News & Current Affairs

June 8, 2008

Big business in US prefers Democrats to Republicans

WASHINGTON: For the first time in a generation, most major US business sectors are donating more campaign money to Democrats than to Republicans, according to a political fund-raising watchdog group.

Six of 10 business sectors tracked by the Centre for Responsive Politics had given more money to Democrats as of late April in all federal races, marking a shift over the past year with profound implications for Republicans.

For as long as the non-partisan centre has tracked donations by sector, beginning in the late 1980s, Republicans have enjoyed an edge in giving among a majority of sectors. Today, only four of 10 sectors still lean Republican, a party that has long traded off a reputation as being “pro-business”.

“It reflects both the dismay in the business community with the Bush record and the state of the economy, and the fact that Democrats control both houses of Congress,” said Norman Ornstein, a resident scholar at the American Enterprise Institute, a conservative think-tank.

Energy, construction, transportation and agribusiness continue to send more money to Republican candidates, based on the centre’s most recent analysis of Federal Election Commission records for the 2008 election cycle.

Democratic-leaning sectors include lawyers, health care, defence, communications and electronics, and the massive finance, insurance and real estate sector, as shown by data on the centre’s website at http://www.opensecrets.org. A sixth “miscellaneous” sector also leans Democratic and includes retailers, food and beverage, chemicals and a wide variety of other business services and manufacturing concerns.

“There are two factors at work here,” said Douglas Weber, a senior researcher at the centre.

“First is that the Democrats have taken control of Congress. Second is that Democrats have dramatically out-raised Republicans in presidential fund-raising, and presidential fund-raising is at a higher level than we’ve ever seen.”

In the 2008 election cycle, $1.3 billion has been raised in federal races by both parties, with the presidential race accounting for two-thirds of that, the center said.

“Both Clinton and Obama have each raised over $200 million,” Weber noted.

The centre analyses giving by sector based on donations made by the employees of companies, those employees’ families, and companies’ political action committees (PACs).

No company has been the source of more political donations in this election cycle than Goldman Sachs Group Inc, the powerhouse Wall Street investment bank, with donations of more than $3.6 million 73 per cent of it going to Democrats.

With the markets struggling through a deep housing slump, other Wall Street firms are on the centre’s list of the 100 largest contributors, including Citigroup Inc, JPMorgan Chase & Co, Morgan Stanley, UBS AG and Lehman Brothers Holdings Inc all of them giving more to Democrats.

“The terrain is heavily tilted against Republicans at all levels for 2008,” Ornstein said.

“This does not mean that business leaders are suddenly becoming Democrats my guess is that if there were a 50/50 chance, even a 40/60 chance, of Republicans recapturing the House or Senate, the donation patterns would be different.”

Howard Reiter, head of the political science department at the University of Connecticut, added that both Obama and Hillary until this week are “not hostile to business interest in general”.

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