The Wall Street giants that received a financial lifeline from Washington may have no compunction about paying big bonuses to their dealmakers and traders. But their willingness to deliver “thank you” gifts to President Barack Obama and the Democrats is another question altogether.
Obama will fly to New York on Tuesday for a lavish Democratic Party fundraising dinner at the Mandarin Oriental Hotel for about 200 big donors. Each donor is paying the legal maximum of $30,400 and is allowed to take a date. Four of the seven “co-chairs” listed on the invitation work in finance, and Democratic Party organizers say they expect that about a third of the attendees will come from the industry.
But from the financial giants like Goldman Sachs, JPMorgan Chase and Citigroup that received federal bailout money — and whose bankers raised millions of dollars for Obama’s election — only a half-dozen or fewer are expected to attend (estimated total contribution: $91,200).
Part of the reason, several Democratic fundraisers and executives said, is a fear of getting caught in the public rage over the perception that Wall Street titans profiting from their government bailout may use their winnings to give back to Washington in return. And the timing of the event, as the industry lobbies against proposals for tighter regulations to address the underlying causes of last year’s meltdown on Wall Street, has only added to the worry over public appearances.
“There are sensitivities there,” said Scott Talbot, a lobbyist for the industry’s Financial Services Roundtable. Political contributions “can make a donor a target,” Talbot said. Many involved, though, say the low attendance from those Wall Street giants also reflected a broader disenchantment with Obama over the angry language emanating from the White House over the million-dollar bonuses and anti-regulatory lobbying.
“There is some failure in the finance industry to appreciate the level of public antagonism toward whatever Wall Street symbolizes,” said Orin Kramer, a partner in an investment firm who is a Democratic fundraiser and one of the event’s chairmen. “But in order to save the capitalist system, the administration has to be responsive to the public mood, and that is a nuance which can get lost on Wall Street.”
Democratic fundraisers say the economic slump has dampened fundraising across every industry. Wall Street has lost Bear Stearns, Merrill Lynch and Lehman Brothers to consolidation in last year’s credit crunch. Some former Obama fundraisers on Wall Street have ascended to jobs in the administration, like Michael Froman, a former top Citigroup executive who is now an adviser on economics and national security.
Current Democratic fundraisers say their 2008 take from Wall Street may also have benefited from the personal connections of the party’s chief fundraiser that year, Philip D. Murphy, a former top executive at Goldman Sachs. (He is now ambassador to Germany). And as in recent years, Democrats are raising far more from Wall Street executives than Republicans, according to data sorted by the Center for Responsive Politics.