Politico: Wall Street invested heavily in Obama

Politico
Wall Street invested heavily in Obama
By Kenneth P. Vogel
January 20, 2009

Barack Obama boasted on the campaign trail that his administration would not be beholden to special interests, because his presidential bid was funded by small donations from regular folks.

But a Politico analysis of career contributions to the inner circle of the incoming White House — President-elect Obama, Vice President-elect Joe Biden and chief of staff Rahm Emanuel — finds some big special interests that have been investing in the three Democrats for years.

The list of top donors to the trio’s campaigns includes many firms at the heart of the financial meltdown — including taxpayer-funded bailout beneficiaries Citigroup, JPMorgan Chase and Bank of America — and a host of other troubled investment houses that may find themselves seeking money from the new Obama administration, which has also pledged tougher regulations.

The analysis shows that, even as Obama’s presidential campaign leaned to a great extent on small online donations to raise a record-shattering $662 million, Obama and the men who have become his closest lieutenants have held special appeal to donors from certain moneyed industries. The president-elect, meanwhile, has leaned on leaders from those industries for policy advice and assistance during his campaign and transition, and has installed some in his new administration.

In addition to finance, top donating sectors to Obama, the former junior senator from Illinois; Biden, the former senior senator from Delaware; and Emanuel, a former congressman from Illinois, include law and lobbying firms such as Skadden, Arps, Slate, Meagher & Flom — where Obama’s pick to head the White House Office of Public Liaison, top campaign fundraiser Tina Tchen, was a partner — and tech firms such as Microsoft and Google, whose employees and executives have given a combined $1.4 million. Google Chief Executive Officer Eric Schmidt advised Obama on clean energy jobs during the campaign and has been mentioned as a possible candidate for a new federal chief technology officer post.

Another major source of donations was academia, with $775,000 coming from the professors and other employees of Harvard University. Obama went to law school there and has looked to the school for a bevy of advisers for his new administration, including likely Federal Communications Commission Chairman Julius Genachowski, a former law school classmate, and the new chief of the White House Office of Information and Regulatory Affairs, Cass Sunstein, a Harvard law professor.

The analysis of career donors, based on Federal Election Commission records dissected by the nonpartisan Center for Responsive Politics, includes contributions from individuals and political action committees since 1998 to the congressional and presidential campaigns of Obama and Biden — as well as to Emanuel’s four campaigns for the House — broken down by employer and by sector.

The finance, insurance and real estate sector contributed $44.2 million to the three men’s campaigns, making it the largest discernible donor sector after law and lobbying, which pitched in $49.1 million. The tech sector — categorized by the center as “communications/electronics” — chipped in $24.7 million.

The top three corporate employers of donors to the new White House came from the world of high finance: Goldman Sachs, Citigroup and JPMorgan. UBS AG, Lehman Brothers, Morgan Stanley, Bank of America, Merrill Lynch and Credit Suisse Group also were among the top 30.

Those nine firms’ executives, employees and political action committees have given a combined $5.1 million to the campaigns of Obama, Biden and Emanuel since 1998, when campaign finance records became searchable electronically.

Lehman Brothers went bankrupt in September, when Merrill Lynch sold itself to Bank of America. Citigroup, JPMorgan and Bank of America, meanwhile, have received billions in taxpayer money as part of the financial bailout, though JPMorgan was the only one of the trio to avoid posting fourth-quarter losses.

The Obama team hasn’t ruled out additional aid to the financial sector but has promised heightened oversight of Wall Street, increasing the impetus for financial firms to make their voices heard in Washington in the coming months.

Most of the firms’ contributions, of course, came before the financial meltdown, and resulting bailouts became Washington’s focus late in Obama’s presidential campaign against Republican rival John McCain, the veteran Arizona senator.

Though Obama’s presidential campaign raised more than McCain’s from nearly every sector, the traditionally Republican-leaning financial sector’s career contributions to Obama, which alone tally $37.6 million (compared with $32.1 million for McCain since 1998), suggest that the industry collectively judged the president-elect an attractive politician.

Obama has turned to folks with Wall Street ties for economic advice and fundraising help throughout his campaign and transition, accepting as much as $800,000 in bundled contributions for his campaign and Inauguration from Louis Susman, who retired recently as a top Citigroup executive.

In February, Obama consulted on an earlier economic stimulus package with UBS Americas Chief Executive Officer Robert Wolf, who has raised more than $600,000 for the campaign and Inauguration.

Obama also sought economic counsel from JPMorgan’s chief executive officer, Jamie Dimon, who worked on the bailout and had been bandied about as a possible Obama pick for treasury secretary.

Instead, Obama tapped New York Federal Reserve President Timothy Geithner, one of several appointees for administration economic posts who are protégés of former Clinton Treasury Secretary Robert Rubin, an Obama adviser and, until recently, a Citigroup director.

Gary Gensler, another Rubin acolyte who was formerly a top Goldman Sachs official, has been tapped to be chairman of the U.S. Commodity Futures Trading Commission.

Bruce Heyman, a manager at Goldman Sachs, bundled as much as $550,000 for Obama’s campaign and Inauguration, while Mark Gilbert, formerly a senior executive at Lehman Brothers, bundled more than $685,000.