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.
Asked why so many of the top 10 employers of contributors are Wall Street securities firms, Scott Stanzel, spokesman for the Bush-Cheney '04 Campaign, said, "We are proud that we have over 1 million donors to the Bush-Cheney campaign representing every county in every state in this nation."
Altogether, personnel at these seven top 10 firms have given Bush $2.33 million, or a fifth of the $12.14 million from employees of the finance and insurance sector that has flowed to Bush this election cycle.
By comparison, the presumptive Democratic nominee, Sen. John F. Kerry (Mass.), has raised $472,564 from employees of the same seven firms, and the entire finance and insurance sector has given Kerry $2.7 million.
Many of the Wall Street Rangers and Pioneers are, like O'Neal, chairmen and CEOs -- top executives who rarely engage in the mundane work of political fundraising.
This year, the Wall Street Rangers include Philip J. Purcell, CEO of Morgan Stanley; Joseph J. Grano Jr., chairman of UBS Financial Services Inc.; Henry M. Paulson Jr., chairman and CEO of Goldman Sachs & Co.; and John J. Mack, CEO of Credit Suisse First Boston Corp.
None of them tried to become a Pioneer for the Bush campaign in 2000.
Spokesmen for the firms that replied to inquiries about the contribution patterns denied that the money was related to Bush tax policies. Mark Herr, of Merrill Lynch, said, "The simple facts are these: Mr. O'Neal wrote a letter to executives and asked them if they wanted to contribute to the president. He also made it clear that no one was obliged to do so." In a prepared statement, UBS Financial Services said employee contributions "reflect personal decisions by UBS employees with their own funds and are not from UBS as a corporate entity."
For the securities industry, a lot has changed since 2000, and the changes wrought by the Bush administration have produced large new profits. Those profits stand to soar higher if Bush is reelected.
Three successive tax cuts proposed by Bush and passed by Congress were specifically designed to lower taxation on savings and investment. The tax rate on most corporate dividends fell from 38.6 percent to 15 percent. Most capital gains on investment are now taxed at 15 percent rather than 20 percent.
Such measures were explicitly designed to encourage investment, thus channeling billions of dollars through Wall Street investment banks.
The liberal Institute for Taxation and Economic Policy said last week that those tax cuts -- coupled with other tax advantages -- have lowered the average federal tax rate on investment income to 9.6 percent.
In contrast, federal tax rates on wages -- including Social Security and Medicare taxes -- average 23.4 percent. The Social Security payroll tax falls most heavily on wage earners making $87,900 or less because income above that level is exempt.
The most dramatic Bush tax proposal has yet to be enacted.
The administration has proposed the creation of "Lifetime Savings Accounts," to which any individual could contribute as much as $7,500 a year. The capital gains, dividends and interest earned in the accounts would be free of taxation, and the money could be withdrawn at any time for any reason.
The proposed savings accounts contrast sharply with existing tax-free accounts, which are often restricted to lower- and middle-income savers, have much lower annual contribution limits and can be accessed only for certain expenditures, such as retirement, education and health care.
Under the proposal, a family of four could shield earnings of as much as $30,000 a year from taxation. That would, in effect, eliminate capital gains, dividend and interest taxation for most families. The median pre-tax income for a family of four is $63,278, and only very high-income families could afford to put as much as $30,000 annually into a tax-free savings account.
In a major boon for Wall Street, the new accounts would make traditional bank accounts all but obsolete. The Securities Industry Association (SIA) firmly backs the proposal.
"Lifetime Savings Accounts will allow people to save more of their money tax-free," said Richard Hunt, SIA senior vice president for federal policy. "SIA has strongly advocated the expansion and enhancement of savings and investment options available to Americans," the organization said in a statement.
Bush's plans for Social Security are potentially even more lucrative for the securities industry. The president has repeatedly said he would like to allow individuals to divert some percentage of their Social Security taxes into personal investment accounts, which in many cases would be managed by financial services firms.
The idea -- a centerpiece of Bush's 2000 campaign -- has gone nowhere. But White House economic policy aides have said Social Security reform could become the crowning domestic achievement of a Bush second term.