WASHINGTON – Wall Street and its financial allies did an about-face in political spending in June, giving Republicans over two-thirds of their campaign contributions as Democrats pushed financial reform forward in Congress, a report said on Tuesday.
The preliminary findings by the nonpartisan Center for Responsive Politics suggest that a financial industry trend favoring Republican candidates, which began in late 2009, may have accelerated as reform legislation progressed in the run-up to November's congressional mid-term elections.
The Washington research group found that individuals and political action committees connected with the finance, insurance and real estate sectors gave 68 percent of their money to Republican interests in June, just before President Barack Obama signed financial reform into law.
Nearly opposite conditions held sway in March 2009, when 70 percent of the industry's contributions went to Democrats.
Republicans also received most of the industry's contributions in each of the first six months of 2010, according to the Center, which cautioned that its numbers are expected to change as it gleans further data from federal disclosure documents.
The findings are likely to come as a blow to Democrats, who are fighting to retain their control of the House of Representatives and face a smaller risk of losing the Senate.
The Center's Web site at www.opensecrets.org said $169 million in industry donations for the 2010 campaign cycle still favored Democrats by 52 percent before the latest figures were released.
Democrats say sweeping reforms were needed to prevent a repeat of the financial meltdown that tipped the U.S. economy into its worst recession since the 1930s.
But Wall Street executives accuse Democrats of embracing costly reforms as an election-year tactic to win favor from voters who are angry at incumbents and blame big banks, securities firms and insurers for economic woes including high unemployment.
The center's report suggested that industry spending shifted sharply toward Republicans last October and crossed the 50-50 line a month later, as the House neared approval of its version of financial reform.
The disparity then widened by nearly 20 percentage points from April to June as reforms headed toward approval in the Senate and a final conference bill.
PAC spending by leading Wall Street firms has been off sharply this year as a result of several factors including efforts by banks and lawmakers to avoid conflicts of interest during the reform debate.
But with reforms now law, some analysts expect a resurgence of PAC spending in September and October that would benefit candidates from both parties.
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