into high gear, it’s apropos to see who among banks and financial services firms are providing fuel for the campaigns, since many of the top contributors to both parties come from these sectors.

(Full disclosure: Most of this information comes from the Center for Responsive Politics via its opensecrets.org Web site. For brevity’s sake I am mentioning companies by name, though campaign contributions did not come directly from these firms, but rather from political action committees (PACs) representing them, from their owners or employees, or from other individuals connected with them.)

Democrat Hillary Clinton leads all candidates in fundraising; she has also received the most money from commercial banks and securities and investment firms. Goldman Sachs, Morgan Stanley, and Citigroup represent three of the four largest donors to her coffers. Financial services firms have also enriched her Democratic opponent, Barack Obama, who is second in fundraising overall but defeated Clinton in the Iowa caucus. Goldman Sachs is his largest campaign contributor, followed by Switzerland-based UBS (when coupled with its US unit UBS Americas) and Lehman Brothers.

Goldman Sachs has historically been the leading campaign donor among financial services concerns for all political races. Belying its stodgy upper-crust reputation, however, most of the contributions from folks associated with the company have been to the Democratic Party, perhaps taking a cue from former CEO Jon Corzine, who was a Democratic Senator from New Jersey and is currently that state’s governor. So far more than 600 individuals who identify themselves as employees of the firm have contributed to 2008 presidential campaigns of both parties, including current chairman and CEO Lloyd Blankfein, who has given money to both Clinton and Chris Dodd.

Why Chris Dodd? He’s the senior Senator from Connecticut who was somewhat of an afterthought in the race for the Democratic Party nomination even before he dropped out after Iowa. But he is also the current chairman of the Senate banking, housing, and urban affairs committee. All but one of his top 20 presidential campaign contributors are banking, finance, and insurance firms, led by heavies such as Citigroup, Royal Bank of Scotland, Bear Stearns, and Goldman Sachs, as well as more obscure firms like Taconic Investment Partners and SAC Capital Advisors, the secretive hedge fund firm led by Stevie Cohen.

Speaking of hedge funds, Republican Rudy Giuliani has received the most donations from that sector, followed closely by Clinton, Obama, leading Republican fundraiser Mitt Romney, and Dodd. Goldman Sachs, Merrill Lynch, Bain Capital, and Morgan Stanley are among Romney’s top five campaign contributors.

Mike Huckabee, who won the Republican caucus in Iowa despite raising less money than five of his fellow party members, is less reliant on election funds from financial services firms, though investment bank Stephens, based in his home state of Arkansas, is the largest contributor to his presidential bid. John McCain, the Republican winner in the New Hampshire primary, has received more than $100,000 apiece from Merrill Lynch and Citigroup.

Of course, none of these rankings are final as money keeps pouring into campaigns. Year-end campaign fundraising reports are due to the Federal Election Commission by the end of this month.