For those of you Watergate fans, remember the phrase “follow the money,” which is what Deep Throat whispered to Washington Post reporter Bob Woodward in a garage.
Following the political money in the Wall Street meltdown is in itself an interesting exercise.
The key player, of course, is Secretary of the Treasury, Hank Paulson, who is spearheading the $700 billion bailout proposal. Critics are crying foul because he comes from Wall Street where he was head of Goldman Sachs and many of his proposals clearly benefit his cronies.
The bailout plan, which would give Paulson or a successor nearly unlimited, Czar-like power to stroke public checks for any bad debt he wants, is under fire by Democrats. They are complaining that the plan does nothing to limit executive compensation or help Main Street homeowners. Their complaints caused the market to plunge 370 points on Monday.
Leading the charge is U.S. Rep. Barney Frank of Massachusetts who is head of the House Financial Services Committee and a self-styled populist. The other is Christopher Dodd of Connecticut who is head of the Senate Banking Committee.
A check with the Center for Responsive Politics database shows that the top political campaign donors for both legislators are, you guessed it, from some corner of the financial industry.
Dodd has gotten $4.2 million from the securities and investment community and $1.9 million from lawyers, $1.4 million from insurance and $1.2 million from real estate.Those are his top donors by industrial sector in 2008
Frank has received $182,000 from the real estate industry, $176,400 from the securities and investment industries, $167,000 from lawyers and $155,000 from insurance firms. Those are his top four donors by industrial sector in 2008.
To be sure, both men come from states where finance is extremely important. Connecticut is home to many insurance firms. The area near Boston, which comprises part of Frank’s congressional district, is home to several powerful investment houses.
This isn’t to say that they are necessarily in the pockets of finance. Just because politicians get money from an interest group doesn’t mean they will vote their way. For example, Frank, regarded as one of the brightest minds on Capitol Hill, is never afraid of saying what he thinks. He took over Financial Services after the 2006 election, but has tempered his influence by combining his sharp knowledge of finance with his populist sentiments. On details, he is regarded as professional and collaborative. But he still gets a lot of his money from finance.
Ditto Dodd, although he isn’t regarded as dynamic as Frank seems to be.
But no one, it seems can get away from campaign money. Verily, that is the way of the world. It’s important to be aware of it, however.
