As observed in various forums, many people believe that without substantial donations from the financial institutions, 2008 would have witnessed a McCain ascendancy to President. Even Noam Chomsky has claimed that FI donations alone account for Obama’s superior campaign funds, and hence they are responsible for his victory1. At the onset of his reelection campaign, it is important to assess his policies in context of donations of 2008 and before 2012.  It is my intention to provide an (admittedly brief) overview of FI donations (both of lobbyists and individuals) to Obama and the extent to which they affected the 2008 election.

Although the tag hasn’t caught on as a slogan, Obama has always been ‘Wall Street’s Guy’2. As a first-time senator, Obama was ostensibly less opposed to the influences of lobbyists and Wall Street than when he stated ‘I don’t take a dime of their money’3. Well before announcing (and perhaps planning) his presidential campaign, Obama had accepted over $100K from Fannie Mae & Freddie Mac4. These donations continued through the campaign: OpenSecrets estimates that Obama’s 2008 campaign received just under $26M from the Banking, ‘Securities and Investment’ and ‘Miscellaneous Finance) industry lobbyists, nearly double that of McCain’s campaign5. These statistics are (obviously) limited to those disclosed, and OpenSecrets also lists $26M of undisclosed company donations for Obama, compared to McCain’s $17M. Adding these figures, in a non-existent extreme case, Obama’s total donations from the financial industry would be $52M, four times that of McCain. In any eventuality, the dichotomy between candidates (which is being replicated in the lead up to the 2011 campaign) supports the label of Obama as ‘Wall Street’s Guy’.

Any political label is subjectively interpreted according to the ideological eye of the beholder, and so Obama’s ‘true’ label must rely on the donations in context of the entire campaign. Obama raised (and spent) nearly $750M, doubling McCain’s measly $340M. Thus, if all of the FID from lobbyists were evaluated as a percentage of the whole, in the most extreme scenario, the FI paid for approximately 7% of the campaign. Had they not donated, Obama would still double McCain’s campaign, and if they had donated only to McCain, Obama would retain a $300M advantage.

According to the ‘Campaign Finance Institute’, Obama raised over $450M from individual donations6. Tallying figures from OpenSecret, employees of various FI donated just under $3M7, not even 0.7% of the total. We are thus left with $447M individual donations unaccounted for. One third of this was from donations over $1,000 (compared with 1/2 for McCain’s campaign)8. CNN notes that the largest ‘individual’ donation to Obama ‘by far’ was $1.5M (University of California)9. This means that of the 1/3 who donated individually more than $1,000, the vast majority were significantly closer to $1,000 than to $0.5 M. Thus, of the $450M, it is inconceivable that less than $430M was donated by non-financial institution affiliated individuals. The bulk of the financial donations occurred in the later stages of the campaign, so it is also false to ascribe any indirect effect to these donations. Hence, the vast majority of Obama’s campaign donations had nothing to do with financial institutions.

Because $430M is greater than McCain’s total campaign spending of $340M, it is simply wrong to assert that Obama ‘owes’ his victory to financial institutions. Of the total $750M Obama spent, it is impossible that even $100M was garnered from the financial sector. Even if this was possible, it would mean that only 13% of the total campaign was funded by the sector. It is true to say that Wall Street overwhelmingly preferred Obama to McCain, so from their perspective Obama is ‘Wall Street’s Guy’. But is categorically false to claim the reverse: that without their funding McCain would have won the election. Thus, from the perspective of an impartial source, Obama is not ‘Wall Street’s Guy’, unless one believes that me buying 13% of Google’s means that Google is ‘Seb’s guy’.

SOURCES:

OpenSecrets.org (run by the Centre for Responsive Politics) the authoritative source on any political donations.

1 http://www.youtube.com/watch?v=MuqLptTzll8
2 http://www.washingtonpost.com/politics/obama-has-more-cash-from-financial-sector-than-gop-hopefuls-combined-data-show/2011/10/18/gIQAX4rAyL_story.html
3 http://abcnews.go.com/blogs/politics/2011/10/obama-campaign-bundlers-have-ties-to-lobbying-industry/
4 http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html
5 http://www.opensecrets.org/pres08/indus.php?cycle=2008&cid=N00009638
6 http://www.cfinst.org/press/PReleases/08-11-24/Realty_Check_-_Obama_Small_Donors.aspx
7 http://images.opensecrets.org/obama_top_contribs.htm?cycle=2008&cid=N00009638
8 http://www.cfinst.org/press/PReleases/08-11-24/Realty_Check_-_Obama_Small_Donors.aspx
9 http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM:POLITICS

---