As if Gov. Mitt Romney didn't have enough on his plate heading into this evening's presidential debate in Denver, now there are whispers that Republican donors are ready to give up on the White House race -- and Romney -- and shift their money to more winnable House and Senate contests.
"The money always goes where it thinks it can get some kind of return, and the return on the presidential race for Republican money does not look auspicious right now," says former Congressman Bill Frenzel (R-Minn.). "So they'll be looking for other places to spend it. Probably if the [weeks ahead go] totally sour, there will be a lot more money invested in House races to try and protect that that majority."
Frenzel doesn't expect the big Republican donors to give up on the conservative ticket altogether, but he wouldn't be surprised to see more corporate donors shifting money to the Democratic side if the campaign doesn't start to turn around soon. "The big donors and super PACs are pretty committed folks," he says, "but the corporate PACs will always try to follow a winner."
Doug Jaraczewski, president of The Campaign Finance Group, a Washington D.C.-based campaign fundraising consultancy, agrees, saying that he's heard all along that the GOP's primary concern this year is maintaining control of the House. For now, Republicans hold 240 of the 435 House seats.
"If Romney doesn't makes a move soon, I see GOP lobbyists and donors focusing exclusively on the Congress, as that's their real bread and butter," he says.
Picking up the White House, he says, is "a secondary goal."
The Anti-Wall Street Election
All of this is happening in the midst of an election cycle in which Wall Street has been largely sitting on the sidelines, turned off by all of the recent Main Street vs. Wall Street talk from both sides of the aisle as well as industry unfriendly legislation like Dodd-Frank. The financial services industry is traditionally by far the largest supporter of political campaigns.
"A lot of people in the financial services industry are less invigorated to give this time because both sides are taking the position of being anti-Wall Street," says Scott Dworkin, CEO of the Bulldog Finance Group, a group based in the nation's capital that specializes in campaign fundraising. "Even though a lot of folks probably don't know what a hedge fund is, the candidates are talking in broad strokes of Main Street vs. Wall Street, and I think that's become disheartening to a lot of people in that line of work who are doing good things and playing by the rules."
The industry has also been paying attention to the types of laws that have been put in place since 2008 to limit their potential profits, and they're not impressed. "The whole system is working against them right now," Dworkin says.
And the numbers back this up. The financial services industry as a whole (including commercial banks, insurance, real estate and securities firms) donated about $505 million to political candidates -- including Congressional candidates and soft money groups -- during the 2008 election cycle, according to the Center for Responsive Politics, but has only given $422 million so far this year. That figure may well creep up between now and November, but this could be the first election cycle to see lower donations from financial services vs. the prior cycle since the CRP started tracking data in 1990.
Still, there is always room for money at the table in Washington -- case in point, the eight largest companies with employee donors to the Romney campaign are banks -- and Wall Street firms are on track to exceed their record giving to presidential candidates this year. According to the CRP, the industry gave $170 million to presidential candidates and political groups in 2008, and had already spent $164 million on the 2012 contest as of early September.
That's probably good news for candidates, as this is expected to be the most expensive election season in history, with an overall price tag that could be as high as $2.5 billion. The question for Romney is whether he'll actually benefit from that and unseat President Obama in just over four weeks.
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- Mitt Romney