Swiss bank employees back Romney

Robert Wolf (left), former chairman of the Americas for UBS AG, is among Obama’s top Wall Street donors Wall Street Journal

United States employees at Swiss banks Credit Suisse and UBS have been donating more to presidential candidate Mitt Romney than to President Barack Obama. In recent years top bank officials have been extremely generous to the two camps.

This content was published on August 26, 2012 - 11:00
Marie-Christine Bonzom in Washington,

With less than three months to go before the November 6 vote and with money flowing in abundance into campaign coffers, the 2012 presidential election is projected to be the most expensive in US history.

In July, Romney outpaced Obama for the third month in a row in fundraising. But Obama is reported to have so far brought in $348 million (SFr332 million) since the start of the campaign, compared with $193 million for the Republican.

Fundraising has long been an important part of the race to the White House. But the 2012 campaign is marked by new regulations and major donations, especially from the business world.

Individual contributions

As in previous campaigns, Swiss companies play an important role, according to figures compiled by the Center for Responsive Politics, an independent non-government organisation that publishes data from the Federal Electoral Commission.

Switzerland’s biggest banks Credit Suisse (fifth with $420,000) and UBS (12th with $240,000) are, together with Britain’s Barclays Bank, and consultancy firms PricewaterhouseCoopers and Ernst & Young, the only foreign firms among Romney’s top 15 donors. The Swiss banks do not feature in Obama’s top 20.

Other Swiss companies are also contributing to the 2012 campaign via their employees. Pharma giant Novartis has already given $250,000 and its rival Roche $210,000 to congressional elections. The Zurich Insurance Group is the only major foreign donor to the presidential campaign among insurance companies.

Credit Suisse and UBS say they are not directly involved in the financing of presidential candidates, however.

“Credit Suisse doesn’t give any money to any presidential candidate; some of our employees do that but those are individual contributions. By law they have to list their employer but it’s not Credit Suisse that makes those contributions,” Victoria Harmon, managing director for corporate communications at Credit Suisse-US, told

UBS refused to answer questions directly but referred to a recent press statement.

It declared: “UBS does not make financial contributions to presidential candidates, nor does UBS have a political action committee that makes contributions to these candidates. Employees are free to give their own money to the candidates of their choice”.

Corrupting influence?

The biggest individual donors are generally not simple employees but rather business directors and executives, including those who have retired.

Since 1990 the biggest donors from Credit Suisse are John Hennessy, former chief executive of Credit Suisse First Boston, who remains a bank consultant, and vice president David Mulford. These two “employees” have given over $770,000 to presidential and congressional campaigns.

Robert Wolf, former chairman of the Americas for UBS AG, and John Haskell, a retired former UBS executive turned consultant, were two of the biggest UBS donors between 1990-2012 with a total of $710,000. Wolf left the bank on August 1 after 18 years but remains an advisor.

Michael Malbin, director of the Campaign Finance Institute, believes Wolf has continued to generously fund election campaigns as “he passionately cares about the issues”.

Economic interest

But is passion his sole motivation? And is there not a danger that money is perceived as being a corrupting influence?

“The word ‘corruption’ is very strong, but I would say that sources of political contributions tend to structure the political agendas and have an influence on the political debate,” said Malbin.

Bill Allison, editorial director at the NGO Sunlight, which specialises in transparency of public institutions, felt the term corruption was not too strong in this context.

“Absolutely, money has a corrupting effect on politicians. It’s true that the vast majority of the giving by banks and other companies comes from employees but the money is usually given because of the economic interest those companies have,” he commented.

“Banks such as Credit Suisse and UBS want to be able to influence the regulations that are still being written  after the Dodd–Frank Wall Street Reform and Consumer Protection Act was passed in 2010.”

The act aims, among other things, to improve transparency, end bailouts and protect consumers from abusive financial practices.

Political returns

Bob Biersack, senior research fellow at the Center for Responsive Politics, said influence can also take the form of senior political appointments. 

Wolf who golfs and holidays with Obama, was in 2009 appointed to the president’s Economic Recovery Advisory Board and in 2011 became a member of the president’s Council for Jobs and Competitiveness. Mulford became George Bush’s US ambassador to India.

But there are other ways for companies to help finance election campaigns. They can also create their own super political action committees, so-called super PACs, or donate unlimited funds to them or finance  party “conventions”.

Companies have up to 60 days after party conventions to divulge the sums donated. To date they have not published figures for the Republican and Democrat conventions at the end of August and September. But in 2008 UBS and Novartis were the only foreign firms to help fund the conventions.

Costly campaigns

The 2008 US presidential campaign was the costliest in history - $5.3 billion in spending by candidates, political parties and interest groups on the congressional and presidential races.

That was a 27 per cent increase over the $4.2 billion spent on the 2004 campaign, according to the Center for Responsive Politics.

The party presidential nominees – Democrat Barack Obama and Republican John McCain – together raised $1.1 billion and spent just over $1 billion.

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Super PACs

Super PACs are a new kind of political action committee created in July 2010 following the outcome of a federal court case known as v. Federal Election Commission.

Super PACs may raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates. Super PACs must, however, report their donors to the Federal Election Commission on a monthly or quarterly basis. Unlike traditional PACs, Super PACs are prohibited from donating money directly to political candidates.

Under US law, firms are allowed to participate in the funding of a candidate via a political action committee. They can ask employees to make individual donations of up to $5,000 per election per candidate.

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Opaque Swiss funding

In Switzerland, neither the federal government nor most of the cantons have financial disclosure requirements for political parties and campaigns. Only two cantons – Geneva and Ticino – have so far come up with any rules at all. The vast majority of party funding comes from private sources.
According to a recent Zurich University study, the Swiss People’s Party accounted for 40% of the total campaign funds spent by parties in the legislative period 2007–2011. Second came the Radical Party at 25%, the Christian Democrats at 16% and the Social Democrats at 13%. The other parties accounted for the remaining 6%.
A people's initiative demanding greater transparency has been launched by an inter-party committee. The wording calls for more clarity on the incomes of politicians.

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