President Barack Obama has been abandoned by the world of finance.
Over the course of the 2012 election, his presidential campaign has received about one dollar in donations from the financial sector for every five dollars given to his top competitor, Mitt Romney, according to figures provided by the Center for Responsive Politics (CRP). During the final three months of 2011, however, the margin has widened dramatically.
The Huffington Post examined campaign contributions from four highly influential finance sectors to both Obama and Romney. Using categories compiled by CRP, the 20 most politically active commercial banks, hedge funds, securities firms and "private equity and investment" firms were pinpointed (i.e. those with the strongest history of political donations); some lists overlapped. But between them, 68 separate companies were identified.
In the fourth quarter of 2011, Romney raised $1.49 million from employees of those 68 companies while the president's reelection campaign raised just $127,000 -- an 11.7-to-1 ratio. It was the most lucrative quarter for Romney yet.
"Clearly it was a great quarter for Romney, in terms of fundraising from Wall Street and from securities and banking firms, in particular the biggest one," said Sheila Krumholz, CRP's executive director. "It is not surprising that he was able to do that. It is just surprising how rapid the shift has been towards him and away from Obama."
The abandonment of the president by the financial sector has, indeed, been remarkable in scope and speed. Some of the very companies whose employees cut checks for Obama in 2008 now seem fully devoted to funding his competitor in 2012.
- Goldman Sachs employees, who donated more than $1 million to Obama's first run for the White House, gave Romney more than $106,000 in the fourth quarter of 2011. Obama received just over $12,000 during that same period.
- Bank of America employees, who donated more than $388,000 to Obama in 2008, gave Romney more than $77,000 in the fourth quarter of 2011. Obama received just under $16,000 during that same period.
- CitiGroup employees, who donated about $730,000 to Obama in 2008, gave Romney more than $196,000 during the fourth quarter of 2011. Obama received $3,842 during the same period.
Why the world of finance is leaving Obama is a subject of some irritation among Democratic fundraisers. Wall Street executives, after all, have thrived under the Obama administration. The Justice Department has been notoriously slow in pursuing investigations of fraud. Ditto for the Securities Exchange Commission.
But by this juncture in the 2012 election, however, advisers to the president's reelection team have all but publicly conceded that they will lose the battle for financial sector donors to Mitt Romney and likely by a steep amount. They offer several explanations for this. One is to point to rhetorical slights and a series of policy proposals -- eliminating taxes on carried interests and raising tax rates on millionaires -- that this administration has made, targeting the world of finance.
"It is obvious why they're abandoning Obama," said John Catsimatidis, the chairman and CEO of the Red Apple Group and Gristedes Foods and a disaffected Democrat. "I was a Clinton Democrat and I love Bill Clinton and I love Hillary. But when Obama attacks the business world on a daily basis, what do you want to say? That's what it comes down to."
Another explanation holds that the administration's reputation on Wall Street has been tarnished so badly that potential donors shudder at having their names listed on the FEC logs.
"Wall Street guys that write checks to this administration will come under peer pressure by many of their colleagues because they are convinced that somehow Obama and his administration has the financial services industry in their sights and are trying to hurt them," said one top Democratic fundraiser.
The most common explanation, however, is that the finance industry simply has a better partner in Obama's opponent.
"They have a very warm place to flee to," said David Donnelly, national campaigns director of the Public Campaign Action Fund. "It is no mistake that they are giving to him. He is a candidate by and for Wall Street, he has lived and breathed Wall Street all his life."
Many of the companies that are feeding Romney's finance sector fundraising are led by chairmen and CEOs who have been critical of Obama over the past three years. Chief among those is Blackstone Group Chairman Stephen Schwarzman, who compared a policy to increase taxes on private equity firms to Hitler invading Poland in 1939. In 2008, Blackstone employees sent $132,000 to the Obama campaign. In the fourth quarter of 2011, Obama only received $7,618 from Blackstone employees, compared to the $90,750 pulled in by the Romney camp.
Another hedge fund manager, Kenneth Griffin of Citadel, supported Obama in 2008, leading his employees to contribute more than $205,000 to the campaign. By the time of the election, however, he had switched his allegiance to John McCain. Since the election, he has openly discussed his "frustration" with Obama's policies, stating that he is "greatly concerned about the fiscal instability of the U.S." In the fourth quarter of 2011, Citadel employees completely abandoned Obama, contributing nothing to his campaign while giving $120,500 to Romney.
The decision by a number of potential Republican presidential candidates not to run fueled Romney's end-of-the-year surge in Wall Street, hedge fund and private equity contributions. In particular, New Jersey Governor Chris Christie's demurral freed up major Wall Street figures to come out for Romney.
This group of late deciders was lead by Elliott Management's Paul Singer, a Christie fan and one of the most sought-after Republican fundraisers. Romney scored another important Wall Street figure, JPMorgan Chase Vice President James Lee, who had been waiting for Christie's decision. Elliot Management employees and JPMorgan Chase employees gave $108,525 and $183,018, respectively, to the Romney campaign at the end of the year. Obama received just under $19,500 from JPMorgan Chase sources and nothing from Elliot Management sources during that time period.
The data that The Huffington Post examined did not include money raised by the Democratic National Committee -- which has a much higher cap on the donations it can receive. But even that addition doesn't seem likely to level the playing field for the president. Should he win the nomination, as seems likely, Romney will be able to turn to the RNC for campaign finance help as well. Neither of those totals, meanwhile, include the money that the financial sector is sending to super PACs, which have virtually no restrictions on how much they can raise and from whom. Restore our Future, a super PAC run by former Romney staffers, raised more than $30 million by the end of 2011, much of it from financial services sources, according to Pro Publica.
One top Democratic operative explained that party officials were biting their nails in nervous anticipation for Democratic hedge fund types to start donating to Obama-backing super PACs. Publicly, however, the posture is that the president will have a small donor base large enough to overcome both this disparity and the remarkable abandonment of the financial services sector at large.
"I believe that the Obama campaign is going to have more than adequate resources to run a very full-throated campaign, and no matter how much money the other side has, we are going to have sufficient resources to carry our message and carry the day," said Dennis Mehiel, the Chairman, CEO and sole shareholder of the Four M Corporation. "It doesn't matter what the super PACs have."