In 2008, Chicago billionaire Kenneth C. Griffin described the "hometown pride" that led him to invite the fledgling presidential candidate Barack Obama to speak to employees at his hedge fund, and beyond that, to raise more than $200,000 to help see Obama elected.
But recently published campaign finance records suggest that his hometown pride has faded. After Obama pushed through major financial reform, some leaders of the investment community like Ken Griffin have voiced their displeasure by serving as big-money backers of Republicans in 2010.
A fresh batch of campaign finance and tax records show Griffin and his wife -- herself a hedge-fund manager -- combined to give $500,000 to American Crossroads, the so-called Super PAC organized by Karl Rove to defeat Democratic candidates in the mid-term elections. Griffin also donated directly to GOP senate, House and gubernatorial candidates, and to such political committees as the "Every Republican is Crucial PAC."
Though he was notable as a "bundler" who raised big sums for Obama, Griffin has donated millions to politicians from both parties over the years, including writing a check to Obama's 2008 rival, Sen. John McCain. A spokeswoman with Citadel Investment Group, the Chicago-based firm whose performance has helped place the 41-year-old Griffin at number 149 on the Forbes list of the wealthiest Americans (with an estimated $2.3 billion fortune), said she had no comment on Griffin's latest preferences. But in helping assist a GOP resurgence that put Republicans back in charge of the House, Griffin is hardly alone.
Records show American Crossroads brought in numerous large contributions from heavy hitters in the financial industry. Jonathan Collegio, the communications director at American Crossroads, said many of the group's donors have been looking to blunt Obama's Wall Street initiatives.
They are "folks who are deeply concerned about the direction of the country, and who saw the 2010 elections as an opportunity to put the brakes on the Obama agenda in Congress," Collegio told ABC News. "They believe in our goals of promoting free markets, free enterprise, and limited government."
Hedge Fund Money Shifts To Republicans
While Obama out-performed Republican John McCain in coaxing contributions from Wall Street donors in 2008, the trend lines have reversed at the midpoint of his term. Three-quarters of the donations made by Goldman Sachs employees went to Democrats in 2008, according to records compiled by the Center for Responsive Politics. In 2010, the company's employees swung 60 percent of their contributions behind GOP candidates.
The campaign finance records show a similar trend for other major Wall Street firms, such as J.P. Morgan and Citibank. Top executives at hedge funds, in particular, ponied up big donations to the Republican groups that underwrote this year's Republican political resurgence. Democratic Party officials say the shift was expected.
"It's not surprising that those who profited handsomely from the most irresponsible practices of Wall Street that dealt crushing blows to our economy are giving handsomely to those who promise to repeal the new reforms that end those very practices," said Hari Sevugan, a DNC spokesman.
Prominent among those who have migrated to the GOP are hedge-fund managers who have been battling Democrats over legislation targeting their industry.
Hedge-fund managers in many instances wrote five- or six-figure donations, taking advantage of loosened restrictions on giving that followed a pivotal Supreme Court ruling. The private investment firm Dalea Partners, for instance, helped bankroll the First Amendment Alliance with a $250,000 donation. The alliance, in turn, spent $1.3 million on advertising that attacked such Democratic candidates as Nevada Sen. Harry Reid, who won, and Kentucky candidate Jack Conway, who lost.
A spokesman with Dalea Partners, Joe Cusimano, declined to comment on the reasons behind the company's contributions.
Lobbyists in Washington and members of congress have engaged in a pitched battle over the way hedge-fund managers are taxed. In May, the Democrats leading the House helped push through legislation aimed at changing the way taxes are calculated on the portion of investment fund gains that are turned over to fund managers as compensation.
Rep. Tim Bishop, D - New York, voted for the measure. He then faced $360,000 in advertising financed by another conservative super PAC, called Alliance for America's Future. The ads attacked Bishop and supported his GOP opponent, former hedge-fund executive Randy Altschuler. That race, which was too close to call on election day, is among the few remaining undecided races from the 2010 mid terms.