Why It’s OK to Accept Wall Street Campaign Cash

By Bill Scher
What do Hillary Clinton, Barack Obama, Franklin Roosevelt, Teddy Roosevelt and Woodrow Wilson all have in common? They all accepted campaign contributions from Wall Street tycoons. And, for those on that list who have already been president, all successfully imposed regulations on corporations anyway.

“There is a reason why these people are putting huge amounts of money into our political system,” said Sen. Bernie Sanders during last week’s Democratic debate. True enough. But the reasons why Democrats take it, and what that money buys, is a more complicated matter.

The modern Democratic Party, while never the party of Big Business, has long been financed by a combination of large and small donors. In 1912, Woodrow Wilson’s presidential campaign made a concerted push for small donors, attracting an impressive 90,000 contributors. But more than two-thirds of the money raised came from a handful of millionaires including Wall Streeters Henry Morgenthau, Jacob Schiff, and Bernard Baruch.

The Internet Age has dramatically changed fundraising in the ensuing 100 years—or has it? On one hand, then-Sen. Barack Obama was able to tap nearly 4 million individual donors in 2008. On the other, when it came to actual dollars donated, the share coming from small donors was a similar one-third. Not only did some of Obama’s top bundlers hail from the world of finance, but he also took in almosttwice as much Wall Street money as his Republican opponent, John McCain.

Sanders doesn’t name-check Woodrow Wilson on the trail, perhaps because the Wilson administration prosecuted his socialist hero Eugene Debs and imprisoned him. Sanders does, however, lean heavily on the two Roosevelts in making the case for his platform. Yet both of them tapped the financial industry to make it to the White House.

Approximately 25 percent of FDR’s donations in 1932 came from Wall Street. For the progressive Republican Teddy Roosevelt, the extent of his reliance on Wall Street was kept secret during his successful 1904 campaign. It was only fully revealed in the midst of his 1912 third-party challenge with this scathing headline:“Wall Street Favored Roosevelt, Admits Monster 1904 Slush Fund.” J.P. Morgan himself ponied up $150,000. The Standard Oil monopoly gave $100,000 while the question of whether Roosevelt would bust them up was up in the air.

Why did these supposedly liberal champions take all this corporate money? Well, there is the little matter of winning. In the 2012 campaign, the first of the Citizens United era, Mitt Romney and his allied super PACs spent just over $1 billion trying to win the White House. How did Obama survive? By spending the same amount, making sure his message could not be drowned out. And as good as Obama’s small-donor base was, it couldn’t produce $1 billion by itself.

But is it a deal with the devil? What do these corporate donors ultimately get?

Sometimes nothing. Standard Oil, for example, still got busted up by Teddy Roosevelt. “We bought the son of a bitch, but he wouldn’t stay bought,” groused top donor and steel magnate Henry Frick.

More often, as Obama plainly said to anybody paying attention in his famous 2008 “Yes We Can” speech, “they get a seat at the table, they don’t get to buy every chair.”

Democrats can’t solely cater to corporate interests; then their small donors would take a hike. But neither can Democrats dismiss their pleas and risk all of Corporate America unifying behind the Republicans. In the end, the interests of Democratic big donors and small donors have to be reconciled through compromises.

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