A revolt among big donors on Wall Street is hurting fundraising for the Democrats' two congressional campaign committees, with contributions from the world's financial capital down 65 percent from two years ago.
The drop in support comes from many of the same bankers, hedge fund executives and financial services chief executives who are most upset about the financial regulatory reform bill that House Democrats passed last week with almost no Republican support. The Senate expects to take up the measure this month.
This fundraising free fall from the New York area has left Democrats with diminished resources to defend their House and Senate majorities in November's midterm elections. Although the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee have seen just a 16 percent drop in overall donations compared with this stage of the 2008 campaign, party leaders are concerned about the loss of big-dollar donors. The two congressional committees have raised $49.5 million this election cycle from people giving $1,000 or more at a time, compared with $81.3 million at this point in the last election.
Almost half of that decline in large-dollar fundraising can be attributed to New York, according to a Washington Post analysis of records filed with the Federal Election Commission. Donors from that area have given $8.7 million this year, compared with $23.9 million at this point in the 2008 cycle, with most of those contributions coming from big contributors in the financial sector. New York donors had given congressional Democrats almost twice as much money at this stage of the 2006 midterm campaigns, when Republicans ruled both chambers and held the White House.
Reasons for the plummeting donations include concern about the economic recovery and the personalities of the campaign committee leaders, Democratic experts say. But the overwhelming factor is the rising anger among financial executives who think they have not been treated well based on their support of Democrats over the past four years, according to lawmakers, party strategists and fundraisers. Several of the party's biggest New York donors declined through spokesmen to be interviewed. Some Democrats say pushing Wall Street reform is more important than any slippage in political donations.
"Democrats worked hard to pass reform with tough oversight, accountability and regulation, and it's no secret the big banks were against it," said Deirdre Murphy, spokeswoman for the Democratic Senatorial Campaign Committee. "But we believe preventing another financial collapse is the responsible thing to do, and at the end of the day, we will have the resources we need to compete in our targeted states, as will our candidates."
In reviewing the FEC records, The Post analyzed fundraising data for New York City and its suburbs in New Jersey, on Long Island and north of the city — a region that had become an outsized source of Democratic campaign cash. In the 2008 cycle, 28 percent of the two committees' itemized individual contributions came from the region. Manhattan alone accounted for 20 percent.
In this election cycle, the percentage raised in New York is less than 10 percent of the total.
More than 600 regular donors from the New York area — whose four- and five-figure checks added up to $10 million for the DSCC and DCCC in 2006 and 2008 — have so far abandoned their effort to retain the Democratic majorities.
Take Jamie Dimon, the head of J.P. Morgan Chase, who is known for his close relationship with President Obama.
In 2006 and 2008, he donated $65,000 to the Democratic committees. This election cycle, he has not contributed at all to the DSCC or DCCC. At the end of March, however, he gave $2,000 to the campaign of Rep. Mark Kirk (R-Ill.), who is seeking to claim Obama's former Senate seat. A spokeswoman for Dimon noted that he has given to individual Democratic candidates, just not to the campaign committees.
Other prominent Democratic donors who have not given to the Democrats this year include Leon Black, a co-founder of the $53 billion New York-based Apollo Global Management a private-equity firm, and his wife, Debra Black. The couple gave more than $200,000 to Democratic congressional committees over the previous two election cycles but have not given this year, according to the latest disclosure documents. A spokesman for Apollo declined to comment.
Lloyd Blankfein, chief executive and chairman of Goldman Sachs, has not donated to the Democrats, either, after giving $50,000 in the previous two cycles. A company spokesman declined to comment.
The problem has been particularly acute for Senate Democrats, whose previous DSCC chairman, Sen. Charles E. Schumer (N.Y.), had strong connections to Wall Street. Schumer was succeeded last year by Sen. Robert Menendez (N.J.), whose relationship with the financial sector is not as tight. The DSCC has seen a 69 percent decrease in contributions from the New York area. But, many party strategists say, the drop is so steep that its root cause is deeper than the personalities of the committee stewards.
Many Democrats said they first noticed the retrenchment from Wall Street in early 2009, when Obama and congressional leaders began denouncing what they considered excesses that caused the 2008 financial collapse.
Republicans, aware of Wall Street's unease with their former Democratic allies, have tried to reap the benefits, to mixed results. Senate Minority Leader Mitch McConnell (Ky.) and Sen. John Cornyn (Tex.), chairman of the National Republican Senatorial Committee, made a much-touted trip to New York in April, and House Minority Leader John A. Boehner (Ohio) lunched with Dimon in late January.
The two Republican committees that are focused on congressional races have received $2.7 million from the New York area, slightly more than at this point in 2008 but less than the $4 million they raised at this point in the 2004 cycle when the party still controlled Congress.
The two Democratic committees also have more money on hand than their rivals for this fall's elections — $46.2 million compared with $30.2 million.
"We're aiming for parity," said Rep. Pete Sessions (Tex.), chairman of the National Republican Congressional Committee.
He has a long way to go. Sessions had $12 million in the bank at the end of May, while the DCCC had $28.6 million. But Sessions finds himself in far better shape than his predecessor, who trailed Democrats by 8 to 1 in ready cash for the five-month sprint to finish the 2008 campaign season.
Democrats have lost financial ground in areas other than New York. As the second-largest source of cash for the party, the San Francisco region's big donors have cut support to the DSCC and DCCC by 34 percent, with donors in the legal and financial sectors dropping the most.
Some Democrats said there is an overall enthusiasm gap among large donors, who were energized to help claim the congressional majorities in 2006 and to expand them in 2008 while electing Obama. But that excitement has waned, especially among wealthy liberal donors who are frustrated that the Obama agenda often seems compromised by conservative Democrats on Capitol Hill.
"There's something fundamental going on, which is a complete disaffection with the committees," said one New York donor in the finance industry who raised about $3 million for Democrats in the 2008 cycle. The fundraiser, who spoke on the condition of anonymity to discuss the Democrats freely, said progressive donors were reluctant to give the party committees money out of belief that they often back the more conservative candidates. "Progressives have been throwing up their arms," the fundraiser said. "There's a tremendous amount of disaffection with the administration and how the caucuses have performed — or not performed."