Wall Street Firms Funnel Millions to Bush
Finance Sector Produces Surge of Cash to President Who Cut Taxes on Dividends, Gains
By Thomas B. Edsall and Jonathan Weisman
Washington Post Staff Writers
Monday, May 24, 2004; Page A04
At Merrill Lynch & Co. Inc., a suggestion from chief executive E. Stanley O'Neal is not to be taken lightly.
O'Neal eliminated 24,000 jobs, froze pay and steadily pushed out competitors for executive power, including colleagues who had championed his rise up the corporate ladder. "Ruthless," O'Neal has reportedly told colleagues, "isn't always bad."
So it came as no surprise that when O'Neal sent letters to senior executives at Merrill Lynch in early June asking them to contribute to President Bush's reelection campaign, the response was prompt and generous.
Between June 12 and June 30 of last year, the Bush-Cheney campaign was inundated with 157 checks from Merrill Lynch executives and at least 20 from their spouses; 140 checks were for the maximum allowed by law: $2,000.
Total take generated by the O'Neal letter: $279,750 in less than three weeks. When that total is combined with the rest of the money contributed to Bush by employees during the current election cycle, Merrill Lynch personnel have given $459,050, according to Dwight Morris & Associates, which studies political money.
The money flowing from Merrill Lynch employees is part of a $12.14 million tidal wave of cash to the Bush campaign from the finance and insurance sectors.
Wall Street has stepped up to the plate in support of Bush, and Bush has sponsored legislation producing billions of dollars in revenue on Wall Street.
Capital gains and dividend tax cuts have encouraged substantial asset shifting by investors -- transactions producing commissions for securities firms. In addition, in 2001, Bush secured a gradual repeal of the estate tax, allowing the accumulation of investment wealth without fear of large tax liability for heirs.
The 10-year revenue loss from the elimination of the estate tax will be $133.2 billion, according to Congress's Joint Committee on Taxation. The revenue losses from the dividend and capital gains cuts will be $125.3 billion through 2010, according to the committee.
In addition, the administration has proposed creation of tax-free "Lifetime Savings Accounts" that, if approved, would result in a major shift from savings accounts to investment accounts managed by Wall Street companies.
O'Neal is one of nine Wall Street "Rangers" -- each one has raised at least $200,000 for the Bush campaign. In addition, five other executives of prominent securities firms have raised at least $100,000 each to qualify as Bush "Pioneers."
The O'Neal-generated cash is a record for such a short time period, according to Morris and other campaign finance experts.
O'Neal's success, however, represents only a small fraction of an unprecedented drive by top Wall Street firms in support of the president.
When employers of contributors to the Bush campaign are ranked, seven out of the top 10 are major securities firms. Employees of Morgan Stanley & Co. Inc. have contributed the most of any single company to Bush: $505,675.
© 2004 The Washington Post Company