Democrats See Benefits To 'Revolt' By Wall Street Donors
On Tuesday morning, the Washington Post and Politico published dual stories exploring the "revolt" against Democrats by Wall Street donors angry with the party's push for financial reform.
The articles framed the phenomenon as a major problem for the party in power, with donations from the financial sector down 65 percent from two years ago. The fact that the National Republican Senatorial Committee emailed the pieces to reporters early in the morning only underscores the narrative that Wall Street's cold shoulder could prove to be a problem for Democrats in November.
But the White House and various Democratic campaign organizations don't seem to be bothered -- if anything, operatives see some benefit to the storyline that the barons of Wall Street favor the GOP.
The logic is fairly straightforward, according to a senior White House aide: At a time when the financial sector is held in poor repute, any association with its chieftains can be politically toxic. Passing financial regulatory reform (and being punished by Wall Street for it) can put a candidate in a sympathetic light among voters.
"In terms of the conversation with voters in this election, there is no question that contributions from Wall Street are an issue and for Democratic candidates to be able to run without those contributions is a plus," said Steve Rosenthal, the president of the Organizing Group, a DC consulting firm, and former political director of the AFL-CIO.
It would, of course, be folly for Democrats to trumpet this belief too widely, lest they completely turn off a major source of campaign funds. But already, the party is working locally to place as bright a spotlight as possible on Wall Street contributions to Republicans -- among others, Gov. Ted Strickland (D-Ohio) routinely highlights his challenger, Rep. John Kasich's (R-Ohio), previous work at Lehman Brothers and Pennsylvania Democrat Joe Sestak and Illinois Democrat Alexi Giannoulias often accuse their respective Senate opponents, Pat Toomey and Rep. Mark Kirk (D-Ill.), of Wall Street favoritism.
"Republicans didn't regulate them for years, let them off the hook and now they are cashing in on it," said one senior party official when asked about the Post and Politico pieces. "They didn't police these guys and now they are being brazen about taking their cash."
But the strategy has its limitations, in large part because not every Democrat can play the role of anti-Wall Street crusader. Giannoulias, for one, is weighed down by the fact that the collapse of his family bank cost the FDIC $394 million. Other candidates, meanwhile, have been eagerly trying to fundraise from Wall Street rather than disavow its money. Sen. Kirsten Gillibrand (D-N.Y.) was highlighted by Politico as having "chutzpah" for demonizing the financial sector and then turning around and asking for its campaign help. Reps. Carolyn Maloney and Paul Kanjorski (D-Penn.) are others.
"They're just as eager to raise money from Wall Street," one Republican operative told the Huffington Post, "more of their previous donors are just saying no to them, though."
Mainly, however, there is a cynical belief that having the maximum amount of cash for disposal outweighs the poor publicity that comes with any Wall Street associations. All three of the aforementioned Republicans (Kasich, Toomey, and Kirk) are polling well. And with the NRSC closing the gap on the DSCC's fundraising advantage (and with the Democratic Party forced to defend more seats in the fall), there could be serious implications for tactical, on-the-ground operations.
"I don't know if it is ever good news to lose money," admitted Bob Borosage, co-director of the progressive, Campaign for America's Future. "But I do think that there will be a lot of efforts to ensure that those legislators who stood in the way of financial reform and pocketed from the banks aren't able to run without voters knowing about that."
Of course, the fact that Wall Street is turning its attention to the GOP is historically unexceptional. The financial services industry tends to hedge its bets, putting money behind parties it believes will take over power -- backing Republicans before 1994 and Democrats during the second term of George W. Bush. But if the loss of Wall Street cash is accompanied by broader donor apathy, it could portend bad results for Democrats in the fall. And if lawmakers are perceived as having not gone far enough to reign in Wall Street's excesses with respect to regulatory reform, it stands to reason that they'll get none of the credit for battling the financial sector with all of the shortcomings of having their fundraising spigot turned off.
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First Posted: 07/06/10 03:03 PM ET Updated: 05/25/11 06:00 PM ET