Sen. Scott Brown, R-Mass., addresses the Greater Boston Chamber of Commerce in Boston, Monday, Nov. 15, 2010. Brown called for government to focus on creating a better business environment. (AP Photo/Josh Reynolds)
The financial industry is lining up behind Republican U.S. Senator Scott Brown’s reelection campaign, making him one of the top recipients of cash from financial, insurance and real estate companies during the current election cycle.
While Democrats are trying to portray Brown as beholden to Wall Street, the reason for such strong support may have as much to do with Brown’s Democratic opponent, Elizabeth Warren, who has portrayed herself as a “tough cop” policing Wall Street.
“There are some in the industry who are concerned about her positions or comments relating to the industry,” said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a lobbying group that represents some of the country’s biggest financial institutions. Talbott pointed to Warren’s work creating the Consumer Financial Protection Bureau – an agency created by the Dodd-Frank financial reform bill to protect consumer interests.
According to the non-partisan Center for Responsive Politics, donors from the finance, insurance and real estate industries gave Brown $2.3 million between January 2011 and April 30, 2012. The only Senate candidate to raise more money from those groups was Democratic Sen. Kirsten Gillibrand, of New York. Warren has gotten just $307,000 from those industries.
The four companies whose employees or political action committee gave the largest donations to Brown are financial or insurance companies, according to data compiled by the Center for Responsive Politics. Fidelity Investments gave Brown $168,000; Liberty Mutual insurance company and investment bank Goldman Sachs each gave around $74,000; accounting firm PricewaterhouseCoopers gave $68,000. (Employees or political action committees gave the money, not the companies.)
Employees of Bain Capital – the Massachusetts-based private equity investment company started by presumptive Republican presidential nominee Mitt Romney – gave Brown $55,000. MassMutual Life Insurance gave $59,000. Employees of other financial companies – including TA Associates, Barclays, Bank of New York Mellon, and J.P. Morgan Chase are also among Brown’s most generous contributors.
Many donors who gave the maximum allowable contribution to Brown’ campaign committee are top players in financial firms in Massachusetts: James Mooney, managing director of the Baupost Group hedge fund; Mark Hastings, managing partner of the private equity group Garvin Hill Capital Partners; James Benson, CEO of Benson Botsford, a financial services investment company; Paul Edgerley, a managing director at Bain Capital, who is also a major donor to Romney; and others.
Brown also has a joint fundraising committee with the National Republican Senatorial Committee, which can accept donations of up to $35,800, with $5,000 going to Brown and the rest to the NRSC. A Boston Globe analysis of Brown’s joint committee found that nearly half the donations to that committee came from the financial industry. Among those who gave the maximum donation, according to Federal Election Commission filings, were: Timothy Barrows, a general partner at the investment firm Matrix Partners in Boston; Howard Cox of Florida, an advisory partner at the Greylock Partners venture capital firm; and Walter Donovan, chief investment officer of Boston’s Putnam Investments.
The graphic below shows campaign finance data for the 2011-2012 election cycle.
The Massachusetts Democratic Party has attacked Brown for taking donations from Wall Street, arguing that Brown is beholden to financial interests.
After J.P.Morgan Chase lost $2 billion in a trading error, the Massachusetts Democratic Party pointed out that J.P. Morgan employees donated $50,000 to Brown.
Warren spokeswoman Alethea Harney said, “Scott Brown is taking care of Wall Street and Wall Street is taking care of Scott Brown. They’re investing in Scott Brown because they know he will be there for them and Elizabeth Warren will be there taking them on, standing up for hard-working families and seniors to protect their investments.”
Democrats say that although Brown was one of three Republicans to support the Dodd-Frank bill, he used his leverage as a key vote to get Senate Democrats to eliminate a $19 billion fee on major financial institutions and to weaken a provision that would have prohibited banks from making certain types of investments.
Brown, asked about his donations from the financial industry after a speech at Bunker Hill Community College, said, “I’m raising money like every other member of the delegation.” Brown pointed out that Massachusetts is one of the top financial centers in the country.
Brown spokesman Colin Reed said, “Scott Brown’s fundraising is no different than President Obama, Elizabeth Warren, (Democratic Massachusetts Senator ) John Kerry or the rest of the Massachusetts delegation, except Professor Warren hypocritically attacks Scott Brown for it. Scott Brown was the tie-breaking vote in favor of the Wall Street reform bill which imposed new regulations on the financial industry.“
Obama, a Democrat, received $7.5 million from the financial, insurance, and real estate industries this election cycle, according to the Center for Responsive Politics; Romney got $17.9 million; Kerry, the 2004 Democratic presidential nominee, got $53,000 this election cycle and $20 million during his career.
But Brown’s totals are unusually high. Brown has received a total of $4.1 million from the financial sector since he ran for Senate in a 2010 special election.
Brown’s predecessor, Democratic Sen. Edward Kennedy, got $3.7 million from the financial sector between 1989 and 2010. Massachusetts Rep. Barney Frank, a Democrat and former chairman of the powerful House Financial Services Committee, took in $1.3 million from the financial sector during his last run in 2010 and $4.4 million since 1989.
Messages left for several of Brown’s major donors in the financial industry were not returned. Talbott, of the Financial Services Roundtable, said he believes support for Brown is not based on one particular vote. “If you look at his track record, he has an understanding of issues facing the financial services industry,” Talbott said.
Economist Brian Gottlob, principal at PolEcon Research, who is unconnected to either campaign, said it is natural that people in finance would be wary of Warren, given that she was considered to head the Consumer Financial Protection Bureau. Warren also chaired a congressional committee overseeing the use of federal money for the Troubled Asset Relief Program, the bailout of financial institutions.
“An aggressive role around consumer protection would naturally, in any industry, make those in the industry that are regulated more nervous about a candidate,” Gottlob said. “People in the financial services industry had concerns about the financial protection agency, what it was, what it might do.”
Warren has been a strong proponent of government regulation of the financial industry. She fought against changes to the U.S. bankruptcy code, passed in 2005, that made it harder for individuals to file for bankruptcy. Banks and credit card companies supported the changes. Recently, she called for the re-implementation of a law separating commercial and investment banks – a move banks are likely to oppose.
The financial industry has historically been the single biggest source of money in U.S. elections. Bob Biersack, senior fellow at the Center for Responsive Politics, said the industry will be particularly involved in a year when the balance of the Senate is up for grabs. “When control of the Senate is at stake and every Senate race is going to count for a lot this year, industries that feel there’s a big regulatory agenda where the makeup of Congress is important to them will be involved in lots of places,” he said.
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