July 28, 2004 – As the 2004 presidential race heats up, Wall Street is behind the scenes quietly sending huge amounts of money to both the incumbent president, Republican George W. Bush, and his Democratic Party challenger, John Kerry.
According to the Center for Responsive Politics (CRP), investment banks, global accounting firms, and "one-stop-shopping" financial services corporations rank among the top contributors to both campaigns.
According to CRP, a foundation- and donor-funded nonprofit group that tracks donations and contributions to politicians, the largest donor to George W. Bushâ€™s 2004 campaign, as of July 8, is investment banking firm Morgan Stanley, which has contributed $557,275. During the 2000 campaign, Bushâ€™s largest contribution was a $240,675 donation from the credit card company MBNA Corporation.
CRP reports that for this election cycle, six of the Bush campaignâ€™s top ten contributing companies were from the financial industry: Merrill Lynch ($520,204), UBS Americas ($431,850), Lehman Brothers ($353,434), Goldman Sachs ($350,875), Credit Suisse First Boston ($303,900), and Bear Stearns ($284,300).
Government and corporate watchdog Public Citizen, a non-profit organization funded by member dues and individual contributions, reports that one of the financial industryâ€™s key legislative priorities is the privatization of Social Security. If the Bush administrationâ€™s plans to overhaul the federal retirement program are successful, investment banks would likely end up managing trillions of dollars in Social Security funds.
Because federal law places caps on individual donations and prohibits corporations and labor unions from directly contributing to federal campaigns, organizations often combine the individual contributions of members or employees and their families in a process known as "bundling."
Other issues, according to Ron Zucker, web publisher for WhiteHouseforSale.org, include pressuring the government to defeat state level protections for small investors in mutual funds and passage of a bankruptcy bill that would make it more difficult to default on credit card payments. Zuckerâ€™s website is a joint project of Public Citizen and the electoral reform advocacy group Texans for Public Justice which tracks presidential campaign contributions.
The Kerry Campaign has also received massive donations from Wall Street. Citigroup, one of the world's largest financial services companies, is number five on John Kerry's top five contributors list, with $157,806 gifted to the Massachusetts senator thus far. This amount is almost $23,000 more than the largest contribution to fellow Democrat Al Gore's 2000 presidential campaign.
Finance and investment industry giants UBS Americas ($157,450), Goldman Sachs ($155,250), Morgan Stanley ($101,954), and JP Morgan Chase ($101,237) have also given substantial amounts to Kerry, making the finance industry one of the largest industry donors to Kerryâ€™s presidential campaign, second only to lawyers.
Steve Weiss, communications director for the Center for Responsive Politics, says these companies are in many ways merely "covering their bases."
"Like any industry, they're looking for access," said Weiss. "They're looking to develop a relationship."
Because federal law places caps on individual donations and prohibits corporations and labor unions from directly contributing to federal campaigns, organizations often combine the individual contributions of members or employees and their families in a process known as "bundling." CRPâ€™s figures are an aggregate of the money donated from a companyâ€™s political action committee, its individual owners, employees, and their families.
The Bush election campaign has been fantastically successful at bundling, leaning heavily on potential contributors to bundle their largesse, and grouping the $100,000 and $200,000 bundlers into two separate categories, "Pioneers" and "Rangers."
The Kerry campaign has been cultivating a number of Democratic-leaning bundlers as well, assigning $50,000 elite contributors the title "co-chair" and the even more elite $100,000 contributor "vice chair." All told, the finance sector has bundled $14 million into Bush campaign coffers, and almost $6.8 million into Kerry's.
"I do not believe individual donors think they're getting anything in return. The $2,000 check maybe got dinner and a photo," Zucker said. "Bundlers know what they're getting: Special access -- access [to] the President, [and to Bushâ€™s chief advisor] Karl Rove."
Even with the pleas for this kind of money being made by the candidates, CRPâ€™s Weiss says it is still no guarantee a contributor may ultimately see a return on this investment. He points out that Bush would have probably pushed for tax cuts, which benefited the Wall Street's securities and investment companies, even without their money.
The links between the heft of a political contribution and policy can nonetheless be startling. According to an August 2003 Public Citizen report entitled "Bullish on Bush," "Ranger" E. Stanley Oâ€™Neal, CEO and chairman of Merrill Lynch; "Pioneer" James Cayne, CEO of Bear and Stearns; and "Pioneer" Thomas A. Renyi, CEO of the Bank of New York, managed to personally save a total of $1.9 million thanks to Bush tax cuts.
Another Public Citizen report from March of 2004, "Bush's Campaign Ads... Brought to You By Special Interests," notes the 2003 round of Bush tax cuts, which significantly reduced taxes on dividends from 38% to 15% and phased out the estate tax, all benefited the securities industry and "Wall Street's richest customers."