The Washington PostDemocracy Dies in Darkness

The Finance 202: The financial sector is showering Democrats with campaign cash

with Brent D. Griffiths

Democrats are pledging to make life more difficult for the financial industry through higher taxes and stricter regulation. Yet the industry and those who work for it are directing more of their campaign contributions to the party than at any time since the Great Financial Crisis.

Indeed, for the first time since the 2008 campaign, the financial sector is giving a slight edge to Democrats, showering them with $222.4 million in political contributions, compared to $219.5 million to Republicans, according to data from the Center for Responsive Politics. The figures are current as of July 21.

The data combines contributions by corporate political action committees, whose decisions are typically directed by top executives, and donations from employees' own pockets. The results, then, in part reflect the personal political preferences of those working in major urban centers that are trending increasingly blue.

The sum of the industry's giving nevertheless cuts against its apparent interests at a critical time. 

The get-tough approach starts at the top of the Democratic ticket: Former vice president Joe Biden has proposed a slew of new strictures that would take a bite out of the industry’s bottom line. They include the creation of a government-run banking service; a consumer-friendly overhaul of bankruptcy laws; reimposing separations between retail and investment banking; establishing a federal credit agency at the Consumer Financial Protection Bureau; and a rollback of Trump’s tax cuts that some analysts say would rattle the stock market.

Not all corners of the industry are lining up behind Democrats. Commercial banks, for example, are still directing a majority of their contributions to Republicans. But so far this cycle, they are favoring the GOP by a narrower margin than they did in the 2016 election. Back then, the banks sent about two of three dollars to Republicans; now, they are steering about 58 percent of their contributions to the GOP, according to the center's figures.

Employees of the biggest banks are showing a pronounced preference for Democrats in their contributions. 

JPMorgan Chase employees, for example, have given the party 59 percent of the $2.1 million they have doled out this cycle, the most favorable margin for Democrats from the nation’s biggest bank since 2008. Ditto for those at Citigroup, who have sent about 55 percent of their political checks to Democrats. Wells Fargo, meanwhile, is on track to set a record for the share of donations to the party, with the bank's workers directing 58 percent of their contributions to Democrats so far. Representatives for the banks declined to comment.

Those who punch the clock at more Wall Street-centric banks likewise are tilting more Democratic in their giving than they have in any election in more than a decade. Goldman Sachs employees have given Democrats 63 percent of the $2.6 million they have forked over in contributions, the firm’s most Democratic-friendly split since they gave the party’s candidates 74 percent of their political money in 2008. And Morgan Stanley employees are also supporting Democrats with 63 percent of their donations, the bank’s widest margin in the party’s favor in any election dating back to 1990, according to the records from the center.

Those who work for investment funds are also leaning Democratic with their political money.

The private-equity industry has dedicated 54 percent of its $47 million in contributions to Democrats. And hedge fund employees have directed about 70 percent of the $27.8 million they have donated so far to the party.

The top lines obscure a more mixed picture of the private-equity sector’s activity, the Wall Street Journal’s Chris Cummings reports. “Despite the Democratic tilt, many in the industry have thrown their support behind vulnerable Republican senators, hoping to keep Democrats from controlling both chambers of Congress,” he writes.

“The erosion of popular support for President Trump since the coronavirus pandemic began has increased the likelihood that Democrats could take control of both the White House and the Senate, while retaining a majority in the House,” Cummings continues. “Many who work in private equity prefer control of the government to remain divided as it would make major overhauls of their industry more difficult, say people who work with buyout firms on government policy.”

He notes that employees “of New York-based Blackstone Group Inc., the world’s largest private-equity firm, have shelled out the most on the 2020 elections, spending $21.5 million, mostly in favor of Republican candidates and conservative groups,” citing the Center for Responsive Politics data. On the other hand, “Boston firm Bain Capital LP, co-founded by Sen. Mitt Romney [(R-Utah)], is second in employee spending at about $9.5 million, almost all of it dedicated to Democratic candidates and liberal groups.” 

The coronavirus response

Senate Majority Leader Mitch McConnell (R-Ky.) on July 27 unveiled an approximately $1 trillion stimulus package. (Video: Reuters)
GOP releases its $1 trillion relief plan.

There's a $2 trillion gap between both parties as bipartisan talks on a coronavirus relief bill ramp up: “All parties faced a tight deadline for a breakthrough as expanded jobless aid benefits are set to expire later this week,” Erica Werner, Jeff Stein and Seung Min Kim report.

“The prospects for a bipartisan deal remained far from certain as House Speaker Nancy Pelosi and Senate Minority Leader Charles E. Schumer met late [last night] with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows to begin formal negotiations. The White House officials described the talks as productive and said they would resume [today], but Democrats left the nearly two hour meeting describing the initial GOP offer as inadequate."

And money for the FBI building near Trump's downtown Washington hotel: “ … the GOP legislation contains a number of provisions not directly related to the coronavirus, including $1.8 billion for construction of a new FBI headquarters in Washington. President Trump has taken a personal interest in this project, but White House officials have not stipulated why they believe the language needed to be inserted in the coronavirus bill. Critics have alleged Trump is trying to keep the FBI building at its current location, which is diagonal from a Trump hotel property in downtown D.C.”

What's in it at a glance, per Jeff, Laura Meckler and Tony Romm:

  • Cutting weekly pandemic unemployment benefits to $200: This approach "would stay until states can implement a new approach that would pay the unemployed 70 percent of the income they collected before they lost their jobs. The states are supposed to phase in the new formula within two months under the new GOP plan, though it’s unclear how cumbersome that process could prove to be."
  • Another round of stimulus checks: Most Americans would receive another $1,200 payment. “There are some new restrictions in the GOP plan, such as blocking dead people and prisoners from receiving the benefit, and tweaking the eligibility of dependents so they can access the $500 supplement even if they are older than 17.”
  • Liability protections: McConnell has consistently made this a red line for the GOP. The bill would provide five years worth of protections for businesses, hospitals, universities and schools from exposure to coronavirus-related lawsuits.
  • A 100 percent deduction on business meals: Sen. Tim Scott (R-S.C.) said such a benefit would boost struggling restaurants.
  • At least $100 billion for PPP, Part 2: There will be about $190 billion to support second loans for PPP recipients. “Additionally, the package includes a separate and new pot of funding — totaling $100 billion — to provide long-term loans to seasonal businesses and businesses located in 'low-income census tracts.'”
  • Non-coronavirus items: $1.8 billion for construction of a new FBI headquarters in Washington, Jonathan O'Connell, Seung Min and Erica report. Senate Republicans refused to defend its inclusion and directed perplexed reporters to the White House.

More on the GOP's plan for pandemic unemployment assistance: The proposal, spearheaded by Senate Finance Chair Charles E. Grassley (R-Iowa), calls for giving states until October to switch over to the new system in which workers are paid 70 percent of their prior earnings. Until that point, the federal government would provide a $200-per-week benefit for each jobless worker, down from the $600 it is currently providing. States ‘unable’ to provide the more targeted form of benefit by Oct. 5 can ask the Labor Department for a waiver to continue the flat payment for two months, the proposal states.”

Another investigation shows PPP struggles to save jobs.

Three large companies that received millions have not retained most of their staff: “The Fairmont Grand Del Mar in San Diego, a luxury hotel owned by a group led by Richard Blum, a private equity chief and the husband of Sen. Dianne Feinstein (D-Calif.), received $6.4 million from the program. The hotel has been closed and most of its hundreds of workers are unemployed and unpaid, union officials said. To maintain their health insurance, workers send money back to the company,” Peter Whoriskey reports.

“A large group of restaurant companies operating under the umbrella of Orlando-based Earl Enterprises — including Planet Hollywood International, Bertucci’s and Buca di Beppo — similarly received loans in amounts ranging from $26 million to $54 million, according to the federal data, but in the places most affected by the pandemic, the restaurants employ only limited crews. The rest of the staff is unemployed and unpaid, employees said. And the Omni Hotels & Resorts, owned by Texas billionaire Robert Rowling, were approved for multiple loans from the program — one for each of 15 hotels — totaling $30 million to $71 million. But seven remain closed, and at those, most workers are on unpaid furloughs, union officials said.”

  • What the companies say: “They can’t rehire many people because they can’t fully reopen properties when a government pandemic order limits guests."

Coronavirus fallout

Focus is on Powell to outline our economic fate.

A growing number of indicators shows the recovery is stalling: “When the Federal Reserve meets this week, investors and policymakers alike will pay close attention to how Fed Chair Jerome H. Powell characterizes the state of the economy — and the extent to which he flags the worsening pandemic and chaos over the next round of stimulus as risks to the recovery,” Rachel Siegel reports this morning.

“Nobody expects that the Federal Reserve will exercise its main policy tool and change interest rates, which are expected to remain at zero. However, this typical Fed meeting comes as a surge of coronavirus cases has forced states to dial back their reopening plans… That puts particular focus on how explicit Powell will be about the fate of the economy. When the Fed concludes two days of policy meetings Wednesday, he will appear at a virtual news conference at 2:30 p.m."

More from the U.S.:
  • At least 4,272,000 cases have been reported; at least 145,000 have died
  • Home sales and evictions boom: “This summer is one of the best times for home buyers and worst for many renters. Americans with money in the bank are buying bigger homes, while renters increasingly worry about eviction,” Heather Long reports.
  • Manufacturing is regaining momentum, but rising cases may squelch the momentum: “Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 3.3 percent last month, the Commerce Department said. That was the biggest increase in these so-called core capital goods orders since July 2018 and followed a 1.6 percent rise in May,” Reuters's Lucia Mutikani reports.
  • About 4,000 federal employees say they contracted the coronavirus at work — and 60 have died: “About 4,000 federal employees are seeking disability compensation on grounds that they contracted the coronavirus at work, while survivors of 60 deceased employees are seeking death benefits for the same reason,” Eric Yoder reports.
From the corporate front:
  • Big oil braces for awful second quarter: “The expected rare losses for BP, Chevron, Eni, Exxon Mobil, Royal Dutch Shell and Total follow a collapse in oil and gas prices and demand to levels not seen in decades, creating a perfect storm for the energy companies that produce, refine, trade and sell fuel," Reuters's Ron Bousso and Shadia Nasralla report.
  • Google to keep employees home until summer 2021: “That makes the parent company, Alphabet, the first major U.S. company to push its office comeback into the second half of next year,” Hannah Denham reports.
  • Big restaurant chains could see sales rebound: “McDonald’s Corp, Starbucks Corp, Yum Brands Inc and other big restaurant chains could show improving sales, based on early results from rivals such as Chipotle Mexican Grill Inc that improved despite dining rooms shuttered for months,” Reuters's Hilary Russ reports.
  • Albertsons books higher sales: Albertsons said, excluding fuel, sales at stores open at least 15 months rose about 27 percent from a year earlier for the quarter ended June 20. The company, which is the nation’s second-largest grocery chain after Kroger Co., reported that it continues to see higher traffic, demand and sales," the WSJ's Jaewon Kang reports.
  • “Tenet” gets another release date: Warner Bros. is pushing ahead with the release of “Tenet,” particularly internationally,” Steven Zeitchik reports. Christopher Nolan's latest movie will now release internationally on Aug. 26 and in parts of the United States on Labor Day weekend. The film continues to be viewed as a bellwether for other Hollywood blockbusters.
Around the world:
  • Hunger is killing 10,000 children a month, experts say: “Writing in the influential Lancet medical journal, an international coalition said the pandemic has released a tidal wave of childhood hunger and malnutrition that will have long-lasting consequences for education, growth and risk of disease,” Teo Armus reports.
  • Chinese airlines offer “all you can fly” deals to boost business: “With a bevy of terms and conditions but months of unlimited flights for only a few hundred dollars, these deals have boosted bottom lines and put passengers in seats that could otherwise go empty, according to Reuters. Last month, daily flights in China returned to about 80 percent of their levels before the virus outbreak,” Teo Armus reports.
  • Vietnam locks down third-largest city after 15 cases: “All flights in and out of Danang have now been suspended for 15 days, state-run newspaper Chinhphu reported. Entering the city by land is also off-limits, with exceptions for patients seeking health care and people delivering food and other essential goods,"  Antonia Farzan reports.

Campaign 2020

Biden tax plan targets profitable companies that now pay little.

It's one of the ways the former VP would gut Trump's tax law: “On top of higher tax rates, [Biden] would impose a 15% minimum tax on profits reported to investors, a move that would limit companies’ use of popular tax breaks. That minimum tax would raise $400 billion over a decade by the campaign’s estimate, and $166 billion according to the Tax Policy Center,” the WSJ's Richard Rubin reports.

“But critics say [Biden’s] proposal could be counterproductive, partly because it would discourage companies from using tax breaks Congress created to promote investment in some of the very things the former vice president is trying to promote, such as renewable energy, low-income housing and manufacturing.”  

When superpowers collide

Samsung primed to gain as Huawei gets shut out.

The brawl over 5G is providing an opening for the South Korean giant: “The geopolitical squabbling gives Samsung, the industry’s No. 4 player, a major chance to muscle into a telecom-equipment market it considers a pillar for future growth. Though deep-pocketed, Samsung has been a fringe networks player for decades, mostly servicing its home market,” the WSJ's Elizabeth Koh reports.

“Even before the U.K. reversed course this month on its approach to Huawei, Samsung already had made some inroads … In the 5G realm, the South Korean firm controls roughly a seventh of the market where Huawei enjoys more than twice that, according to market research firm Dell’Oro Group."

Market movers

Stocks rise to start the week.

Tech leads the way as investors await another big earnings week: “The Dow Jones Industrial Average gained 114.88 points, or 0.4 percent, to close at 26,584.77. The S&P 500 closed 0.7 percent higher at 3,239.41 and the Nasdaq Composite outperformed, climbing 1.7 percent to 10,536.27,” CNBC's Fred Imbert and Eustance Huang report.

“Apple climbed 2.3 percent. Amazon advanced 1.5 percent after several analysts raised their price targets on the e-commerce giant. Other tech-related stocks, including Facebook, Netflix and Alphabet, also traded higher. Market sentiment was also boosted after the U.S. government allocated an additional $472 million towards Moderna’s coronavirus vaccine research. The stock jumped 9.2 percent.” (Amazon CEO Jeff Bezos owns The Washington Post.)

Pocket change

Under Armour reveals it is under an SEC probe.

Regulators are looking at the sportswear brand's accounting: “Last year, the company said it was cooperating with federal investigators in connection with a probe about whether it shifted sales from quarter to quarter to meet objectives,” Reuters's Aishwarya Venugopal reports.

“While a Wells notice does not necessarily mean the recipients have violated any law, the SEC issues the letter to firms when it is planning to bring an enforcement action against them.”

HSBC aims to double number of senior black staff by 2025: “HSBC aims to double the number of Black staff in senior roles by 2025, Chief Executive Noel Quinn said in an internal memo, as the bank attempts to take action against discrimination and create opportunities for advancement in the wake of the Black Lives Matter movement," Reuters's Sinead Cruise reports.

Walgreens CEO Stefano Pessina to step down: “The current executive chairman, former McDonald’s CEO Jim Skinner, will remain on the board after Pessina takes over,” the Associated Press reports. “The company announced no time frame Monday in finding a successor to Pessina.”

Money on the Hill

Susan Collins says she'll vote against Judy Shelton.

It may take only two more Republicans to sink her nomination: “Collins (R-Maine) joined [Romney] in opposing Shelton’s nomination, which is slated to go for a vote before the full Senate. Collins and Romney alone cannot derail Shelton’s advancement, but the margin is getting thinner for Shelton, who is known for her outspoken criticism of the Fed and her advocacy for a return to the gold standard,” Rachel Siegel reports.

“If the Senate’s Democrats and independents all vote against Shelton’s nomination, her confirmation could be doomed if she loses the support of four Republicans.”

It's Big Tech's turn in the congressional barrel.

Lawmakers are preparing to take on a $5 trillion slice of the U.S. economy: “On Wednesday, the industry’s four most powerful chief executives are set to appear, swear an oath and submit to a grilling from House lawmakers who have been probing the Web’s most recognizable names to determine whether they have become too big and powerful," Tony Romm reports.

"The congressional inquiry has been more than a year in the making. Lawmakers have amassed 1.3 million documents, conducted hundreds of hours of interviews and held five other hearings featuring the industry’s friends and foes. Led by Rep. David N. Cicilline (D-R.I.), the lawmakers plan to produce a report in coming months that some party leaders expect will find the industry has skirted federal competition laws because the protections haven’t kept pace with the digital age.

  • The line-up: The hearing will feature Bezos, as well as chief executives Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Alphabet, which owns Google. All but Bezos have testified before Congress in the past, but they will do so this time under unique circumstances.” 

Trump tracker

Wilbur Ross is out of the hospital.

The Commerce secretary was admitted for non-covid related reasons: “Ross ‘is doing well and resting at home,’ the department said in a statement. ‘We continue to anticipate a quick recovery. He is engaged and involved, business as usual at the Department of Commerce,’” CNBC's Kevin Breuninger reports.

“The 82-year-old Commerce secretary had been working from his home in Palm Beach, Florida, since at least late March. It is unclear what health complications required Ross to be hospitalized.”

Chart topper

Millions of renters are facing evictions as bans on them expire. CNBC's Annie Nova:On Friday, the federal moratorium on evictions in properties with federally backed mortgages and for tenants who receive government-assisted housing expired. The Urban Institute estimated that provision covered nearly 30% of the country’s rental units… And most of the statewide eviction moratoriums are winding down. The proceedings have resumed in more than 30 states. The moratorium in Hawaii and Illinois end this week, and in August, evictions will pick up in New York and Nevada."

Here, via CNBC, is a state-by-state look at the situation:



  • Fed officials begin their two-day meeting
  • 3M, Pfizer, McDonald's, JetBlue Airways, Starbucks, Visa, Wyndam Hotels & Resorts, Aflac, Denny's, eBay and Harley-Davidson are among the notable companies reporting their earnings, per Kiplinger


  • Fed Chair Jerome Powell holds a press conference at the end of the central bank's meeting
  • Boeing, Anthem, Deutsche Bank, Cheesecake Factory, GlaxoSmithKline, O'Reilly Automotive, Six Flags, Spotify, Blue Apron and Yum China are among the notable companies reporting their earnings


  • The Bureau of Economic Analysis releases an estimate for U.S. GDP in Q2
  • The Labor Department releases weekly jobless claims
  • Amazon, Apple, Alphabet, Ford, United Parcel Services, Yum! Brands, United States Steel, Gilead Sciences, Kellogg, Anheuser-Busch InBev, ConocoPhillips, Comcast, Kraft Heinz, Eli Lilly, Grubhub, MGM Resorts International are among the notable companies reporting their earnings


  • U.S. consumer spending for June is released
  • Merck & Co., Caterpillar, Under Armour, AbbVie, Chevron, Fiat Chrysler, Exxon Mobil, Tiffany & Co. and Pintrest are among the notable companies reporting their earnings

The funnies

Bull session