“U.S. banks are giving far less to federal candidates this election cycle and increasing the proportion they are handing to Democrats as they rethink their political giving…”

Reuters, October 10, 2022

There’s always been a conflict for donors to political campaigns between fiscal issues and social issues. What matters more to corporate and individual donors, money concerns, like today’s runaway inflation and perhaps a looming recession, or important social issues like access to the full range of health care, including abortion, voting rights and LBGTQ freedoms? I’ve always thought the two are inextricably linked, but the idea of “put your money where your mouth is” seems to have been drowned out by overly partisan politics: Republicans historically have been more likely to vote their pocketbooks” and Democrats to vote for candidates backing their preferred social issues.

And in this upcoming election cycle, each party is pounding home its respective messages on inflation and abortion rights, as two vivid examples, and hope voters follow their previous voting patterns.

But the corporate donor winds seem to be shifting a bit for the midterm elections, as financial institutions are donating less money overall to federal campaigns and PACS, but allocating a slightly higher percentage of their donations to democrats.

I’ve compiled a few recent articles and statistics that match real numbers to this trend and attempt to explain why it’s happening.

Share

— First up for today are a few spending totals from Open Secret.org for this election cycle. Money spent on the midterm elections is projected to top $9.3 billion, several billion above monies spent on the 2018 midterms, adjusted for inflation.

Small individual donors make up larger share of federal contributions in the 2022 midterm elections

Democratic small individual donors contributed more than $640 million compared to $533.6 million from small individual GOP donors.

Source: OpenSecrets analysis of disclosures filed with the Federal Election Commission through Sept. 20, 2022.

https://www.opensecrets.org/news/2022/09/2022-midterm-election-spending-on-track-to-top-9-3-billion/

— The Reuter’s article from the opening quote describes the current political donation trend for big banks, but mostly avoids directly stating why it is happening now.

Lenders are also under pressure from staff and shareholders to support lawmakers active on issues beyond finance, such as addressing the racial wealth gap and education, according to several sources.

The top Democratic congressional recipient of bank PAC money, for example, is Joyce Beatty, [Ohio] who chairs the House Financial Services panel's subcommittee on diversity and inclusion, an issue which banks have loudly championed.

https://www.reuters.com/world/us/us-banks-cut-donations-federal-candidates-up-democrats-share-ahead-mid-terms-2022-10-10/

— These definitions from Investopedia help us understand the different types of political donations and how and where these monies are directed.

One example: Money contributed directly to a specific candidate is known as hard money, while indirect contributions to political parties and political action committees are known as soft money.

https://www.investopedia.com/ask/answers/08/hard-money-soft-money.asp

— From OpenSecrets.org. is a detailed breakdown by amount and political party of donations to federal candidates and PACS. Republican candidates and PACS still receive the majority of the overall donations from the largest banks, but are receiving less during this election cycle.

METHODOLOGY: The numbers on this page are based on contributions from donors (individuals as well as corporations and unions that give directly from their treasuries) to outside groups and from PACs (including super PACs) and individuals giving more than $200 to candidates and party committees. In many cases, the organizations themselves did not donate; rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates.

All donations took place during the 2021-2022 election cycle and were released by the Federal Election Commission on Thursday, September 22, 2022.

https://www.opensecrets.org/industries/contrib.php?ind=f03&Bkdn=DemRep&cycle=2022

And finally for this evening, another Reuters’ article that showcases how certain members of Congress pressure the banks and how the banks respond. Republican Senators, for example, warned certain bank CEO’s testifying before Congress to quit asserting a “liberal agenda” by taking positions on gun control and abortion rights seen as leaning toward the democrats.

The increased scrutiny [from Congressional leaders] underscores the challenges the country's largest lenders increasingly face as they try to balance commercial interests with pressure from policymakers, activists and investors to take stances on environmental, social and governance (ESG) issues.

https://www.reuters.com/world/us/senior-republican-chastises-banks-social-agenda-that-harms-america-2022-09-22/

Isn’t it possible that the banks’ commercial interests benefit from taking positions on certain social issues because those positions align with the majority of Americans, particularly on gun control and abortion rights?¹

What do you think about the trend in political donations? Does it matter to you who is donating to whom and will it affect your vote? Share your thoughts in the Comment Section below.

Leave a comment

As always, there is no better time to subscribe to Crime and Punishment than right now. Either a free or paid subscription will help support my work—thanks!