A memo sent out to vice-presidents and higher-level employees at Barclays Capital provides a rare glimpse into how Wall Street flexes its political muscles around election times.
While Wall Street has traditionally been regarded as a bastion of free-market Republicanism, this impression has largely been disproved in recent years. Wall Street invested far more in Democratic candidates and campaigns in the 2008 election cycle, when Barack Obama was elected president.
Goldman Sachs , for instance, saw 75 percent of its donations go to the Democratic political machinery in 2008. And in this cycle, the latest figures available show 54 percent of Wall Street contributions going to Democrats. The political action committee money is even more skewed toward Democrats, with 57 percent hitting in that direction. (Those numbers don't include the third-quarter contributions, which may have balanced out the numbers a bit.)
Nonetheless, Wall Street did make a relative turn toward the Republicans. Fifty-seven percent of Goldman's donations went to Republicans this year. (Again, this number doesn't count third-quarter political donations.)
That kind of turnaround would be remarkable since it reflects not just PAC money, which is controlled by the management of the firms, but the individual donations by employees. How do so many employees turn at once for or against a party?
Obama's anti-Wall Street rhetoric probably did not help his party. The same for his party's sponsorship of the Dodd-Frank financial reform act, which many feel will reduce profitability on Wall Street.
But something more was at work than just individual reactions to the stance of the Democratic party. Employees at Barclays Capital received a memo from management in the weeks leading up to the election advising that they pool their donations with other employees, according to a person at the firm. They even had the option of having the campaign contributions deducted directly from their paycheck, the person said. It was not clear to our source whether this money would simply be bundled with other contributions or go to a political action committee.
This practice is not unique to Barclays. In fact, it is common practice in Wall Street firms, people at several firms say. At Barclays, junior employees and support staff are not asked to donate. Only vice-presidents and higher are solicited. The memo even gave suggested donations for each level of employee. Directors, for instance, were expected to give more than vice-presidents.
It is apparently quite legal, even if it does rub some employees the wrong way.
"We found it pretty offensive. It makes Wall Street seem every bit as politically conniving as we're made out to be," the Barclays employee said.
Barclays could not immediately be reached for comment on the story over the weekend.
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