WASHINGTON (Reuters) - Democrats and Republicans in the U.S. Congress may want to look tough on financial reform in front of voters but that has not stopped them from filling their re-election war chests with plenty of Wall Street cash.
The political action committees of six Wall Street banks spent the first quarter of 2010 giving handsome donations to Republicans and Democrats who are critical to passing legislation that could determine the future of the U.S. financial sector.
The banks — JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs — gave about $106,000 to 12 members of the Senate and House of Representatives who sit either in leadership positions or on the committees that forged the measures.
The sum is 40 percent of the $272,000 that the same institutions donated overall to political campaigns and committees between January and March.
But it is only a tiny fraction of the more than $30 million that has flowed into campaign coffers from the PACs and employees of banks, securities firms and finance companies since the 2010 election cycle began on January 1, 2009, according to the Center for Responsive Politics, the non-partisan watchdog that tracks the role of money in U.S. politics.
Wall Street lobbyists this year have hosted fundraising events for at least 10 senators who sit on the banking and agriculture committees, which have advanced separate pieces of financial regulatory legislation, according to the Sunlight Foundation, another money in politics watchdog.
Senator Blanche Lincoln, chairwoman of the agriculture panel, decided to stop accepting contributions from Goldman’s PAC and employees now that the Securities and Exchange Commission has charged the firm with civil fraud, allegations Goldman denies.
But she already has plenty of money from the financial sector. The Democrat has received $7,000 from the Goldman PAC during the current campaign, part of $920,935 that has flowed into her re-election coffers from securities and other financial institution PACs and employees.
“The contributions have no impact on Senator Lincoln’s public policy decisions,” Lincoln’s campaign said in a statement.
Wall Street has maintained a long and robust relationship with Washington decision-makers over the years, providing nearly $1 billion in campaign funds since 1990 and millions of dollars more on behind-the-scenes lobbying.
Analysts say big spending in Washington helps explain the evolution of the financial regulatory reform debate in the Senate, from harder-edged Democratic proposals last year to modifications that seem headed for a bipartisan deal with Republicans.
President Barack Obama, who counted four Wall Street firms including Goldman Sachs among his top 2008 contributors, told an audience including Wall Street executives that regulation is necessary despite the industry’s “furious efforts” to lobby against it. A vote to open debate in the Senate on reform legislation is set for Monday.
“They’re going to get a bill. The question is how rigorous, and it looks like it’ll be a bipartisan bill that doesn’t go after the industry like the original drafts. Wall Street’s winning that way,” said James Thurber of American University’s Center for Congressional and Presidential Studies.
Bill Allison of the Sunlight Foundation said: “It’s hard to be tough on somebody you’re taking money from.”
The biggest financial sector beneficiary in the current election cycle is Democratic Senator Charles Schumer of New York, who has received $1.6 million from securities firms and commercial banks, according to the Center for Responsive Politics.
Close behind are Senate Minority Leader Mitch McConnell with $1.5 million and fellow Republican Senator Bob Corker, who broke party ranks to open reform talks with the Democratic chairman of the Senate Banking Committee, Christopher Dodd. Corker raised $1.4 million from financial sources.
Other big Wall Street recipients are Senate Democratic leader Harry Reid with $920,000 and Senator Richard Shelby, the ranking Republican on Dodd’s committee, with just over $800,000.
Editing by Eric Beech