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You’ll often hear Democratic politicians decry income inequality and the pattern of the rich getting richer. But at the New Hampshire Freedom Summit -- a gathering in Manchester, N.H., sponsored by the conservative groups Americans for Prosperity and Citizens United -- Rep. Louie Gohmert, R-Texas, got into the action, too.
Gohmert, though, took aim at Democrats for hypocrisy.
"The dirty little secret on Wall Street: Eighty percent of the Wall Street executives’ and their spouses' donations go to Democrats," Gohmert said. "It’s like they’ve got some kind of little sweet deal, where we’ll call you fat cats and demean you and stuff, but you will get richer than your wildest dreams. It’s time for that to stop."
We wondered: Is it really true that "80 percent of Wall Street executives and their spouses' donations go to Democrats"?
We asked Gohmert’s office for their sourcing, and they provided several columns in the National Review by Michael Franc of the conservative Heritage Foundation.
In one of them, Franc wrote that "a review of Federal Election Commission data for the current presidential-election cycle sheds light on this important question. Judging by who they support for president, a strong majority of employees at the highest reaches of Wall Street’s big financial institutions are, well, big liberals. More Wall Streeters shower far more money -- both overall as well as on average -- on the more liberal presidential candidates than on their more conservative alternatives."
Franc wrote that he used Fundrace 2008, a campaign-finance data tool created by the Huffington Post, to look at donations from such employees as investment bankers, managing directors and senior managing directors.
He found that at Bear Stearns, 68 percent of individual donations went to Democrats. At JPMorgan Chase, it was 75 percent. At Lehman Brothers, it was 69 percent. At Goldman Sachs, the Democratic share was more than two-thirds (Franc didn’t specify in his article), while at Morgan Stanley it was more than half. At American International Group, it was 76 percent. Indeed, among the firms Franc looked into, only individuals at Merrill Lynch gave a majority to Republicans.
Right off the top, though, there’s an important caveat to how Gohmert portrayed Franc’s figures. Gohmert used the present tense, but -- as you might expect, given the presence of the now-defunct Bear Stearns and Lehman Brothers in the data and the use of a tool called "Fundrace 2008" -- Franc’s research was both conducted and published in 2008.
Not only is that four campaign cycles ago, but there’s also been a sea change in Wall Street’s partisan preferences since then.
The Center for Responsive Politics, which downloads Federal Election Commission disclosures by donors and candidates and sorts them into user-friendly categories, addressed this question in a 2013 report.
The center wrote that Wall Street money, like much big money in politics, follows power, and after Democrats took control of the House and Senate in 2006, they began to increase their share of donations.
"As recently as 2009, Democrats were collecting more campaign cash from Wall Street than Republicans," the center wrote. However, the center added, "that dynamic shifted at the end of 2009, with more money flowing to Republicans in 2010." And starting in 2011, the report continued, "the gap widened and Wall Street's financial support for one party (the GOP) began to tip the scales."
In the 2012 campaign cycle, donations by individuals in the center’s "securities and investment" category -- the closest category to "Wall Street" -- were running 70 percent to Republicans, 30 percent to Democrats, and so far during the 2014 cycle, 63 percent of the industry’s money is going to Republicans, with 36 percent to Democrats.
For individuals in the category "commercial banks," 71 percent of donations went to Republicans in 2012 and 74 percent so far in 2014. And for the umbrella category "finance, insurance, and real estate," 66 percent went to Republicans in 2012 and 58 percent so far in 2014.
For each of these three categories, the year Franc based his data on -- 2008 -- was either the high point or close to the high point for Wall Street donors’ friendliness to Democrats (at least going back to 1990, when the center began collecting this data).
Douglas Weber, a Center for Responsive Politics senior researcher, noted that Goldman Sachs had a clear Democratic edge in donations between 1990 and 2008, peaking at 2008 with 75 percent to Democrats in total giving (which, unlike Franc’s data above, includes political action committees and outside groups). But Goldman has since turned on a dime, with the share of donations to Democrats shifting to just 39 percent in 2010, 36 percent in 2012 and 34 percent so far in 2014.
"Wall Street liked candidate Obama more than President Obama," Weber said.
So by relying on Franc’s data from 2008, Gohmert isn’t just using old data -- he’s using the peak historical year for Democratic giving, and ignoring three subsequent cycles in which Wall Street tilted its donations in precisely the opposite direction.
There are other problems with Gohmert’s claim beyond it being outdated:
• None of Franc’s published data reaches 80 percent. Gohmert’s stated percentage exaggerates even what’s in Franc’s data.
• Gohmert conflated "Democrats" with "Obama" and the presidential race with all races. Franc, unlike Gohmert, noted this in his piece that his analysis doesn’t "delve into employee contributions to candidates for the House and Senate." That means Franc’s study covers a much narrower slice of the data than one would assume just by hearing from Gohmert’s comment.
When we reached Franc -- now an aide to House Majority Whip Kevin McCarthy, R-Calif. -- he didn’t defend the specific language Gohmert used. But he said he believes Gohmert’s underlying point -- that affluent "elites" lean Democratic, despite the party’s attacks "the rich" -- is fair.
"If he mixed up the statistics in some way, it is the broader point that matters," Franc said. "Elites behave politically far differently than the conventional wisdom says they do. … The Democrats still overperform politically in congressional districts with heavy concentrations of wealth and post-graduate education."
Gohmert said that "80 percent of Wall Street executives and their spouses' donations go to Democrats."
Gohmert would have had a stronger argument if he’d said that was the case six years ago, when candidate Barack Obama was vacuuming up Wall Street donations. The problem is, that’s no longer true.
In fact, the exact opposite pattern has held for Wall Street donations during the past three election cycles. In addition, Gohmert overstated Franc’s percentages and ignored the difference between donations to Democratic presidential candidates and congressional candidates. We rate his claim False.
Louie Gohmert, speech at the New Hampshire Freedom Summit, April 12, 2014
Center for Responsive Politics, OpenSecrets congressional portal, accessed April 10, 2014
Center for Responsive Politics, "Wall Street's Steeply Increasing Republicanism," Jan. 4, 2013
Michael Franc, "Democratic Party of Elites" (National Review article), May 7, 2008
Michael Franc, " Mr. Smith Didn’t Do This" (National Review article), Sept. 23, 2008
Michael Franc, "The Real Party of Wall Street" (National Review article), April 27, 2010
Email interview with Douglas Weber, senior researcher with the Center for Responsive Politics, April 16, 2014
Email interview with Michael Franc, policy director for Rep. Kevin McCarthy, April 17, 2014
Email interview with Kimberly Willingham, communications director for Louie Gohmert, April 16, 2014
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