Goldman Sachs Goes Republican
WATCH Business Report (07.23.10)

If you needed a reminder that Wall Street and Washington make the strangest of bedfellows, new research shows that Goldman Sachs donated more money to Republicans than Democrats for the first time in decades.

The latest data from the Washington D.C.-based Center for Responsive Politics shows that Goldman has doled out roughly $914,000 to Republican candidates compared to about $776,000 to Democrats in this year's election cycle.

"I think that Wall Street and other large donors have become not too much unlike the electorate at large – sort of willing to change," said Jennifer Duffy, senior editor of the Cook Political Report, one of the nation's leading non-partisan political handicappers.

The shift is all the more striking considering that in a 20-year period covering 11 election cycles, Goldman donated nearly $21 million to Democrats, almost double the $12 million it gave Republicans, according to data released by the Center for Responsive Poltics last week.

"They're shorting the Obama administration," said Nell Minow, co-founder and editor of the Corporate Library, a governance research firm. "It is quite clear that the best friends of Wall Street are in the Republican Party, particularly in this midterm election. One thing that Goldman knows is which way to bet."

A Goldman spokeswoman declined comment.

The pro-Republican tide is not surprising, considering how the industry saw the Democrats' financial reform legislation as heavy-handed and anti-Wall Street. As recently as 2008, about 3 out of every 4 dollars in political donations from financial industry members and political action committees went to Democrats.

The financial industry will surely side with Republicans in the latest skirmish with the White House over Bush-era tax cuts. Senate Republicans this week vowed to block any effort to renew Bush administration tax cuts if upper income taxpayers are excluded from the reductions. Obama would renew the tax cuts for most people, but let the top income tax rate rise back to almost 40 percent on family or small business income over $250,000.

Goldman Sachs Gives More Campaign Money to Republicans

"Wall Street and related industries are hedging their bets with Republicans so that if Republicans do take power, they're going to be at least partially on that winning team," said Dave Levinthal, editor of the Open Secrets blog for the Center for Responsive Politics, which analyzes political contributions. "Republicans, certainly in their rhetoric and action, are offering an attractive alternative to folks in the financial industry. Clearly, those people on Wall Street are speaking with their pocket books."

According to the Center, nearly two-thirds of the top 25 recipients of Wall Street contributions were Republicans. Among the top ten, only two Democrats made the list – New York Senators Charles Schumer and Kirsten Gillibrand.

Goldman is the largest political donor on Wall Street, with donations of $1.6 million among various candidates during the 2010 election cycle.

The Cook Political Report has predicted Republican gains of at least 40 seats in the House this November. The GOP must gain 39 seats to retake the majority.

"It's about sort of growing apart with the party they had supported over the years and looking to Republicans for a little bit more agreement on the issues that affect them the most," Duffy said. "I'm sure that they've been unhappy about being so demonized in the financial meltdown, not that I'm convinced that they have a right to be unhappy about it."

Last month, an for Responsive Politics analysis of financial industry contributions to senatorial campaign fundraising arms and to candidates in a dozen key races revealed a distinct fiscal alliance between Wall Street and Republicans.

During the first six months of the year, bankers, brokers and money managers -- individually and via Political Action Committees -- have contributed twice as much to GOP Senate candidates than to Democratic ones.

Through June 30, roughly $7 million in campaign contributions travelled from the pockets of financial industry members into the National Republican Senatorial Committee, the Democratic Senatorial Campaign Committee, and to the candidates in pivotal Senate races in Arkansas, California, Colorado, Delaware, Illinois, Indiana, Kentucky, Missouri, Nevada, North Dakota, Ohio and Pennsylvania. More than two-thirds of that cash went to Republicans.

Among the 10 individual Senatorial candidates who got the most cash from Wall Street, seven were Republicans.

"What's happening with Goldman is indicative of what's happening with the broader financial industry," Levinthal said.