Democrats Take Wall Street’s Cash

US Federal Election Commission data shows that Wall Street has shifted its allegiance in favour of Democrats in the 2006 election cycle by donating more to Democrats than Republicans who have been the investment banks’ usual supporter. Compared to the $21.7 million for Republicans, Democrats have received $23.8 million from the Wall Street. In the previous five election cycles, Republicans received 52-58% of the industry’s political donations. Data shows that five leading firms Lehman Brothers Holdings, Goldman Sachs Group, Morgan Stanley, Merrill Lynch & Co and Bear Stearns Companies have contributed $ 6.2 million so far to candidates, with about 52% going to Democrats.

The 2006 election cycle began in January 1, 2005. An analysis by the Centre for Responsive Politics, a nonpartisan group that tracks political contributions, shows that 2006 election cycle marks the first time in dozen years that securities firms’ donations have tilted leftward.

According to some analysts, the shift in overall contributions to Democrats is a reflection of loyalty to New York’s powerful Democratic senators, Hillary Clinton and Chuck Schumer. Clinton, who is seen as a leading candidate for the White House in 2008, is the biggest beneficiary. She has received $1.1 million during the 2006 election cycle. Schumer, who is chairman of the Democratic Senatorial Campaign Committee (DSCC), is using his home field advantage on Wall Street to take advantage over Republican fund?raisers. The DSCC has raised $81.3 million compared to $69.2 million by the National Republican Campaign Committee. Contribution of the industry to DSCC is $6.2 million compared to only $2.6 million for the Republican’s national committee.

Some analysts comment that despite being flooded in record profits, Wall Street executives, investment bankers, brokers and traders may be getting tired of Republican control. President Bush’s popularity is going down and growing violence in Iraq also weighs heavy on Republican leadership. Increasing US deficit under the Bush administration may also be a concern for Wall Street.