Early tallies are in: Fund firm workers give Obama boost

BOSTON — Sen. Barack Obama took in at least $49,185 from employees of the 20-largest U.S. mutual fund groups and related companies in the first quarter, more than any other 2008 presidential candidate.
The Illinois Democrat was followed by former Massachusetts Governor and Republican candidate Mitt Romney, who raised at least $44,050; Sen. John McCain, R-Ariz., at $33,995; and Sen. Hillary Clinton, D.-N.Y., at $32,725, according to federal data assembled on an exclusive basis by The Center for Responsive Politics.
Former New York Mayor and Republican candidate Rudolph W. Giuliani was next at $15,050, according to the data, which gave the first glimpse of where the money has gone so far.
The donations list was based on the 20-largest mutual fund groups, as ranked by Financial Research Corp. of Boston in February.
Although employees at big fund firms went for Mr. Obama, Ms. Clinton was the overall donation winner in the first quarter, topping $36 million. About $10 million of that was rolled over from her Senate campaign account.
Does that mean that Mr. Obama and Ms. Clinton have an edge?
“Ask Howard Dean that question,” said Massie Ritsch, a spokesman for the center, a non-profit watchdog group based in Washington.
“He was the biggest fund-raiser among the Democrats in primaries in 2004. He didn’t make it to the nomination, and he’s not the president,” Mr. Ritsch said.
If a donor gives more than $200 to a candidate, the donor’s name, address, employer and occupation must be provided to the Federal Election Commission, he said. Although the center’s analysis assumes that donors give out of economic self-interest, it acknowledges that people make donations to candidates for many reasons.
“They may agree with them on some sort of ideological position; they may like how they look on television; they may have gone to college with them or lived next door to them,” Mr. Ritsch said.
Still, donations from people and companies linked to a certain industry often gravitate toward specific candidates, he said.
“We’ve been at this more than 20 years, almost 25 years, and you do see industry money lining up with candidates who either agree with the industries’ positions or can do something to affect the industry,” Mr. Ritsch said.
Individuals can give a particular presidential candidate $2,300 for each election in a presidential cycle. That means donors can give the candidate a total of $4,600 between the primary and general elections.
Individuals also can donate to more than one candidate, Mr. Ritsch said.
That was the case with Fidelity Investments chief operating officer Robert Reynolds, who recently announced that he will be retiring. He gave $2,100 to Mr. Romney and $1,000 to Mr. McCain.
However, Ellyn McColgan, president of distribution and operations at Fidelity — and a contender to lead the firm one day — shelled out $2,300 for Ms. Clinton.
Robert Pozen, chairman of Boston-based MFS Investment Management, who in 2001 to 2002 was a member of President Bush’s Commission to Strengthen Social Security, also donated to Ms. Clinton, handing over $4,600. Although fund company executives might disagree about the candidates, there is one thing they are likely to agree on, according to Jim Lowell, editor of Fidelity Investor, an independent newsletter based in Needham, Mass.
“They understand absolutely and in no uncertain terms that Pennsylvania Avenue is as important to their business and their industry as Wall Street ever was or will be,” he said.
Employees of the top 20 mutual fund groups and related companies gave a total of $194,105 to presidential candidates in the first quarter. The center’s analysis of those contributions turned up no evidence of donations from political action committees.
PACs aren’t usually a big factor in presidential elections, historically representing about 1% of donations, Mr. Ritsch said.
Lawyers lead
Employees listing The Capital Group Cos. Inc., Capital Guardian Trust Co., Capital Research and Management Co. or American Funds — all of Los Angeles — as their employer gave the most to 2008 presidential candidates in this year’s first three months, at $65,815.
Those listing Boston-based Fidelity or FMR Corp. as employers ranked next at $59,975.
FRC ranked American Funds as the largest fund company, followed by The Vanguard Group Inc. of Malvern, Pa., and then Fidelity.
Although the center doesn’t have a specific category for mutual fund companies overall, its securities and investment industry category, which includes fund companies, was responsible for $8.9 million in contributions to 2008 presidential candidates during the quarter, including individuals and PACs.
That total was exceeded only by lawyers, at $16.6 million.
“Nine of the top 10 organizations that donated to presidential candidates were in the securities and investment industry,” said Douglas Weber, a researcher at the center.
The fund industry recently got a big Washington win with the Pension Protection Act of 2006, which among other provisions makes it more attractive for companies to automatically enroll workers in 401(k) plans.
“[Auto enrollment] is clearly beneficial to the public interest,” said Mercer Bullard, founder and president of Oxford, Miss.-based Fund Democracy Inc., a non-profit organization that advocates on behalf of fund shareholders. “But it is also one that the mutual fund industry takes special interest in because it increases assets.”
Following the trading scandal that erupted in 2003, the mutual fund industry “woke up” to the necessity of having political clout when it comes to regulatory issues and so far has forestalled several initiatives.
The industry is likely to continue to strive to block “long-needed regulatory reforms but will likely continue to strongly support fair treatment for capital gains and dividends reinvested in mutual funds,” he said.
What presidential candidate is the fund industry likely to have backed once all the numbers are in?
“No idea, only because even on a party affiliation [basis], it’s not clear to me that the Democrats have any greater claim to standing up for the interests of investors than Republicans, which has been a real disappointment,” Mr. Bullard said.