Brown and Warren Cash in from Bain Capital Execs
Saturday, July 21, 2012
Both candidates in the race for U.S. Senate in Massachusetts have received funding from executives at Bain Capital, the Boston-based investment bank and venture capital group formerly led by Mitt Romney. Bain Capital has faced recent scrutiny in the Presidential campaign.
In the current election cycle, incumbent U.S. Senator Scott Brown (R-MA) received $22,000 from nine individual Bain executives. Brown has sided with Romney on various issues, most recently, on the decision to try and repeal the Affordable Care Act.
Brown’s challenger, Democrat Elizabeth Warren worked to support the Consumer Financial Protection Bureau and has consistently spoken out against Wall Street influence. But Warren has also received campaign donations from Bain execs: five individual donors have donated $8,250 to her. Part of Warren’s platform has been as a champion for middle class families and standing up against “big money and big power.”
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Money Talks
Lawless says that the amount of money in the race shows how crucial it is to both parties.
“Both parties need the seat. If Scott Brown is re-elected, it will be impossible for the Democrats to maintain control. And if Elizabeth Warren is elected, the Republicans will need to protect all of their incumbents,” she said. “I think this is part of the calculus that both parties are employing and that’s why it’s receiving a lot of attention.”
Lawless added that really, there’s more on the table than meets the eye, saying that control of the Senate essentially rests in the fate of this seat.
“The fact that so much money has been raised demonstrates how big this race really is. Both sides are able to convince well-educated, successful donors that the race is worth their investments,” Lawless said. “At the end of the day, this race is bigger than Scott Brown and Elizabeth Warren. It’s about control of the Senate. People are willing to swallow more because party control is at stake. They may not be crazy about Warren or Brown, but they will get behind them because of what is at stake.”
Warren Took Bain Funds
Among Warren's Bain donors is Managing Director & Chief Investment Officer Jonathan Lavine at Sankaty Advisors (a Bain Company), who gave two separate donations of $2,500, the most any individual can give at one time. Under guidelines from the Federal Election Commission, a cap has been established for primary elections and general election donations so that an individual can only contribute $2,500 for each election.
Lavine donated the highest amount possible to Warren and has also raised a significant amount for Obama in the past. According to Open Secrets, Lavine has helped funnel $1,106,100 for Obama’s re-election campaign.
Diane Exter, Managing Director of Bain affiliate Sankaty Advisors also contributed $2,500 at the end of March.
Brown’s Dilemma
Brown’s Bain donors contributed almost three times as much money as Warren’s list of Bain supporters, something Lawless says is telling about the two political parties.
“I think it speaks to the fact that bankers tend to support Republican candidates and Scott Brown is the Republican in the race,” Lawless said. “Brown would be ill-suited to question her on that front, because it would be calling into question his party’s nominee. Scrutinizing any funding from them would mean undermining Mitt Romney.”
Brown's list of Bain investment bankers, includes two Managing Directors, John Connaughton and John Connolly.
Brown’s side also included an individual donation from Sankaty Advisors, Michael Ewald, Managing Director who donated $2,500 at the end of March.
Playing for Both Sides?
According to FEC reports, Managing Director at Bain Capital, Jeffrey Schwartz has donated to both candidates, including a $2,500 donation to Brown and a $250 donation to Warren, but through an email exchange with Schwartz, he denied that he had in fact donated to both sides of the race.
"I am not a donor to both candidates – your findings are incorrect," he said.
Schwartz declined to clarify which candidate he supported, but has been listed on the Huffington Post's Fundrace as having donated to both Democrats and Republicans in current and past election cycles. According to Huffington Post's Fundrace, he contributed to Pagliuca for Senate campaign in 2009 listed as a Democrat, and also to the Romney for President campaign in 2011 as a Republican. Both campaigns also failed to comment on Mr. Schwartz's donation. In the FEC's listing of the two donations, one is listed coming from Cohasset from Jeffrey Schwartz and one from Boston from Jeffrey M. Schwartz. In a paragraph describing Mr. Schwartz on Bain Capital's website, it describes him as a resident of Cohasset.
Donations and the Race
While Lawless agreed that the amount of money being thrown around in this race is significant – shaping up to be the most expensive Senate race in history – campaign donations offer good commentary but little else.
“When running for office in a multimillion dollar race, candidates are thrilled that people are giving money. To think they’re there scrutinizing each check and turning some down is a nice idea, but that’s just not how it goes,” she said. “It’s a great talking point for the other team.”
Lawless also said that naturally, companies and their employees can reflect different ideals.
“There’s also a difference with people affiliated with big banks on Wall Street and people who work for companies who have different opinions than theirs, and that’s probably what we’re seeing here,” she said.
Numbers also don’t completely show how involved candidates are with organizations and companies, she said: “Although it looks like these people really influenced by the donation though, the total proportion is much more relevant and the real issue is the extent to which those candidates are in sync and out of sync with the companies.”
Lawless added that supporters from around the country are willing to give for this race because of what’s on the table and that the many out-of-state donations speak to that.
To the Finish Line
When asked what Lawless thinks the atmosphere and donations will be like as the finish line comes into sight, she said, “I think it’ll be a relatively dirty race, as all high profile races this season will be. This race is not going to be microcosm of the Presidential race between Romney and Obama. It can’t be. If it was, Elizabeth Warren wins.”
She said that the race will include two significant factors: Obama raising support for Warren in Massachusetts and Brown learning to navigate the sometimes right-leaning landscape of Massachusetts.
“Scott Brown needs to learn to navigate this race so that if Obama gets the Presidency, people will still be willing to split their ticket and get his vote,” she said. “Massachusetts is tricky because Scott Brown can’t completely adopt Republican views; he needs to moderate his stance. Massachusetts has also shown they are willing to elect Republicans. They elected Romney.”
Lawless says that while Brown is the incumbent, the special election was nothing like what he will see this race and that the victor is a tossup at this point.
“The special election was also crazy. The only thing that helped him was that was the only race, and he was also facing a candidate far less compelling than Elizabeth Warren,” Lawless said. “Scott Brown is also the incumbent and has generated some support. But to the extent that Obama is able to get voters out for Elizabeth Warren, even if the polls show a close race, she could pull things her way.”
