Senate Minority Leader Mitch McConnell, R-Ky., was a fierce critic of the federal bailout of General Motors and Chrysler last year, saying he "cannot ask the American taxpayer to subsidize failure."
WASHINGTON — Senate Minority Leader Mitch McConnell, R-Ky., was a fierce critic of the federal bailout of General Motors and Chrysler last year, saying he “cannot ask the American taxpayer to subsidize failure.”
But General Motors doesn’t seem to hold a grudge.
The political-action committee formed by the company, which is now largely owned by the taxpayers, cut McConnell a $5,000 campaign check in September, a small piece of the $190,000 it donated to campaigns in the past month.
While GM suspended its contributions as it solicited the government for financial help, it is back in the game of political giving, increasing donations from its federal political-action committee steadily over the past few months.
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And GM is not alone. Companies that received federal bailout money, including some that still owe the government, are giving to political candidates with vigor. Among companies with PACs, the 23 that received $1 billion or more in federal money through the Troubled Asset Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before.
Most of those donations are going to Republican candidates, although the TARP program was approved primarily with Democratic support and President Obama expanded its use to GM and other automakers.
Some of the generosity to Republicans can be explained by the expectation the party is forecast to make gains in Congress. But another factor is the Democratic Party’s efforts to adopt financial-regulation legislation.
The bill, which passed the Senate with the votes of three Republicans and all but one Democrat, put new curbs on banks and introduced a regulator to vet financial products for consumers. Most Republicans, and banks, say the bill creates too many new restrictions.
Scott Talbott, a lobbyist with the Financial Services Roundtable, said another factor could be the tone some Democrats used against financial-services firms. At one point, Obama called Wall Street executives “fat cats.”
“The entire industry was painted with a broad brush, and there was dissatisfaction with that,” Talbott said.
Democrats have been abandoned by individual Wall Street donors as well as corporate PACS, leaving the party without an important source of funding as it fends off aggressive Republican challengers.
The bailouts have become campaign fodder for Republicans against their Democratic rivals. In a television commercial, former Sen. Dan Coats, R-Ind., pillories his opponent in the Indiana Senate race, Rep. Brad Ellsworth, D-Ind., for supporting “the Obama-Reid-Pelosi agenda” including “the disastrous bank bailout.”
Coats has received more than $30,000 for his Senate campaign from companies, including JP Morgan and GM, that took government money. No companies on the bailout list have donated to Ellsworth.
One company that used TARP funds to invest in toxic assets from other banks is getting into the political-giving mode for the first time. In March, the investment fund BlackRock created a federal PAC only a few months after the company used $2 billion in government money to invest in those assets. Its newly formed PAC has cut campaign checks to federal lawmakers including Rep. Barney Frank, D.-Mass., the chairman of the House Financial Services Committee.
The two top recipients of money from companies receiving TARP funds are the top two House Republicans, Minority Leader John Boehner, R-Ohio. with $200,000; and Republican Whip Rep. Eric Cantor, R-Va., with $187,000. Seven financial firms have given the maximum $15,000 to the National Republican Senatorial Committee in each of the past two years, including American Express, Bank of America, Citigroup and Goldman Sachs — a total of $210,000.
The Democratic Senatorial Campaign Committee has taken $93,500 from companies that received TARP funds. It did not accept money from companies while they owed the government, except for one $15,000 donation from Capitol One.
Citigroup, one of the few top recipients that has not paid back all that it owes the government, in September gave $30,000 to Republicans. It also cut $12,000 in checks to Democrats, including the Democratic Congressional Campaign Committee and House Majority Leader Steny Hoyer, D-Md.