Financial Times FT.com

Finance sector swells Obama poll funds

By Andrew Wardin Washington

Published: July 17 2007 03:00 | Last updated: July 17 2007 03:00

Barack Obama has cultivated a reputation for harnessing a wide network of grassroots supporters who donate small sums to his presidential campaign through the internet.

But fundraising figures disclosed this week showed the Democratic senator for Illinois is also popular with wealthy donors from the financial services industry.

Mr Obama received more donations from employees of investment banks and hedge funds than from any other sector, with Lehman Brothers, Goldman Sachs and JP Morgan Chase among his biggest sources of support.

Individual donors included Ken Griffin, the multi-billionaire founder and chief executive of Chicago-based Citadel Investment Group, one of the world's biggest hedge fund companies.

Mr Griffin gave Mr Obama $4,600 (€3,340, £2,258) in the second quarter of this year - the maximum allowed under US election laws - and other Citadel employees gave a total of $147,550.

The details emerged in a quarterly fundraising report to the Federal Election Commission showing Mr Obama had $34m in campaign funds at the end of June.

Hillary Clinton, the favourite for the Democratic nomination, reported $33m in available cash after raising about $6m less than Mr Obama in the quarter.

Democratic presidential hopefuls raised a combined $83m in the second quarter, about $30m more than the Republican field - highlighting the greater enthusiasm among grassroots Democrats for their choice of candidates.

The strength of Mr Obama's fundraising has stunned the Washington political establishment. But his financial power has so far failed to narrow the solid lead held by Mrs Clinton in most polls of likely Democratic primary voters.

Mr Griffin's contribution to Mr Obama showed how hedge funds and private equity firms are becoming increasingly generous political donors after unprecedented growth in the sectors.

But support from Mr Griffin has not stopped Mr Obama from supporting proposals for higher taxes on hedge fund managers and private equity executives.

Mr Obama announced last week he would co-sponsor legislation to close a loophole that allows them to avoid paying corporate in-come tax. Mrs Clinton and John Edwards, another Democratic presidential contender, have supported the proposal amid increasing political scrutiny of hedge funds and buy-out firms.

In spite of his populist economic policies, Mr Edwards received $122,650 in the second quarter from employees of Fortress Investments, a New York-based hedge fund where he once worked as a consultant.

Financial industry employees also donated heavily to the presidential campaign of Mitt Romney, former Republican governor of Massachusetts, with Merrill Lynch staff giving $62,000.

But Mr Obama's fundraising was more heavily dominated by financial professionals than other main candidate. He received $160,760 from employees of Lehman Brothers, just over $100,000 each from employees of Goldman Sachs and JP Morgan Chase and $61,125 from Citigroup employees.

Ms Clinton's greatest source of funds were employees of DLA Piper, a law firm, with her largest concentration of Wall Street donations coming from employees of Morgan Stanley, who gave $47,850.

Among Republicans, Rudy Giuliani, former mayor of New York, ended the quarter in the strongest shape, with $18.3m in hand, compared with Mr Romney's $12.1m.

Senator John McCain, one-time Republican frontrunner, had only $3.2m in cash available, offset by $1.8m in debts, and is fighting to keep his campaign afloat after an exodus of campaign staff.