Campaign Contributions

Wall Street's Tea Party

Zach Carter — Thu, 21 Oct 2010 15:33:24 -0400

The Tea Party likes to wrap itself in "grassroots" contempt for wealthy elites, but the 12 leading Tea Party Senate candidates have accepted over $4.6 million in campaign contributions from Wall Street for the upcoming election.

Despite all the Tea Party rhetoric against big, bad bailouts, the leading candidates have had no problem accepting millions of dollars from Big Finance to further their electoral prospects. Every single candidate has taken money from what the Center for Responsive Politics characterizes as the FIRE lobby—finance, insurance and real estate—a category that includes all of the big financial interests who benefited from the Wall Street bailout.

A full tally of Wall Street contributions to the Tea Party's Senate team is below, but some of the Tea Party's biggest figures have been top recipients: Pennsylvania candidate Pat Toomey, Florida hopeful Marco Rubio and Sen. Jim DeMint, R-S.C., have all brought in over $1 million each, while Washington candidate Dino Rossi has pulled in more than $750,000 from Wall Street.

This orgy of Wall Street funding stands in stark contrast to many of the candidates' campaign postures. Toomey, in particular, has been vocal about his supposed outrage over the Wall Street bailout, but didn't mind raking in almost $1.2 million from Wall Street to fund his campaign. Toomey worked in the derivatives business on Wall Street for years before jumping through the revolving door into politics. He even helped write the repeal of Glass-Steagall—one of the landmark acts of financial deregulation that paved the way for the Great Crash of 2008.

Kentucky Tea Partier Rand Paul has an entire section of his website dedicated to bashing bailouts, but he's raked in over $180,000 from Wall Street for this election. After blasting Sen. Bob Bennett, R-Utah, in the Republican primaries for his vote in favor of the Wall Street bailout, Utah Tea Partier Mike Lee accepted over $82,000 from the financial world.

Take a look at the Senate Tea Party's Wall Street haul (click image for larger view):

Other Tea Party candidates openly advertise their willingness to do Wall Street's bidding. Washington Tea Partier Dino Rossi has vowed to appeal the financial reform bill that Congress passed this year, and he has $750,253 worth of reasons to make such a pledge.

Still others blast both "bailouts" and "regulations," while shying away from specific mentions of "Wall Street." Florida's Marco Rubio, Colorado's Ken Buck, West Virginia's John Raese and Delaware's Christine O'Donnell all take this tack. All of them accepted big bucks from Big Finance.

This lack of specificity from high-profile Tea Partiers is astonishing, given the economic significance of Wall Street’s recent excess. Tea Party candidates love to claim that government spending is wasteful while bashing regulation and praising the private sector. But in all of human history, no entity—public or private-- has spent money more wastefully than Wall Street did during the housing bubble. By inflating an $8 trillion housing bubble, Wall Street poured money that could have supported sustainable jobs into a speculative cesspool. When that bubble burst, the economy lost 8 million jobs, and American families were decimated. Deregulation will only make things worse—the sheer lack of regulations in the mortgage market was what allowed Wall Street to wreak havoc over the past decade.

It’s easy for politicians to make vague statements against bailouts. But far more should be expected from serious Senate candidates. Tea Partiers need to specify how they will rein in Wall Street to make sure our economy functions properly. And they need to explain how the $4.6 million they’ve accepted from Wall Street will affect their governing decisions.

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Do Democrats Want Toxic Campaign Cash From Goldman Sachs?

Zach Carter — Tue, 06 Jul 2010 20:46:13 -0400

Heavy-hitting Wall Street political donors are withholding their money from the Democratic Party's campaign coffers, according to a Washington Post report making the rounds on Capitol Hill today. In a political environment in which almost no group is as publicly reviled as a Wall Street executive, Democrats just scored a tremendous public relations coup. Good riddance.

The Post story from this morning reads like a campaign ad for embattled Democrats. After spending more than a year fighting for Wall Street reform, Democrats did such a good job that the bailout barons turned on them—are any Democratic strategists sorry to see that narrative emerge?

For the purposes of this post, set aside the fact that elected officials ought to answer to the public interest, rather than the narrow preferences of entrenched wealthy elites. Politics are still politics, and like it or not, money matters in elections. But the public perception of the current fund-raising situation will play very well for Democrats come election season. No politician likes seeing campaign money walk out the door. But there's one thing they hate even more than losing contributions: Losing elections. Sure, overstuffed campaign coffers make it easier to win in November. But not when the opposition can highlight those contributions as toxic money from corrupt bailouteers.

What are Democrats missing out on? Lloyd Blankfein, CEO of Goldman Sachs, the second-most-hated company in the country, has not contributed his usual $50,000 to the Democratic Party this year. Does anybody in Congress want to pose for a photo-op with Lloyd before November? Maybe give a speech explaining how betting against your own clients is a prime example of doing "God's work"? Of course not. If I were a Democratic strategist, I'd be printing the "Goldman Sachs Hates Democrats" posters right now.

There is, however, a class of politicians from both parties who are sweating bullets as the fund-raising numbers roll in. Everybody who voted against financial reform is starting to realize that they made a big mistake. Wall Street's campaign contributions are weak overall—they're down more for Democrats, but Republicans haven't raised all that much, either. Our economy is still coping with an economic calamity that everyone knows was caused by banker excess and weak regulation. For all but a handful of strident reformists who believe the banking overhaul legislation does not go far enough, all of the bill's opponents were making a naked political bet: The money I get from this vote will matter more to my electoral prospects in November than the damage to my reputation. But now it looks like that bet won't be paying off after all. Politicians who opposed reform not only cast an unpopular vote, they won't be getting their kickbacks, either.

But even if they did get the money, there is only so much they can do. The public outrage against banks is not unique to the progressive left. It's a phenomenon that crosses the ideological spectrum, and has been a major motivation behind much of the Tea Party movement. Sen. Robert Bennett, R-Utah, was a down-the-line conservative who voted in favor of the bank bailout with most of his Senate Republican brethren (and most Senate Democrats). But when primary time came this year, his vote for the banks cost him his seat. Lawmakers from both parties can expect similar treatment from the general electorate this fall.

The activists who turn out the vote during midterm elections are not happy with economic policy that puts bankers and traders first, while leaving jobs and foreclosures out to twist in the wind. That dissatisfaction applies to both traditionally Republican and traditionally Democratic activists. Winning Wall Street cash by capitulating on Wall Street reform is not going to impress voters of any ideological orientation, much less the moderates who are disgusted by the bank bailouts.

Of course, the banking overhaul is unnecessarily weak. It will not prevent another financial meltdown, and it does little to realign the interests of the banking elite with those of society at large. But there's a lesson here, too. The fact that Wall Street is doing its best to punish the Democrats right now shows how silly it is to try and curry favor with corporate interests who wreck the economy.

When you have to reform a broken industry, the executives from that industry are going to cry foul, whatever you do. The trillions of dollars in bailout money that the U.S. government funneled to Wall Street should leave no doubt in anyone's mind that Big Finance is broken—the need for reform is as imperative a policy priority as can be imagined. Watering down the bill, adding loopholes and refusing to consider tough reforms to appease lobbyists ultimately doesn't help much. Top executives will still be angry that you had the audacity to ask them to change something, because they spend their whole lives getting paid a fortune to do whatever they want.

Money is money. It matters in elections, and one would have to be aggressively naïve to believe otherwise. But Wall Street's money only matters to the politicians who made the wrong choice on reform—lawmakers who gambled with the public interest, and deserve to lose. For the rest of the Democrats, Wall Street's reluctance to fork over chests of bailout money should be seen as a political gift, not a setback.

Sallie Mae's Jets: Bank Shills Use "Socialism" Scare to Shaft Students, Serve the Wealthy

Richard Eskow — Mon, 08 Mar 2010 15:42:15 -0500

Two noted shills for the banking industry - Republican Lamar Alexander and Rupert Murdoch's Wall Street Journal - just trotted out the "socialism" boogeyman, so here we go again: another lie, another con, another ripoff. "School loan socialism" is the new Death Panel. But, hey, somebody's gotta keep Sallie Mae's corporate jets flying.

Alexander's op-ed for the Washington Post is a buzzword symphony, a scare-tactic sonata, a cascading chorus of Pavlovian terminology designed to elicit the predictable autonomic response. "Starting in July," he writes, "all 19 million students who want government-backed loans will (cue scary music here) line up at offices designated by the U. S. Education Department." (It's more likely they'll go online to make their selection. But that "lining up" sounds so Stalinist, doesn't it?)

Alexander hammers home the Russian Constructivist imagery: " ...(G)etting your student loan will become about as enjoyable as going to the Department of Motor Vehicles." Leaving aside for a moment the absurd idea that students find loan applications "enjoyable, " here's an editorial note for conservatives: You really need to stop using the DMV as a scary image. I went there recently, and even here in depression-wracked California it works fine. Computerization and modernization have made it easy and convenient. So whenever you guys say "DMV! Scary! Whoo-ooo!" it just confirms the suspicion that you're rich guys who haven't done your own errands for decades.

Not that scare tactics are all Alexander's got to offer. There's also the quasi-pastoral vision of a disappearing nation, to be lamented as freedom dies under the Red fist. "Gone are the days," he writes, "when students and their colleges picked the lender that best fit their needs; instead, a federal bureaucrat will make that choice ..."

I recently helped my son choose an institution for his student loan and, trust me: It's a rat's nest of confusing information, different loan models with no tools for side-by-side comparison, and runaway hucksterism. And my daughter's loan has been passed along from bank to bank at least once and maybe more.

"Picked the lender that best fit their needs"? Most students close their eyes and pray, and then wonder if the lender they choose will still be their lender next year. And how do colleges "pick the lender that best fits their needs"? Greed and graft have played their part on more than one occasion.

Alexander complains about the 4% difference in interest rates between what the Treasury will charge the Education Department and the Department will charge students. He ignores the fact that the President's proposal reduces the maximum amount for repayment from 15% to 10% of income. And his outrage over 4% for the underprivileged doesn't extend to the billions skimmed by bankers without financial risk.

In other words, "socialism" for the rich is fine, but helping middle-class and lower-income kids improve their lives is an outrage. Alexander's position may seem irrational until you consider the fact that, like a number of like-minded Senators, he's received campaign contributions from the very private bankers who interests he so devotedly serves.

Sallie Mae's the poster child for the moral and operational bankruptcy of the 90's privatization craze. Created and funded entirely by the taxpayer, it went private in the late 90's and immediately went on a greed binge. It started throwing mad money at Presidential and Congressional candidates, then kicked in the maximum allowable amount - $250,000 - to George W. Bush's inauguration.

About those jets: We learned that Sallie Mae had at least one when stories came out about Sen. Boehner's golfing trips to Florida on it. (His daughter works there, too; hey, no conflict there, right?) After some Internet digging, I can confirm Internet rumors: It appears Sallie Mae has owned at least two different private jets, as reflected in this summary of corporate flights for Phoenix Airport .

Actual photo of one of Sallie Mae's corporate jets: Model IAI-1125A Astra SPX, registration #N188AK

Jets. Campaign contributions. A quarter of a million dollars for the Bush inauguration. And think of it: All of that came from money intended for student loans.

Alexander tells the story of Edsouth, a nonprofit lender in Tennessee - a touching story, except that nonprofits in the student loan industry are a rarity. In fact, the vast majority of lending takes place through for-profit lenders, of whom Sallie Mae is far and away the largest. And since it is the largest, you'd think its executives - who receive big money and fly around in those corporate jets - must be good at what they do. Instead, mismanagement runs rampant. The company branched out into the hedge fund and derivatives business, as well as some add-on loans for students, and proceeded to lose its shirt. So it's back to basics for Sallie Mae: funding politicians who'll help them keep on milking the American treasury.

Worse, in what amounts to virtual redlining,Sallie Mae used the "subprime" excuse to walk away from the students at traditionally low-income and minority schools - the ones who need loans the most.

The Wall Street Journal echoes Alexander's deceptions and scare tactics in an editorial entitled "That Other Government Takeover," and throws that new four-letter word "reconciliation" for good measure. The WSJ shows a particular tone-deafness in characterizing the government loan system as a "public option," since polls show the public option's popular. And it manages the near-impossible task of making Alexander look subtle, by referring to the government program as a "Soviet-style takeover."

Here's another editorial note: In polite circles the Communists-under-the-bed message is supposed to be more, well, subliminal. Instead the WSJ comes off sounding like a Tea Party bull session on amphetamines. Democrats want to "concentrate power in Washington," it screams, "while they still can"!

Lamar Alexander and Journal owner Rupert Murdoch, on the other hand, want to concentrate power in places where they're more comfortable -- in private jets and corporate suites funded by taxpayer money. And what do they call this high-rolling lifestyle on the taxpayer's dime?

Why, the free market, of course.

In the Gritty World of Campaign Fundraising, The Power of Positive Progressivism

Richard Eskow — Thu, 11 Feb 2010 15:58:39 -0500

Let's have a frank talk about an uncomfortable subject: Progressives need to raise campaign money in order to get elected and stay in office. Sometimes that money has to come from places that progressives aren't comfortable talking about. This gritty reality has too often led to the conclusion that the Left needs to bow down to Wall Street in order to succeed.

It's a Washington truism. But is it true?

Progressives in Washington have been lectured in a condescending tone countless times: You crazy hippies don't understand how hard it is to raise money and succeed in politics nowadays. Consider the House Financial Services Committee. It costs a lot to run for Congress, so it's expected that members of a committee like this one will stay friendly with the businesses they regulate. How else can they raise the cash they need for re-election? Members on both sides of the aisle are able to draw in hundreds of thousands of dollars by staying bank-friendly, even in an off-election year.

It may not look pretty, insiders will tell you, but that's how the game is played. So guess which Committee member raked in the most campaign contributions in 2009?

Alan Grayson.

That would be the same Alan Grayson who has infuriated bankers with his aggressive stance, the same Alan Grayson who has pushed to "unmask the Fed" and insisted that Ben Bernanke "come clean" about which institutions received bailout money, the same Alan Grayson who said the voting on his bill to tax bonuses for bailout recipients will show which Republicans are "on the take."

Grayson's aggressive, in-your-face style makes a lot of other Democrats uncomfortable. In the gentleman-and-ladies-don't-perspire-they-glow world of Washington, he's not afraid to show some sweat. But this is more about substance than style. Grayson's been able to leverage a populist, anti-corporate style into a campaign money machine that outstrips that of his Wall Street-compliant colleagues. Is there a model there for other progressives?

Some will say the Grayson phenomenon can't be replicated. He's become a magnet for progressive fundraising, drawing cash from all over the country. If there were a hundred Alan Graysons, each wouldn't be able to draw as much in contributions. Now that the Supreme Court's Citizens United ruling has completely unshackled the political buying power of the corporate dollar, they'll say, Democrats can't win without bank-friendly policies. But is that true?

Consider this: However much liberals want those Wall Street dollars, they'll never be able to do it on policy alone. Right-wingers will always win on that score. But it's important to remember that Wall Street campaign money isn't brave money. It's hedge-your-bet money. The reason Democrats got so much last year is because Wall Street knew they were going to win. So think of the progressive fundraising stance toward Wall Street as embodying four simple principles:

1. Banker contributions will go where the winners are.
2. Popular sentiment is very anti-bank right now.
3. Politicians who want to rein in bankers' excesses will be popular.
4. Popular politicians will draw votes -- and bankers' money.

And bankers aren't the only ones with cash right now. When it comes to big campaign dollars, the Supreme Court ruling left one other player on the field: Unions. Progressives are going to find it hard to court banker bucks with pro-Wall Street policies and also get the union donations and grassroots support they'll need to keep winning elections.

And there's small business, too: While smaller companies can't contribute the sheer volume of dollars larger ones can, in total they represent a sizable chunk of change. A better-regulated Wall Street will mean more credit for these kinds of businesses, and that in turn could free up more campaign cash for those who push smarter banking policy.

Sen. Sherrod Brown understands the need for more credit to small businesses. As he said this week, ""What I hear now is consistently about credit. It's always about credit. (Businesses) tell me they have the capacity to grow, they tell me they have new customers and the old customers are coming back. They'd like to know what we're doing on the health bill, of course, but I don't think that's stopping companies from moving forward with what they need to do if they could get credit."

Sen. Brown has introduced a bill to use $30 billion in TARP repayments to free more loans to small businesses, and another one to raise taxes on bonuses paid by companies that received TARP funding.

Sherrod Brown is on to something. These proposals aren't just smart policy - they're smart politics. They could lead to increased voter support and new sources of campaign contributions. Those who oppose these measure could face a backlash from angry voters who wonder why they're not doing a better job stewarding taxpayer money, and why they're so "anti-business" that they won't help companies get back on their feet - which would lead to more hiring.

There is a way out for elected progressives - a way to do the right thing and enhance, not endanger, their chances of re-election. But it will take a little courage, and the willingness to step out of their comfort zones. Hopefully Rep. Grayson and Sen. Brown - two leaders with very different styles but similar strategies - will lead the way for others to follow.

This post was produced as part of the Curbing Wall Street project.