Wall Street is betting on Democrats

Discussion in 'Politics' started by a529612, Oct 6, 2006.

  1. REUTERS Wall Street's political cash favors Democrats [GLBWWFP]

    By Tim McLaughlin

    ST. LOUIS, Oct 6 (Reuters) - 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. <GS.N>, Bear
    Stearns Companies Inc. <BSC.N>,Morgan Stanley <MS.N>, Merrill
    Lynch & Co. <MER.N> and Lehman Brothers Holdings Inc. <LEH.N>
    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 Jan. 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

    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.


    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

    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

    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.


    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.