U.S. Sen. Kay Hagan has received $962,000 since 2008 from employees and political action committees of industries that are under the jurisdiction of the Senate Banking, Housing and Urban Affairs Committee, where she has served for a large portion of her first term in Congress.
The industries are some of the biggest sources of money for both Democrats and Republicans. Historically they’ve been particularly generous to members of the committee and its House of Representatives counterpart, the Financial Services Committee.
An examination of the financial sector’s campaign finance contributions in this year’s highly competitive North Carolina Senate race, tallied and analyzed by the nonpartisan Center for Responsive Politics, shows that Hagan’s Republican opponent, Thom Tillis, also has collected large sums from some of the same industries. The sector’s political action committees, however, have given more to Hagan.
Sarah Bryner, the center’s research director, said that PACs tend to support incumbents, especially those they think have a chance of winning.
“She’s a known entity, and they have relationships with her already,” Bryner said.
The North Carolina Bankers Association PAC hasn’t contributed to Hagan’s re-election campaign, but it has given to the American Bankers Association PAC, which in turn has given $10,000 to Hagan, the maximum it can give in a six-year Senate election cycle.
“We haven’t had any obstacles of any kind with Sen. Hagan,” said Thad Woodard, president and chief executive officer of the North Carolina Bankers Association. “She has supported regulatory relief bills all along. ... She hasn’t really championed anything for us, but she hasn’t opposed anything, either.”
Hagan also pushed for the tobacco buyout plan, which helped both tobacco farmers and the agricultural banks they deal with, he said.
A key issue now for the banking industry, Woodard said, is too much costly regulation for smaller community banks. But partisan gridlock has stopped much of the action in Congress.
“As far as getting anything done, it’s like pushing boulders,” Woodard said. “She can’t get it done and neither can anyone else until the situation changes.”
Hagan is one of six senators, Republicans and Democrats, who have received the maximum amount from the American Bankers’ Association, one of the most powerful lobbying groups in Washington. None of the other senators is on the banking panel.
The association ranks 12th among PACs that have contributed the most money so far in the current midterm political cycle. Tillis, speaker of the North Carolina House, has not been among the recipients of its largesse, according to Federal Election Commission records.
Jeff Sigmund, vice president for public relations with the American Bankers Association, declined to discuss the PAC’s preferences.
Asked about the financial support that Hagan has received from the financial industry, campaign spokeswoman Sadie Weiner said, “From working to end payday lending in North Carolina to supporting the largest reform of our financial system since the Great Depression, Kay has always been focused on making sure consumers have the information and resources they need to build sound financial futures.”
PACs of commercial banks, a credit union, finance and credit companies, and securities and investment firm have given Hagan $363,000 since she came to Capitol Hill in 2009, according to the Center for Responsive Politics.
Eighteen of those PACs have given her the maximum of $10,000. Among those are the PACs of some of the nation’s largest financial institutions: JP Morgan Chase & Co., Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs Group.
Tillis has received $37,200 from the sector’s PACs, all in 2014 since he became a candidate in the race. The only $10,000 maximum was from the American Financial Services Association.
Hagan has been a member of the committee since 2011. The post fits with North Carolina’s interests. Charlotte is a leading U.S. financial center, with Bank of America’s headquarters and large Wells Fargo operations. The Triangle is home to First Citizens Bank, and numerous smaller regional and community banks cover the state.
But besides, banks, savings and loans and investment and securities, the Senate Banking, Housing and Urban Affairs Committee also has jurisdiction over the insurance, real estate and accounting industries, credit firms, and hospitals and nursing homes.
While individuals donate for many reasons, including ideology, Bryner said that PACs tend to contribute to maintain relationships with people in power.
Hagan was familiar with the financial industry before she set foot inside the Senate Banking Committee chamber. After graduating from the Wake Forest University School of Law, she worked for 10 years at North Carolina National Bank, a predecessor to Bank of America. She became a vice president in the estates and trust division.
Tillis, too, has a financial background. He became a partner in 1996 for what was at the time Price Waterhouse, one of the nation’s biggest accounting and consulting companies, where he advised a bank and was for a time a member of the company’s financial services practice, according to his official biography and resume.
Focused on oversight
The banking committee earlier this year passed legislation that would make changes in the housing finance system by replacing government-sponsored mortgage enterprises Fannie Mae and Freddie Mac with a privately capitalized system.
Supporters say the new system would better protect taxpayers from future economic downturns. Hagan voted in favor of the legislation in May when the committee sent it to the full Senate. It has not yet gotten a vote. The committee also recently has considered nominations, such as that of Janet Yellen, who was confirmed to lead the Federal Reserve System. Hagan supported her appointment.
With Congress in gridlock on so many issues, much of the committee’s work has been oversight, particularly over the rules being written to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. The 2010 bill overhauled the financial industry and created the Consumer Financial Protection bureau, which Hagan supported and about which the financial services industries voiced some concerns.
Four years later, the rule-making for Dodd-Frank is not yet complete. Public Citizen, a nonprofit group that advocates for consumer interests on Capitol Hill, has argued that industry groups have delayed and tried to weaken the law.
“Unfortunately, it’s not atypical to see a concentration of contributions to members of committees of jurisdiction over Wall Street and the banking industry,” said Lisa Gilbert, Public Citizen’s Congress Watch division director. “We can’t draw a direct correlation between those contributions and decisions made by members. But certainly the power to do things industry wants, including trying to get another bite of the Dodd-Frank apple, lies with these senators and (House) members, so it makes sense for them to invest more there when they play a part in politics.”
Other senators – Democrats Elizabeth Warren of Massachusetts and Maria Cantwell of Washington, independent Angus King of Maine and Republican John McCain of Arizona – wrote in an op-ed in July that Congress hadn’t done enough to reduce the risk of another financial crisis.
The four support the 21st Century Glass-Steagall Act, which would make banks smaller and less complex and less able to rely on federal depository insurance to protect them from high-risk activities.
Hagan doesn’t believe that the legislation would prevent another financial crisis and doesn’t support it, her office said.
Frank Keating, president and CEO of the American Bankers Association, said in 2012 that he opposed proposals such as Glass-Steagall that would reduce the size of the nation’s largest banks, and argued that the law would not have prevented the financial crisis.
Tony Plath, an associate professor of finance at UNC Charlotte, said Hagan has been “trying to thread that needle between support for the Obama administration and not trying to offend the banking industry.” Plath described himself as a Libertarian-leaning Republican.
Donations for both
The financial sector – including insurance, real estate, securities and investment and commercial banks – contributes to both Republicans and Democrats, but favors the former; in the current election cycle, Republicans have received $90 million to the Democrats’ $59 million, according to contribution reports filed to the Federal Election Commission and tallied and analyzed by the Center for Responsive Politics. It counted donations of $200 or more from individuals employed in certain sectors and contributions from PACs.
The sector’s political spending in North Carolina in the past two years amounts to $628,200 for Hagan – the 17th highest among the 100 senators – and $600,479 for Tillis, the center found.
Industries within the sector show a different divide between the two candidates.
In 2013-14, Hagan received $111,600 from commercial banks, making her the sixth highest recipient among senators. Sen. John Cornyn, R-Texas, ranked at the top, with $229,700. Senate GOP leader Mitch McConnell of Kentucky received $216,325. Tillis has received $13,450.
But in the same two-year period, Tillis received more from securities and investment companies, which include hedge funds and private investment firms. The Republican candidate has taken in $206,250, compared to $135,200 for Hagan. The figures, tallied by the center, based on federal records, count large donations from individuals employed in the sector and the industry’s PACs.
Jennifer Dunn, a spokeswoman for Wells Fargo, said the company’s PACs routinely give to candidates in communities where the bank does business. In addition to Hagan, the PACs have given donations to numerous Senate candidates, she said. Wells Fargo PACs, like others, are funded through voluntary contributions of employees.