Big Banks Have Picked Their Candidate, And It’s Romney

Published on

CHARLOTTE, N.C. — The country's biggest banks are overwhelmingly supporting Mitt Romney's bid for the Republican presidential nomination, an analysis of federal campaign contributions shows.

Employees at the five largest U.S. banks by assets, including Bank of America Corp. and Wells Fargo & Co., had given Romney about $600,000 through the first three quarters of 2011, according to the most recent filings available from the Federal Election Commission.

The second-largest recipient of bank employee contributions, President Barack Obama, had far less, about $200,000, the analysis showed. The Republican presidential hopeful with the second-highest total, former Minnesota Gov. Tim Pawlenty, dropped out of the race in mid-August.

Romney received more from employees of those top five banks than all the other candidates combined, helping make the former Massachusetts governor the best-financed candidate in the Republican nomination battle, which is heating up in South Carolina ahead of Saturday's primary.

The contributions are the tip of what observers say will be the most expensive presidential race on record, and the first in which corporations are not limited in what they can spend.

Big banks have long been among the top givers to political campaigns. Part of what's behind this year's spending is the debate over regulating the financial sector, which is driving money to Republican candidates for president and Congress.

Charlotte-based Bank of America's employees and PACs have given more than $1 million to candidates for president and Congress this cycle, according to the latest data from the research group Center for Responsive Politics. That's half of what peer Goldman Sachs has donated so far.

The commercial banking industry as a whole has donated more than $10 million, the center's data show. The entire finance, insurance and real estate sector is the top political giver this election cycle, with more than $135 million so far.

"The financial sector at large is continuing to be the largest sector in terms of campaign contributions and trying to influence policy through political money," said David Donnelly, national campaigns director at Public Campaign, an organization that pushes for campaign reform. "Even as the economy is not doing so well, campaign contributions from the banking sector seem to be increasing."

To be sure, more money could flow to Obama and Democratic congressional candidates once the hard-fought GOP presidential primary is over. But at this point, Republicans have the edge in donations from bankers.

Donations from commercial bank employees and PACs to Republican candidates for president and Congress made up 68 percent of the total so far. Should that pattern continue, it would mark the most skewed to one party the spending has been in more than two decades. For all of the 2008 cycle, bankers gave 52 percent of their money to Republicans.

The donations have occurred amid debate over banking regulations and the implementation – or possible ultimate repeal – of the Dodd-Frank financial reform law passed in summer 2010. Its provisions range from capping the swipe fees banks can charge merchants on debit card transactions to creation of a new regulatory agency, the Consumer Financial Protection Bureau.

Banks also were on pace to spend more than ever before on lobbying to try to weaken or repeal those regulations through the first three quarters of 2011.

"We've seen a massive shift from Obama to the Republican candidates on the part of the financial industry," said Carmen Balber of Consumer Watchdog, a California nonprofit that advocates for taxpayers and consumers. "Obviously, part of that has to do with a competitive primary. But we've definitely seen the financial services industry publicly chastise the president for going after financial reform."

Romney has vowed to repeal Dodd-Frank, though he has said there are certain parts of it he supports, such as regulating complex financial instruments called derivatives.

It's not just his policy on regulation that draws bankers to him, observers say. As the former head of Bain Capital, another top financial industry political donor, he comes from their world. Romney says his business acumen is one reason he's best suited to lead the country.

"Romney really is the candidate of Wall Street," Donnelly said. "He's the most comfortable in the board rooms of any of those."

In Congress, commercial bank employees and PACs have given $5.4 million to Republican candidates, while giving $2.4 million to Democrats, according to the latest data from the Center for Responsive Politics. That's a 69 percent edge to Republicans so far.

"They have really shifted their giving to Republicans more so than in previous cycles," Donnelly said. "There hasn't been a huge amount of difference between Republicans and Democrats on financial deregulation in the past. Now there is."

The influence of deep-pocketed donors is under particular scrutiny this year with the growing influence of super PACs. Those organizations can accept unlimited contributions from corporations or individuals so long as they do not coordinate directly with a candidate.

They were created after the landmark Citizens United case in 2010, in which the U.S. Supreme Court ruled that campaign contributions are political speech protected by the Constitution.

Although corporate contributions to individual candidates are still barred by law and giving from a bank's traditional PAC is still capped at $5,000 per candidate each election cycle, super PACs offer companies an avenue to influence an election more than ever before.

But companies, banks in particular, have been hesitant to wade in quite yet. Still, many super PACs have yet to disclose their donors.

"I think corporations are somewhat reluctant to give directly to these groups or spend directly for ads themselves," said Viveca Novak, communications director of the Center for Responsive Politics. "They risk offending the other side. That's not good PR for the company."

Wells Fargo policy prohibits contributing company money to candidate committees or independent expenditure organizations, a group that includes super PACs. A spokesman said the company has "affirmed" that policy this year and will not donate to super PACs.

Bank of America's corporate policy states that the company does make donations to non-candidate organizations in "appropriate circumstances."

In 2010, Bank of America donated $405,000 to a number of Democratic and Republican legislative, governors and attorneys general associations, including campaign committees.

Bank of America did not respond to inquiries about whether it would contribute to super PACs this year. Observers generally agree that banks are unlikely to pour money into those groups.

"Brand-sensitive companies would be very cautious about their executives or the companies themselves giving in any disclosed manner," Donnelly said. "They will probably co-host events and raise money from their colleagues, but as far as pouring millions of dollars into outside groups, I don't know if that will happen."

But with the stakes so high, some consumer advocates believe the financial services field will take advantage of the unshackling afforded by Citizens United.

"We have no doubt that the industry will wade in significantly once the players are set," Balber said.

The influence of corporate money has long been decried by consumer advocates, and giving from banks even more so in the wake of the financial meltdown.

The final report from the Financial Crisis Inquiry Commission cited the fact that between 1999 and 2008, the financial sector spent more than $1 billion on campaigns as a factor.

"What troubled us was the extent to which the nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability," the report reads.

Some shareholders, too, question the practice because of its riskiness.

Yes, a company might make the regulatory landscape more appealing, but it could also become the target of boycotts and outcry, as Target Corp. did in 2010 when it gave to a political organization that contributed to a gubernatorial candidate who opposed same-sex marriage.

"The reputational risk and potential gain are disproportionate to the amount of money that is spent," said Jon Lukomnik, executive director of the IRRC Institute, which advocates for shareholders. "It is what I'd call high impact, high risk spending."

Lukomnik said there might ultimately be backlash among company executives that leads to diminished political giving.

But don't count on it this year, he said.

Bank employees' donations to presidential candidates For the first three
quarters of 2011, employees at the five largest U.S. banks gave more to
MittRomney than to all the other candidates combined.

Candidate  —  Bank of America  —  Wells Fargo  —  JPMorgan Chase  —  Citigroup — Goldman Sachs — Total

Mitt Romney       $103,385             $53,760             $90,150               $55,155       $295,205         $597,655

Barack Obama     $39,927             $35,027             $46,848               $39,274         $43,886         $204,962

Tim Pawlenty         $7,750              $20,250            $16,500                 $5,000          $22,500          $72,000

Rick Perry             $5,600                $6,500             $19,750                 $2,500           $5,500           $39,850

Ron Paul               $6,917                $6,224               $5,979                $1,808            $2,500           $23,428

Jon Huntsman       $2,750                  $500               $6,500                 $1,000            $6,250          $17,000

Herman Cain         $1,000               $5,463                   $0                    $1,565               $0                $8,028

Newt Gingrich          $250                $3,500                  $0                        $0                  $0                $3,750

Michele Bachmann  $450                $1,200                  $0                    $1,000               $0                $2,650

Rick Santorum          $0                   $1,000                  $0                        $0                  $0                $1,000

Total                 $168,029             $133,424        $185,727              $107,302         $375,841        $970,323

Source: Federal Election Commission data, based on "Employer" field on disclosure forms

Contact the author at: 704-358-5235

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases