After Silicon Valley Bank, Signature Bank failures, questions remain about political donations
In the aftermath of two of the largest bank failures in U.S. history, many elected officials who received thousands of dollars in donations from executives with Silicon Valley Bank and Signature Bank are silent on what they will do with the money.
USA TODAY reached out to several of the biggest recipients of money from Silicon Valley Bank and Signature Bank, but spokespeople for those officials did not respond to USA TODAY’s multiple requests for comment.
While President Joe Biden's 2020 campaign and the Democratic National Committee told USA TODAY they will donate money received from Silicon Valley Bank to charity, others have not said what they will do.
Among those who received significant sums in recent years and did not answer questions by time of publication:
Rep. Patrick McHenry, R-N.C., the chairman of the House Financial Services Committee, whose campaign and related PAC received at least $58,700.
McHenry's donations include $10,000 from Silicon Valley Bank PAC; $21,800 from Signature Bank chairman Scott Shay; $15,900 from Signature Bank executive vice president Thomas Kasulka; and $11,000 from Signature Bank CEO Joseph DePaolo.
Sen. Mark Warner, D-Va., whose campaign received at least $27,200.
Warner's donations include $21,600 from Silicon Valley Bank PAC and $5,600 from Silicon Valley Bank CEO Greg Becker.
House Speaker Kevin McCarthy, R-Calif., whose campaign and related PACs received at least $32,910.
That total includes campaign account donations of $13,667 from Silicon Valley Bank PAC and $3,483 from Signature Bank executive Brian Hallinan. His Majority Committee PAC received $5,000 from Silicon Valley Bank PAC and $2,500 from Becker. Silicon Valley Bank PAC also gave $5,000 to McCarthy Victory Fund 2014 and $2,900 to McCarthy Victory Fund in 2015.
Rep. Zoe Lofgren, D-Calif., whose campaign and related PAC received $11,100.
That includes $8,600 from Silicon Valley Bank PAC to her campaign, $1,000 from Silicon Valley Bank PAC to an affiliated PAC, and $1,500 from Becker.
Recovery of Signature Bank, SVB political donations unlikely
Unlike a typical bankruptcy case, there is no legal requirement for lawmakers to return money received from banks that have subsequently been taken over by the Federal Deposit Insurance Corporation, according to Yesha Yadav, a professor at Vanderbilt Law School who specializes in financial regulation.
“This is more of a moral thing at this point,” Yadav said. “I think with folks on both sides that have critiqued the bailout for various reasons, they might feel morally compelled.”
William Howell, a political science professor at the University of Chicago, said Democrats would be unlikely to return donations because of criticism Biden has received over his handling of the bank, and Republicans may not feel responsibility for Biden's response.
The Biden administration said it would make whole the customers who held their money in these banks, although the banks' stockholders will not receive the same protection, and executives will be fired. Critics have called the move a "bailout," though Biden said taxpayer money won’t cover the customer losses.
"Given these two facts — that the scandal involves a government bailout, and not the bank failure, per se; and that the Biden administration helped orchestrate the bailout — it doesn’t surprise me that so few Democrats are heeding calls for the return of donations from the Silicon Valley Bank PAC," Howell said.
Republicans, on the other hand, are not implicated by Biden's handling of the crisis, he said, so they're "less likely to experience any significant political fallout from keeping these donations.”
Some Democrats say they'll offload Signature, SVB donations, but details slim
Some are choosing to offload the money anyway.
On Friday afternoon, a spokesperson for the the Democratic National Committee said both it and Biden's 2020 campaign would give Silicon Valley Bank money to charity.
The aide said the Democratic National Committee would donate the $12,050 from Silicon Valley Bank managing director Greg Brady, $5,600 that Brady gave to Biden for President, and $2,800 that Silicon Valley Bank CEO Greg Becker gave to Biden for President.
Biden's presidential campaign and PACs received at least $11,900, according to records from the Federal Election Commission, including the $5,600 from Brady. Another executive, Claire Lee, the former brand ambassador and head of startup banking who took over one of Brady's roles running a division of Silicon Valley Bank, gave $6,300 to the Biden Victory Fund.
The Democratic National Committee received at least $32,250 from Silicon Valley Bank executives since 2012. Brady gave $17,050 over the years, including a $5,000 donation in 2012. Lee gave $15,000 in 2018 and $200 in 2020. Several other former Silicon Valley Bank executives donated in the past.
Rep. Ro Khanna, D-Calif., whose district includes part of Silicon Valley, will return all donations, the congressman's communications director, Marie Baldassarre, told USA TODAY. It’s not clear if the money will go back to the donor or be donated to charity.
Khanna received $1,500 from Becker in 2015 and $500 from him in 2018, according to records from the Federal Election Commission.
On Wednesday, spokespeople for Senate Majority Leader Chuck Schumer, D-N.Y., and Rep. Maxine Waters, D-Calif., the former chair of the House Financial Services Committee, told CNBC and Politico, respectively, they would donate the money to charity. Their offices did not respond to USA TODAY’s requests for comment.
Schumer received $6,600 from Signature Bank chairman Scott Shay; $5,800 from Silicon Valley Bank CEO Greg Becker; $2,500 from Signature Bank president, CEO and director Joseph DePaolo; and $1,500 from Signature Bank executive vice president and chief lending officer Thomas Kasulka.
Waters received $2,500 from Silicon Valley Bank PAC in 2020.
Dig deeper:
What we know: Why did Silicon Valley Bank collapse?
Political donations: Silicon Valley Bank, Signature Bank executives gave thousands to Democrats and Republicans
Visual explainer: Silicon Valley Bank collapse explained in graphics
Live updates: Silicon Valley Bank, Signature Bank collapses explained, live updates on new developments
The big picture: What Silicon Valley Bank collapse means – and why it's not 2008 again
This article originally appeared on USA TODAY: SVB, Signature Bank political donations: Will officials return them?
