When the head of JPMorgan Chase met with shareholders to answer for a trading loss of more than $2 billion Tuesday, it was against an evolving political backdrop: Donors from big banks are betting on Mitt Romney to defeat President Obama and repeal new restraints on risky, large-scale investments.
“There’s no doubt that there’s been a big diminution of support for the president,’’ said William M. Daley, Obama’s former chief of staff and a former top JPMorgan Chase executive. “People in the financial services sector are saying, ‘The president has been too tough on us, both in policy and on rhetoric.’ ’’
The top five donor groups in Romney’s campaign are individuals and political action committees associated with large financial institutions, led by Wall Street giants Goldman Sachs and JPMorgan Chase, according to information compiled by the Center for Responsive Politics, a nonpartisan research group that tracks campaign donations.
By contrast, Obama’s top five contributor groups include individuals and PACs affiliated with high technology giants Google Inc. and Microsoft Corp., and the global law firms DLA Piper and Sidley Austin, and do not include those associated with banks. In 2008, financial institutions backed him generously.
Analysts said the JPMorgan loss could be a political opportunity for Obama - and an obstacle for Romney.
On Monday, Obama was already seizing on the JPMorgan loss to bolster his reelection effort and underscore his continuing support for new and pending financial regulations in the 2010 Dodd-Frank regulatory overhaul, which includes the controversial Volcker Rule, a provision that would prohibit banks from making speculative investments with their own funds.
“This is the best, or one of the best-managed banks. You could have a bank that isn’t as strong, isn’t as profitable making those same bets and we might have had to step in,’’ Obama said on ABC TV’s “The View,’’ adding praise for JPMorgan chief Jamie Dimon. “That’s exactly why Wall Street reform is so important.’’
The JPMorgan loss “certainly fortifies the argument for stricter financial regulation,’’ said William A. Galston, a senior fellow at the Brookings Institution and former adviser to President Clinton. “And since President Obama has been on one side and Mitt Romney has been on the other, you would have to say it will make it a little bit harder for Mitt Romney to fortify the position he has articulated, which is that Dodd-Frank should be repealed.’’
Campaign finance records also show that the financial services sector is, to some extent, hedging its bets by donating money to the Democratic National Committee.