Which Bank Is the Worst for America? 5 Behemoths That Hold Our Political System Hostage
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Corporations can't give money directly to politicians running for federal office. They get around that sticking point in several ways. First, they can donate to campaigns through their political action committees (PACs). (A corporation can't fund its PACs from its revenues directly; it can create a PAC, pick up its administrative costs, and then solicit contributions from the company's executives and shareholders.) But corporate PACs can give no more than $5,000 a year to a given federal candidate.
Another way is through the use of what's known as “soft money.” Soft money is used to build party infrastructure or to buy political ads that are produced independently from a campaign. Soft money ads are ostensibly used to educate voters about various issues, but they often look exactly like campaign ads that convey a clear message of whom a voter should or shouldn't support.
“Bundling” is another way corporations inject money into politics. There are limits on how much an individual can give to a candidate for federal office, so wealthy donors seek out contributions from friends, family and business associates, and “bundle” them into large pots of cash. In exchange, they usually become part of a club – like the Bush “Rangers” – and get invited to insiders' events where they have plenty of opportunities to influence a candidate.
OpenSecrets.org's list of the top all-time political donors from 1989 to 2012 includes contributions from individuals associated with a company, from Corporate PACs and soft money through 2010 (more on that below). Where do the banks stack up? Goldman Sachs is number 25, five slots higher than the National Rifle Association. It also spends more on candidates than the American Hospital Association, the AFL-CIO and defense contractor Lockheed Martin. Citigroup (number 39 on the list, just above Microsoft), JPMorgan Chase (number 46, just below Blue Cross/Blue Shield) and Bank of America (number 50) are all heavy hitters. Of our big-spending financial institutions, only Wells Fargo didn't make the cut for the top 50.
As far as corporate PACs alone, Bank of America leads among commercial banks this election cycle, despite – or perhaps because of – its struggles, having already spent $249,500 on candidates for 2012--$153,000 of that on Republicans. Wells Fargo and JPMorgan Chase are close on its heels, with $171,500 and $166,499 respectively, and they both follow the trend, in 2012, of leaning Republican. (The finance industry as a whole gives about 69 percent of its donations to the GOP). Citigroup's PAC donated $56,000 thus far for 2012. And Goldman Sachs leads the pack among investment banks this cycle, having already shelled out nearly $300,000.
Just who are the recipients of all this largesse? There are many, but most play key roles on Congressional committees that oversee their businesses. Consider just one example: Senator Chuck Schumer, D-New York, one of the most powerful members of Congress (Schumer is known as “the senator from Wall Street”).
According to the National Journal 's rankings, Schumer is tied with two others as the 10th “most liberal” member of the upper chamber. But he owes his career to Wall Street. As Salon editor Steve Kornacki noted, in the early 1980s, when he was a little-known back-bencher in the House, Schumer managed to get himself a seat on the House Banking Committee, and immediately “set about making friends on Wall Street, tapping the city’s top law firms and securities houses for campaign donations.” "I told them I looked like I had a very difficult reapportionment fight. If I were to stand a chance of being re-elected, I needed some help," he would later tell the Associated Press.