Thursday, July 19, 2007

Following the Money

John Edwards gets flack for his $400 haircut and his expensive house. The $122,650 he raised in the second quarter of 2007 from employees of Fortress Investments, the New York hedge fund where he used to work as a consultant, is more worrisome. So too is the $53000 and change he got from employees of Lerach Coughlin and the $48,400 he received from the Watts Law Firm. But this is small potatoes next to Barack Obama.

Like Edwards, Obama raised a lot of money from grassroots supporters; his campaign makes sure everyone knows about it too. But, as a Financial Times analysis of the second quarter financial reports makes clear, the “finance sector” is heavily invested in the Obama campaign. Lehman Brothers, Goldman Sachs, and JP Morgan Chase are among his biggest sources of support. In addition, the multi-billionaire founder and chief executive of Chicago-based Citadel Investment Group, Ken Griffin, gave Obama the maximum $4600 permitted under the election laws, while Citadel employees contributed another $147,550.

It should be noted, in fairness, that, despite the support he is getting from hedge fund managers and private equity executives, Obama announced that he would co-sponsor legislation to close a loophole that allows them to avoid paying corporate income taxes. John Edwards was the first major Democratic contender to come out in favor of this proposal, and even Hillary Clinton has followed suit.

One might have thought that the emperors of high finance would be more loyal to the Clinton family, after all Bill Clinton did for them. Instead, it seems they’re betting on Obama, while hedging their bets. Clinton’s top contributor was the DLA Piper law firm; they gave her $190,170. Next in line were Kirkland and Ellis at $104,300 and Cablevision at $93,675. On the Republican side, the finance sector’s favorite, according to The Financial Times, is Mitt Romney. However he only got a mere $62,000 from Merrill Lynch, his top contributor. [He also received $1.4 million in the second quarter from persons living in the state of Utah, an unprecedented amount. Evidently Mormon interests are mobilizing behind his godly candidacy.]

But the money boys are betting on the Democrats, big time, and on Obama in particular. This should be of concern for those who look to Obama to carry forward the anti-Clintonite banner (see “Combat Clintonism!” April 27) or who see benefits for “the wretched of the earth” in the mere fact of his candidacy. [See “What a Little Kindness Can Do,” July 18].

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