This is the final weekend before the 2014 US midterm elections, and Americans will see plenty of political ads, have their doors knocked on by canvassers and their phones called by volunteers. Who is paying for all this? As is traditional, the largest source of US campaign funding is the financial sector.
This election—probably the least interesting in recent years—is largely a fight over which political party will control the Senate. If the pollsters and forecasting models are to believed, the Republicans should pick up enough seats to do so.
This probably won’t change the policymaking gridlock in Washington—while Republicans will have full control of the legislative agenda, they will be unlikely to enact any laws while Barack Obama is president, unless they suddenly develop a new interest in compromise.
But setting that agenda is still important, with both parties looking ahead to the 2016 presidential election as the real inflection point.
What the financial sector wants from all of this is less restrictive regulations, lower taxes, and less funding for the regulatory agencies who police their sector, and it hopes Republican control will help give it to them. Here’s how the sector aims to get there.
Get your powerful incumbents in position
This is a list of the politicians who received the most money from banks and securities companies in 2014. Topping the list is Booker, whose state of New Jersey is home to a significant financial industry.
Next up are McConnell and Boehner, are the top Republican lawmakers in Washington. Cornyn, Schumer, and Warner are all members of the Senate committee that oversees financial regulation. Markey fundraises from the many private equity and consulting firms in Massachusetts, including Bain Capital, the firm founded by Mitt Romney, the last Republican candidate for president.
Cotton is running in an important senate race this year, but much of his financial fundraising is likely linked to his service on the House Financial Service committee. McFadden is the lone member of the list who isn’t an incumbent; he’s challenging Minnesota senator Al Franken in a somewhat quixotic campaign, but he’s also a former Lazard banker who relies on his network to finance his campaign.
And Graham, a long-serving Republican, counts on big-time Republican donors at Elliott Management and KKR to finance his campaign this year.
Get into the most important races
The next thing to look at are the seven senate races that forecasters expect will decide control of the senate—most of them lean Republican, hence the overall odds, but these are the states where we can expect upsets.
You might be surprised to see that the Democratic candidate has out-raised the Republican candidate in four of the seven races, but that’s something of an artifact of the first strategy mentioned above: They are all states where a Democratic incumbent is under pressure from an insurgent Republicans, and the first rule of political fundraising is that incumbents have an advantage when it comes to big business.
But the fact that most of the insurgents are on level ground with the incumbents shows that some in the financial sector sees good odds for the challengers.
Get the checks to the party committee
If you’re looking for the biggest disparity between the two parties, look no further than the fundraising disparity between the two sets of party committees that act as the marshals of the election battle. Donations to the Republican party outnumber those to the Democratic party significantly. These donations are then passed on to candidates, used to purchase independent advertisements or invested in operations dedicated to turning out voters.