THE BLOG
03/28/2008 02:47 am ET | Updated May 25, 2011

Bankers Hold Sway Over Dem Candidates

The following piece is produced by HuffPost's OffTheBus.

Chris Dodd's recent efforts to appeal to new voters by contrasting his positions on means-testing for bankruptcy filers with John Edwards and Joe Biden are certainly timely, given current soaring foreclosure rates.

But why did Senator Biden and Edwards support means-testing in the first place? The answer is likely not just industry lobbying and campaign contributions. The financial industry is a major employer in both senators' states. And Biden and Edwards are not unique. Across both parties' fields, analysis of candidate records shows constituent interests have driven policy that doesn't necessarily square with campaign rhetoric.

The MBNA Corporation of Delaware, Bank of America (which now owns MBNA) and Wachovia, are all based in North Carolina. In 2002, MBNA had 10,500 employees in Delaware, a state with a labor force of about 650,000. The banking industry provided as much as 12 percent of North Carolina's Gross Domestic Product in 2003. Banking conglomerates Bank of America and Wachovia were the #2 and #3 employers in the Charlotte metro area. So the two of them may have just been looking out for their state's interests, which is their job as a Senator.

The other candidates have all been just as guilty when it comes to their home states' industries. Dodd and Obama both voted for the Class Action Fairness Act of 2005 when most Democrats opposed it. The act, which resulted in a federal takeover of most state class-action lawsuits, was seen by many as a gift to big business that would make it harder for citizens to get compensation for harm done to them by corporations.

So why would Obama and Dodd oppose this? Public Citizen may have the answer.

No industry has thrown more manpower into federalizing class-action lawsuits than the combined efforts of insurance companies and their industry associations, which have devoted at least 193 lobbyists to the issue from. These lobbyists have been divided among life insurance (79), property and casualty insurance (60) and HMOs (59).

Hartford, Connecticut has traditionally been known as the insurance capital of the world, and the state of Connecticut retains a strong insurance industry presence, with the headquarters of Hartford Financial Services, Aetna, W.R. Berkley, Phoenix and the Knights of Columbus.

Illinois is also home to a disproportionate number of insurance companies. State Farm, AllState, Aon, Old Republic International, Country Insurance & Financial Services and Unitrin are all headquartered there.

This same line of reasoning also explains why Senator Clinton, who's been raising the issue of fiscal responsibility on the campaign trail, supported the Tax Increase Prevention and Reconciliation Act of 2005, which paved the way for cuts in capital gains and dividend taxes. Most Democrats, as well as deficit hawk Republicans like George Voinovich, said the nation could not afford the tax cuts and voted against it.

The likely reason for Clinton's support it is that New York is the location of the NASDAQ, the NYSE, the AMEX, and a vast, vast array of securities firms, including every one of the Top 5 (Morgan Stanley, Merrill Lynch, Goldman Sachs, Lehman Brothers and Bear Stearns).

As such, it contains a massively disproportionate number of the beneficiaries of these tax cuts.

Finally, there's Governor Bill Richardson. Richardson was called "one of the strongest supporters of NAFTA" in Congress from either party in a 1993 policy paper from the conservative Heritage Foundation.

As a Democratic whip in Congress, he helped shepherd the North American Free Trade Agreement through the House of Representatives even as most Democrats, including Majority Whip David Bonior (now John Edwards' campaign manager), opposed it. Since then, NAFTA has widely been blamed for the emergence of a trade deficit with Mexico and the loss of about a million jobs, mostly in the manufacturing sector.

As a border state, Richardson expected New Mexico to make large gains in export-related jobs, and he maintained it had done so in a 2003 interview. Granted, in that interview and in the presidential race, he's become far more critical of the agreement. However, his vote in 1993 was cast with his state's interest in mind.

The same holds true on the Republican side when it comes to departures from conservative orthodoxy. Consider Giuliani on social issues, McCain on immigration, Huckabee on economic issues, and Romney on everything. Even the supposedly principled Ron Paul jettisoned his anti-government views when it came to getting hurricane relief for his district.

Fred Thompson stands out. His major departure from conservative orthodoxy is on tort reform, which the ultra-conservative Club for Growth calls an enigma. It could have something to do with his having been a personal injury lawyer.