Maryland investment firms haven't abandoned Democrats

Wall Street might have turned its back on Democrats this election, but that's not the case among Maryland investment firms.

The vast majority of contributions to candidates by T. Rowe Price employees went to Democrats. And Democrats were the beneficiaries of all candidate donations by Brown Capital Management workers — with President Barack Obama receiving the bulk.


But even in this deep-blue state, Democrats don't have a lock on political contributions. The top recipient of donations by Legg Mason employees: Republican presidential challenger Mitt Romney.

This is expected to be the most expensive election ever and, as usual, employees in the investment and securities industry — or Wall Street — will be one of the largest sources of money.


Nationally, Wall Street employee contributions to candidates, parties and political action committees have reached $192.9 million this election cycle, already smashing the 2008 record by about more than $22 million, according to the latest figures from the Center for Responsive Politics, a Washington-based nonprofit that tracks money in U.S. politics using data from the Federal Election Commission.

Four years ago, 57 percent of the money from Wall Street employees went to Democrats, the group said. Now the tables have turned. Nearly 70 percent of the dollars in this 2011-2012 election cycle are going to Republicans.

One reason for the reversal is that Republicans now have a solid majority in the House, and Wall Street contributors want to keep that by backing GOP incumbents, said Lee Drutman, a senior fellow with the Sunlight Foundation, a Washington-based nonprofit that advocates for government transparency.

Wall Street executives also have soured on Obama, who once called them "fat-cat bankers" and signed into law the Dodd-Frank Wall Street Reform act, which restricts financial institutions' activities. The Sunlight Foundation reported last year that at least a dozen bills to repeal or change Dodd-Frank had been introduced in Congress — all by Republicans.


"People on Wall Street feel that Obama has demonized them unfairly … and that Obama hasn't given them the respect that they deserve," Drutman said.

And many at securities and investment firms just feel more comfortable with Obama's opponent.

"Romney is one of their own. He hails from the private equity industry and is seen as someone who understands … the challenges in the industry," said Sheila Krumholz, Responsive Politics' executive director.

That said, Krumholz added, money from Wall Street likely will pour into the Obama campaign near Election Day if it appears the president will win.

Many executives at Maryland investment firms would not comment about their political donations. But when these executives and their employees give, it's often to incumbent congressional candidates. And in Maryland, that means mostly giving to Democrats, who hold both Senate seats and six of the eight House seats here.

This makes sense if the strategy is to maintain access and friendly relations with incumbents in safe races, said Sunlight's Drutman. "There's no point in giving to the opponent and … upsetting the incumbent."

At Baltimore-based T. Rowe Price, for instance, 83 percent of the $97,600 donated to candidates by employees went to Democrats, according to Responsive Politics' most recent figures. The top recipient is incumbent Maryland Sen. Ben Cardin, raking in $22,500.

Among Price's top management, the most generous contributor is Vice Chairman Edward C. Bernard, who gave heavily to Democrats — though not exclusively.

He donated $5,000 each to Cardin, Maryland Rep. John Sarbanes and Ohio Rep. Betty Sue Sutton, and $2,000 each to Maryland Rep. Steny H. Hoyer and Delaware Sen. Tom Carper — all Democrats. His one donation to a Republican was $1,000 to Utah Sen. Orrin Hatch, who this year faced his first primary challenge in decades.

In addition, Bernard gave $17,900 to the Democratic National Committee and $10,000 to the political action committee of the Investment Company Institute, a lobby for the mutual fund industry. The ICI PAC, in turn, has given to Maryland Democrats.

But top managers don't necessarily donate in lockstep with each other or with the rank and file.

Price Chairman Brian Rogers gave mostly to GOP candidates this election cycle — $5,000 each to Romney and Republican House speaker John Boehner, $2,500 to Romney Victory Inc., and $1,000 to Romney's running mate, Wisconsin Rep. Paul Ryan. Rogers also donated $2,000 each to Democratic Sens. Cardin and Carper.

Rogers said in an email that he doesn't publicly comment on his political activity. That said, Rogers noted that "person is more important than party," and that all the people he gave to this election cycle are "smart folks interested in pursuing pragmatic solutions to our serious fiscal issues."

Top executives at Legg Mason aren't big contributors, although the most active donor is Mark Fetting, who recently stepped down as chairman and CEO. Fetting gave strictly to Democrats this cycle, contributing $5,000 to Sarbanes, $2,500 each to Cardin and Hoyer, and $2,000 to Rep. C.A. Dutch Ruppersberger. He also contributed $10,000 to the Investment Company Institute's PAC.

Also, Legg's political action committee donated $5,000 each to Hoyer and Cardin.

But Fetting's contributions aren't in line with Legg employees' overall or, for that matter, with those of Nelson Peltz, the shareholder activist on Legg's board who is believed to have influenced Fetting's decision to step down.

Among Peltz's donations: $30,800 to the Republican National Committee; $50,000 to the Romney Victory Inc.; $25,000 to the super PAC Restore our Future, which is backing Romney; and $5,000 each to Romney and Herman Cain, a candidate for the Republican presidential nomination.

Legg employees generally lean Republican. Of the $119,900 donated by employees to candidates, 69 percent went to Republicans, Responsive Politics reported. Romney is the top recipient, collecting $30,600.

In second place — which may seem an odd choice from Baltimore-based Legg — is Illinois Rep. Joe Walsh, a Republican. A tea party favorite, Walsh frequently makes headlines for controversial comments, such as his suggestion that his opponent, Tammy Duckworth — a pilot who lost her legs in the Iraq war — was not a true hero.

Legg employees donated $10,000 to Walsh, half of which came from Stephen Walsh, chief investment officer with Western Asset Management, a Legg subsidiary in California.

"It's my brother, whether I agree with every one of his comments or not," Stephen Walsh said. "I would support any family member."

Added Stephen Walsh: "Everyone hassles me. I get every update. 'Your brother said something crazy last night.' I would say, 'OK.' "

Stephen Walsh said he doesn't give to politicians besides his brother. But he added that the switch in Wall Street's contributions this election season is not surprising.


"You would expect to see some sort of shift given the anti-bank or anti-Wall Street approach the administration is taking," Walsh said.


Not everyone in high finance agrees.

"Wall Street is broken," said John P. Hussman, president of Hussman Funds in Ellicott City. "The financial system has turned into something akin to a casino."

Hussman gave $2,500 last year to liberal Democrat Elizabeth Warren, who helped launch the Consumer Financial Protection Bureau and now is running for a U.S. Senate seat in Massachusetts. At the same time, he donated $2,500 to conservative Republican Rep. Scott Garrett of New Jersey, who sits on the House Committee on Financial Services.

It's an unusual pair of contributions, but Hussman said both candidates favor "careful oversight" of the financial sector.

Hussman, who donated generously to Obama in 2008, hasn't abandoned the president, either. This election cycle he has given $5,000 to Obama, $20,000 to the Obama Victory Fund, as well as $15,000 to the Democratic National Committee.

"My concern is that Mitt Romney will push us further in the direction of treating financial institutions with kid gloves," Hussman said.

The president also has the backing of those at Brown Capital Management in Baltimore. Workers at the Baltimore-based investment firm donated $38,500 to candidates, with Obama receiving $32,000, Responsive Politics reported.

Founder and CEO Eddie C. Brown donated $30,800 to the Democratic National Committee, $45,800 to the Obama Victory Fund, $5,000 to Obama, $1,000 to Cardin and $500 to Rep. Elijah Cummings.

Many financial companies in Maryland, however, haven't donated.

"It's not our thing," said James Hardesty, chairman of Hardesty Capital Management in Baltimore. Besides, he added, the incivility and gridlock in Washington are reasons not to pull out the checkbook.

Still, Hardesty has made an exception before, when he donated in the 1990s to support an old college friend — Bill Clinton.