They received billions in help from the federal government to stay afloat during the worst days of the financial crisis and they’ve–mostly–paid it all back since. Now the top six biggest recipients of money from the Troubled Asset Relief Program–the Treasury Department program adopted in 2008 to shore up troubled banks–are contributing to the campaigns of congressional office seekers across the political spectrum.
Of the top fifteen recipients of campaign contributions from employees and political action committees of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo, five are running for office in New York state, Wall Street’s home base, and five are Republican candidates seeking election to the Senate. This is based on data collected from the Center for Responsive Politics.
These six banks were the biggest recipients of money from the bailout fund created by the Emergency Economic Stabilization Act of 2008. Bank of America and Citigroup each received $45 billion, JPMorgan Chase and Wells Fargo received $25 billion each and Goldman Sachs and Morgan Stanley both received $10 billion. Only Citigroup has failed to fully repay the money to the Treasury Department. Citigroup still owes $14 billion.
While the high number of contributions sent to New York pols and key individual lawmakers may be predictable, the presence of a number of Republican candidates seeking to become freshmen senators in the 112th Congress is not. Republicans have successfully used public anger against the bank bailouts to their advantage during the run-up to this fall’s midterm elections.
Rob Portman, a former congressman, U.S. Trade Representative and director of the Office of Management and Budget in the George W. Bush administration running for the Senate in Ohio, is the leading recipient of big bailout bank money among GOP Senate aspirants, having raised $97,592 from the six banks.
Portman, who stated he would have voted for the bailout bill, has not run directly against the bailouts, but has taken a position that the bailout money that has been paid back to Treasury should be used to pay down the deficit.
Other GOP Senate aspirants among the top fifteen recipients of big bailout bank contributions include California’s Carly Fiorina ($94,850), Illinois’ Mark Kirk ($81,275), Delaware’s Mike Castle ($66,000) and Missouri’s Roy Blunt ($65,642).
Blunt, Castle and Kirk currently serve in the House of Representatives and all three voted in support of the bailout on October 3, 2008. They also all voted against the financial reform bill in 2010.
Fiorina, as a top advisor in the 2008 presidential campaign of Sen. John McCain, defended McCain’s support of the bailout bill, but is now running against the bailout. In a recent debate Fiorina attacked her opponent, Sen. Barbara Boxer, for voting for the bailout and receiving campaign contributions from banking executives. The latter attack came despite the fact that Fiorina received more in contributions over the course of 2009-2010 from the six big bailout banks than Boxer.
The top recipient of contributions from the six big banks is Sen. Kirsten Gillibrand with $241,000. Gillibrand is running in her first Senate election after being appointed to take the seat of Secretary of State Hillary Clinton. Gillibrand has long relied on these big banks to provide funds for her campaigns. All of the banks, save for Bank of America, rank as top career donors to Gillibrand’s campaign efforts.
The second-biggest recipient of contributions from these six banks is Sen. Richard Shelby, the ranking member on the Senate Committee on Banking, House and Urban Affairs. Over the 2010 election cycle Shelby received $127,050 from the big bailout banks.
While Shelby voted against the bailout legislation in 2008, he played an instrumental role in opposing the financial regulatory bill advocated for by President Obama, Senate Banking Committee chairman Chris Dodd and House Financial Services Committee chair Barney Frank. Many in the financial sector, particularly the six big banks, opposed pieces of, if not the entirety of, the financial regulatory bill and worked to strip it of as many provisions as possible.
Shelby focused sharply on a provision designed to liquidate firms that were no longer solvent instead of bailing them out with Treasury funds. Shelby declared the liquidation fund to be a proposal for bailout forever and won concessions from the Democrats in the debate over the provision.
The other candidates hailing from New York state include freshman congressmen Scott Murphy ($105,050) and Mike McMahon ($103,350), senior senator and long-time Wall Street booster Chuck Schumer ($99,100) and Reshma Saujani ($88,200), the Democratic primary challenger to Rep. Carolyn Maloney.
Murphy, who won a 2009 special election to the upstate seat formerly occupied by Gillibrand, has long ties to the financial industry having worked for Bankers Trust and Advantage Capital Partners, a venture capital firm. McMahon, whose Staten Island district houses many employees in the financial sector, fought hard for the bank’s positions on derivatives during the debate over the Dodd-Frank financial reform bill.
Saujani is the only non-incumbent candidate for the House ranked in the top fifteen recipients of big bailout bank contributions. Earlier this year Saujani, a Wall Street banker, touted her Street cred by stating that she was, “running on my Wall Street record, not from it.” Saujani, in defending Wall Street, said, “Instead of browbeating Wall Street, I want to invite them to help create jobs.”
Despite the in flux of contributions from the financial sector that have buoyed her campaign, Saujani suddenly backtracked on her statement that she would not browbeat Wall Street. In a recent debate with Maloney, Saujani attacked the congresswoman for failing to make the financial reform bill tougher and for hosting fundraisers with Wall Street lobbyists during the crafting of the reform bill.
The other four candidates ranking in the top fifteen recipients of big bailout bank contributions include Senate Majority Leader Harry Reid ($74,250), Connecticut congressman and former Goldman Sachs banker Jim Himes ($69,320), Senator Richard Burr ($67,680) and Republican Minority Whip Eric Cantor ($66,100).
Burr, Cantor and Reid voted for the 2008 bailout. Himes was elected to Congress in 2008 after the vote had taken place. Both Reid and Himes supported the financial reform bill, while Burr and Cantor did not.