Senate Democrats who helped roll back Obama-era financial regulations make up most of the top recipients of Wall Street donations this election cycle, according to a Truthout analysis of data from the Center for Responsive Politics.
Wall Street donors have been lavishing the Democrats in the Senate with far more money than their GOP colleagues. The top six recipients (and nine of the top 10) of Wall Street money in 2018 among senators are Democrats. Of the top 20 Senate candidates to receive donations from Wall Street this cycle, 17 are Democrats, up from six in the last midterm in 2014, and five in 2016.
The average amount collected by Senate Democrats is $895,000 vs. $368,000 for Republicans. Wall Street has donated nearly $43 million to Senate Democrats, compared with only $19 million for Republicans — a noticeable departure from typical election years, where (with one exception) donations are about even or trend Republican.
“Wall Street acts in its self-interest. [Donors] want to be friendly with whoever gets the gavel,” said Aaron Scherb, legislative director of Common Cause, in an interview with Truthout. “There are a lot of Democratic incumbents and incumbents usually win.”
There are several variables that can account for these trends, some more sinister than others: Democrats are defending many more seats and incumbents have a large financial advantage. Democrats also have been aggressive and successful in their fundraising. Further, Wall Street is actually a little skittish about Trump: They support most of his agenda on taxes, but fear his unpredictability, complete disregard for presidential norms and his advocacy for tariffs. Many want to elect Democrats to “serve as a check” on Trump, as one Democratic fundraiser told The New York Times.
One trend that should not be ignored is that the Democrats who are getting the most money are, by and large, the ones who have embraced the Wall Street agenda during the first two years of Trump’s presidency. Seventeen Democrats helped repeal portions of Obama-era Dodd-Frank legislation by voting with Republicans on the Economic Growth, Regulatory Relief, and Consumer Protection bill (hereafter “Dodd-Frank repeal”).
(Note: Sen. Angus King of Maine is an independent who caucuses with the Democrats. He is counted as a Democrat in this analysis)
Nine Democrats also crossed party lines to appoint Goldman Sach’s bailout attorney Jay Clayton to lead the Securities and Exchange Commission. This was despite opposition from most Democrats who lamented his connection to Goldman, whose exploitation of the 2008 economic crisis is infamous. Sen. Bernie Sanders, one of 37 Senators to oppose his confirmation, said he “embodies the greed that nearly wrecked our economy.”
Jay Clayton embodies the greed that nearly wrecked our economy. We need a SEC chair who’ll confront the system—not someone who’s part of it.
— Bernie Sanders (@SenSanders) May 2, 2017
The party’s dependence on Wall Street money is not new, although it is increasingly pervasive. This ongoing and growing relationship between the party and private capital raises important questions about electoral strategy, the direction of the party (especially as social democrats attempt to wrest control of it from the establishment), and the increasingly troublesome role of money in politics.
While the mainstream media do cover fundraising, they often do it to gauge a candidate’s chances. The potential impacts of political donations on policymaking are rarely discussed on cable television. These media companies themselves are owned by parent companies that benefit dramatically from this influx of cash as well — to buy influence and profit off record-breaking political advertising spending. In March, Sen. Bernie Sanders wrote an op-ed for the Guardian making a similar point:
How often has ABC, CBS or NBC discussed the role that the Koch brothers and other billionaires play in creating a political system which allows the rich and the powerful to significantly control elections and the legislative process in Congress? Sadly, the answer to these questions is: almost never. The corporate media has failed to let the American people fully understand the economic forces shaping their lives…
Wall Street’s Allies in the Democratic Party
After his inauguration, Trump promised to “do a big number” on Dodd-Frank, the law passed by Obama and the 1111th Congress in response to the economic crisis of 2008. The law attempted to lessen the amount of risk banks could take, and created the Consumer Financial Protection Bureau, which is supposed to protect consumers from the products of finance, an industry fraught with bad-faith lending.
In May, Congress passed the Dodd-Frank repeal and did so with the help of 17 Senate Democrats. These “moderate” Democrats were thanked for this in ads from groups like the Koch-funded Americans for Prosperity.
Citigroup, as The Intercept reported, was especially active in lobbying for the bill. Heitkamp of North Dakota received more money from Citigroup than any other Senator, followed closely by Debbie Stabenow of Michigan, both of whom voted for the repeal.
In fact, many of these Democrats did not just vote for the repeal but promoted it as a victory for bipartisanship and consumers. Sen. Heidi Heitkamp was a co-author of this bill and stood next to Trump at the signing ceremony. Heitkamp has received about $2.3 million from the industry, the fifth most of all senators, according to the Center for Responsive Politics.
So proud of her role in the bill, she retweeted and republished The Wall Street Journal’s article praising the “roll back” of banking regulations as a victory for Trump and community banks.
Another name that appears at or near the top of nearly every sector in the finance industry – hedge funds, commercial banking, securities — is Claire McCaskill, a two-term senator from Missouri. She has received $4.3 million (and counting) from stock-jobbers, hedge funds, commercial banks — more than any member of (or candidate for) Congress. Her fundraising is outpacing that of her opponent in the tight Senate race in Missouri.
McCaskill voted for the Dodd-Frank repeal and was one of 10 Democrats to confirm Clayton. McCaskill released a press release saying she “helped shape” the financial repeal bill, selling the Dodd-Frank repeal vote as a win for consumers
Sen. Jon Tester of Montana is the third highest recipient of industry dollars. Goldman Sachs has given more to him than any other candidate this cycle. He also voted in lockstep with Trump and Wall Street on numerous occasions, including on the Dodd-Frank repeal and to confirm Clayton. He was rewarded for his loyalty by the American Bankers Association and the Montana Bankers Association, which together produced an ad to support his campaign.
These are just three examples of Democrats getting uncomfortably close with titans of private capital. The problem is an institutional one, however. The Democratic Senatorial Campaign Committee, for instance, has raised money from financial interests such as the Mortgage Bankers Association, the National Association of Realtors, Experian, Navient, National Venture Capital Association, Morgan Stanley and Goldman Sachs.
Among those 17 Democrats who voted to repeal Dodd-Frank, the average amount of Wall Street contributions is (as of data available on November 1, 2018) about $1.4 million, substantially more than the average Democrat ($944,500) and many times more than the average Senate Republican ($377,000). Of the 13 co-sponsors, the average is about $1.5 million.
Among the 10 Democrats who voted to confirm Jay Clayton, the Goldman bailout lawyer who Trump appointed to the Securities and Exchange Commission, the average was $1.6 million. Not a single Democrat who voted for Clayton voted against the financial regulation rollback, further demonstrating how aligned this sect of the party is on finance.
The fundraising discrepancy has frustrated the GOP. The largest Republican recipient of money from the industry is Sen. Dean Heller with $2.2 million, followed by Sen. Ted Cruz, who, with $1.6 million, is in 13th place among senators.
Despite being an incumbent, Cruz lags his challenger, Rep. Beto O’Rourke of Texas, who has collected $3.3 million. In fact, if you expand the list of recipients to Senate candidates, the numbers are more lopsided. O’Rourke has collected more than all but four senators and the pace of his fundraising overall is record-breaking. He collected $38.1 million in one quarter.
Rep. Kyrsten Sinema, who is running a “centrist” campaign in a tight race to fill Jeff Flake’s seat in Arizona, ranks 7th with about $2.2 million in money from finance, outraising not only her opponent but every member of the GOP in Congress.
Does Wooing Wall Street Help Win Elections?
The degree to which Democrats are relying on Wall Street is worrisome and has been for a long time. While some long for the days of President Obama, people forget that he raised more money from finance than any candidate in history at the time of his first presidential campaign. Hillary Clinton’s relationship to Wall Street was a big vulnerability as well. Her paid speeches to Goldman Sachs, for instance, gave her problems with the left.
When Bernie Sanders raised the issue in debates, it might have been the most visible debate about the role of money in politics in US history. Now, the debate continues to rage on.
“There’s no way that any vote in a red state or a blue state that supports Wall Street like this is a benefit at the polls,” Charles Chamberlain, executive director of Democracy for America, a progressive organization that raises money for candidates, told The Hill.
Progressives cite compelling statistics from a Public Policy Polling survey from February.
“… voters strongly support regulating Wall Street, oppose [the Dodd-Frank repeal] … and are inclined to punish politicians who support the measure,” the survey said. “This issue has the potential to move votes in this fall’s midterm election. 65 percent of voters are less likely to vote for a member of Congress who supports a bill weakening oversight of many of the country’s largest banks …”
It may well be true that voting for Wall Street doesn’t endear politicians to voters. Polling shows deep distrust over Wall Street. The problem is that these politicians don’t seem to care.
Whatever damage is done by voting with Wall Street seems to be a cost these Democrats are willing to pay. Voting for Wall Street may not endear a candidate to voters, but millions of dollars in advertising and PAC money? Those can help candidates win, especially when they already have all the advantages of an incumbent in a legislative body designed to curb democracy.
Senate.gov: “Was a Senate Really Necessary?”
“The evils we experience flow from the excess of democracy,” Elbridge Gerry said at the 1787 Constitutional Convention, held in private with no press present among 55 wealthy elites. “The people do not want virtue but are the dupes of pretended patriots.”
It was this line of thinking that led the founders to create a body that voters could not turn over in one election (at least not more than one-third of it). In fact, initially voters did not choose senators at all; they were chosen by state legislatures until 1913 and the ratification of the 17th Amendment.
If distancing politicians from the will of the public was a goal of the founders – and it was – the Senate has proved to be an effective vehicle for that change. This helps explain why Republicans supported a Senate health care bill in 2017 that had the support of only 12 percent of the public, according to a USA Today poll. “[James] Madison clearly recognized the need for a smaller, more deliberative body in the legislative branch to cool the passions and control the urges of democratic masses,” notes the US Senate website, rather candidly. Appropriately, this essay starts off with “Was a Senate really necessary?” That is, indeed, a discussion worth having.
A Public Awakening
The good news is that Americans are more aware of these issues than ever before, Scherb said.
“In recent years, people are paying attention [to] the role of money in politics more and more,” he told Truthout. “People understand that money has too much influence.”
More than that, he says, are that more candidates are starting to shun corporate PAC money. As one PBS headline noted, there has been a recent “Rise of the Anti-PAC Democrat.” Two-thirds of Americans, according to a May 2018 Pew poll, support laws to limit money in politics. The support for these reforms is bipartisan, Pew reports.
If senators feel more pressure to court corporate donors than voters, public opinion won’t count for much. While Democrats badly want to retake Congress next session, it is worrisome that so many prospective members of the 116th Congress are so dependent on Wall Street money for political survival.
If voters and citizens wish to see this change, they will need to stop electing politicians who represent Wall Street. Only when politicians feel the sting from their shady relationship with corporate donors will they feel compelled to change.
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