Bloomberg News

Goldman Sachs Leads Split With Obama, as GE Jilts Him Too

August 09, 2012

Goldman Sachs Leads Split With Obama, as GE Jilts Him Too

President Barack Obama looks inside a hydrogen cooled generator while touring the General Electric plant in Schenectady, N.Y., with GE CEO Jeff Immelt and plant manager Kevin Sharkey, right. Photographer: Pete Souza/The White House/Zuma Press

Goldman Sachs Group (GS:US) employees have changed to red from blue.

Four years ago, employees of New York-based Goldman gave three-fourths of their campaign donations to Democratic candidates and committees, including presidential nominee Barack Obama. This time, they’re showering 70 percent of their contributions on Republicans.

That’s the biggest switch among the 25 companies whose employees have given the most to candidates and parties since 1989, according to data through June 30 compiled by Bloomberg from the Center for Responsive Politics, a Washington-based research group that tracks campaign donations. Goldman isn’t alone; 13 of the companies’ employees are now giving more to Republicans after backing Democrats four years ago.

“A switch in party preference of this magnitude is virtually unheard of among major companies with an established presence in Washington,” said Rogan Kersh, provost at Wake Forest University in Winston-Salem, North Carolina.

Dallas-based AT&T Inc. (T:US) employees, who divided their contributions evenly between the parties in 2008, are now giving almost two-thirds of them to Republicans. Chairman Randall Stephenson gave $30,800 to the Republican National Committee in February -- his biggest donation in more than two decades -- six weeks after the Obama administration rejected a proposed merger with T-Mobile USA Inc.

“We don’t comment on personal contributions,” said Claudia Jones, AT&T’s spokeswoman.

GE Giving

Employees of General Electric Co. (GE:US) are giving 63 percent of their contributions to Republicans this year, almost a mirror image of their distribution in 2008 when Democrats received 66 percent of their donations.

“GE employees contribute personal funds to any candidate they choose,” said Lindsay Lorraine, a company spokeswoman.

Employees of just four of the top 25 companies, Time Warner Inc. (TWX:US), Pfizer Inc. (PFE:US), Comcast Corp. (CMCSA:US), and Microsoft Corp. (MSFT:US), continued to give a majority of their donations to Democrats. Redmond, Washington-based Microsoft workers and their families are the biggest source of contributions to Obama’s re-election campaign, giving him $418,845. Philadelphia-based Comcast employees and their families are eighth, at $216,156, and Time Warner employees and families are 10th at $191,834.

The business bets are being made even as an Aug. 5 ABC News-Washington Post poll found Romney’s unfavorability rating ticked higher to 49 percent, with 40 holding a favorable view of him. Obama’s favorability rating stands at 53 percent, while 43 percent view him unfavorably.

Wall Street

Nowhere is the change in financial fortunes more pronounced than on Wall Street.

The banking industry, blamed for triggering the worst economic downturn since the Great Depression, opposed new regulations and oversight that a Democratic Congress enacted and Obama signed into law over Republican opposition. The presumptive Republican presidential nominee, Mitt Romney, co- founder of the Boston-based private-equity firm Bain Capital LLC, has pledged to repeal the new rules.

Six of the 13 corporations whose employees reversed their political giving are financial institutions, including four of the top five. They are: Goldman, Bank of America Corp. (BAC:US), Morgan Stanley (MS:US) and JPMorgan Chase & Co. (JPM:US) The other two are Citigroup Inc. (C:US) and UBS AG. (UBSN)

Much of their money went to Romney’s presidential campaign and the joint fundraising committee set up with the Republican National Committee. Of the 10 companies whose employees gave the most money to Romney Victory, nine were Wall Street firms, according to a computer-assisted analysis by Bloomberg of Federal Election Commission data.

Goldman Reversal

Goldman’s giving showcases the change in loyalties. The company’s employees gave $6.1 million in 2008, 75 percent to Democrats. The amount topped the 25 companies; the percentage trailed only Time Warner. This year, Goldman employees have given $4.9 million, also more than anyone else, with 70 percent going to Republicans. David Wells, a Goldman Sachs spokesman, declined to comment.

Romney “is one of their own, and Obama has been attacking the way they make money,” said Linda Fowler, a professor of government at Dartmouth College in Hanover, New Hampshire. “Throw in legislation to rein in the large banks, and it’s pretty clear that they would switch.”

Four years ago, 15 of the 25 companies, including all six financial institutions, saw a majority of their employees backing Democrats, especially Obama, during the 2008 elections. Then-UBS Americas Chairman Robert Wolf raised more than $500,000 for the Democratic nominee.

Heart v. Head

“Wall Street fell in love with Obama in 2008,” said Stephen Hess, a professor of media and public affairs at George Washington University in Washington. “It had more to do with the heart than the head. And love affairs, at least of the political variety, usually end in disappointment or disillusion. So Wall Street has now returned to its own reality -- as well as one of its own.”

The top company source of funding for Obama in 2008 was Goldman, where employees gave him more than $1 million in campaign cash. JPMorgan and Citigroup employees were also in Obama’s top 10.

This time, Goldman employees are the biggest source of donations to Romney, giving $636,080. In fact, employees of financial firms account for eight of Romney’s top 10 sources of campaign cash. None are among Obama’s top 10 givers.

Regulation Opposition

“Many of the biggest corporations are angry at the Obama administration and the Democrats for their new regulatory policies,” said Craig Holman, a lobbyist for the Washington- based advocacy group Public Citizen, which supported those new laws. “This is ideological giving. These companies are investing heavily against Obama in 2012.”

The Goldman shift could be attributed to both the company’s opposition to the new banking law and its relationship with Romney, said Kersh.

“As Bain CEO, Romney hired Goldman bankers to underwrite Bain-managed IPOs, and Goldman investment managers supervise tens of millions of dollars of Romney’s personal wealth,” he said. “That type of close personal link to a particular industry or company has aided presidential candidates in the past and is paying off handsomely for Romney now.”

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $179.11 USD
    • 1.46
    • 0.82%
  • T
    (AT&T Inc)
    • $34.96 USD
    • 0.22
    • 0.63%
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