Wall Street executives have pleaded economic ruin, secured hundreds of billions of dollars in taxpayer assistance and been pilloried for their business excesses. But none of that has curbed their appetite for doling out political donations - or the willingness of politicians to accept the largesse.
A Washington Times analysis found that executives and employee-funded political action committees of banking companies that received bailout money have donated more than $2 million to members of Congress and other politicians since lawmakers approved the federal rescue of America’s financial system in October.
The PACs linked to the top 20 recipients of federal rescue funds have spent a combined $1.5 million on donations since Congress approved the bailout while employees of the top 10 recipients of bailout money have donated an additional $726,070, Federal Election Commission records showed.
The financial industry has long been a dominant political giver. For instance, executives of the top 10 bailout recipients gave $1.2 million in donations during the same period in 2004.
But their continued largesse since the bailout is a stark reminder that its executives still intend to play expensive politics even in the midst of a belt-tightening recession, analysts said.
“Taxpayers hope their money is being allocated entirely on the merits, but with Congress controlling how much money the Treasury gets to hand out, it will be impossible to completely exclude politics from this process,” said Sheila Krumholz, executive director of the Center for Responsive Politics, a nonpartisan group that studies political giving.
Lawmakers said the federal bailout program, which was passed Oct. 3, would help banks keep credit moving in the market to help Americans buy homes and cars.
But within weeks, money also was moving into their campaign accounts.
JPMorgan’s employee PAC, for instance, has issued $275,552 in political donations since Oct. 16, including $91,000 spent three weeks after the bailout was approved.
Wells Fargo & Co.’s employee PAC has approved $211,400 in political donations. Bank of America’s PAC issued another $304,265.
Banks stress that neither corporate money nor federal funds - distributed under the Troubled Assets Relief Program (TARP) - are used in PACs.
“Through our voluntary team member-funded political action committees - not through corporate dollars - Wells Fargo makes contributions to candidates who understand the needs of our company, team members, customers and communities,” Wells Fargo spokeswoman Julia Tunis Bernard said in an e-mail.
PACs are made up largely of employee contributions, and decisions about who receives a donation typically are made by a committee of employees.
“We don’t use TARP funds for lobbying or political contributions,” Bank of America spokeswoman Shirley Norton said. “We’re very sensitive to the fact we have taxpayer money.”
Members of Congress, some of whom have derided the banks for frivolous spending in the middle of the massive credit crisis, have received a majority of the campaign cash, according to a review of the FEC documents.
Rep. Shelley Moore Capito, West Virginia Republican, collected a combined $10,000 from the PACs of Bank of America, Wells Fargo and Goldman Sachs in October. She had voted against the bailout that month.
Rep. David Scott, Georgia Democrat, collected $9,500 from the PACs of Wells Fargo, JPMorgan and Goldman Sachs during October. He voted for the bailout.
Rep. Barney Frank, Massachusetts Democrat and chairman of the House Financial Services Committee, collected $9,500 from Wells Fargo and Goldman Sachs PACs in the month after the bailout was approved.
Michael Andel, Mr. Scott’s chief of staff, said the congressman was focused on getting mortgage relief passed, not necessarily aiding the banks.
“Banks and credit unions like Congressman Scott, but they fight all the time,” Mr. Andel said. “He has been supportive of efforts that bring strong oversight to TARP funding.”
The Treasury Department controls how and to whom the money is distributed, but Congress initially had to approve the program.