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Swiss banks move into position for US elections

McCain or Obama? Swiss firms donate money to both presidential candidates Reuters

Switzerland's two leading banks, UBS and Credit Suisse, are among the 20 biggest donors to the two United States presidential candidates.

This content was published on August 29, 2008 - 21:19

The Republicans are set to approve John McCain as their candidate following the Democrats' endorsement of Barack Obama. But even before the party conventions it was clear that all campaign finance records had been beaten.

McCain collected $27 million (SFr29.7 million) in July alone, a record for the Republican Party candidate. That feat was eclipsed by Obama, who gathered $52 million in the same month - unparalleled in the US, a country where politics and money have been inseparable for a long time.

While a large part of these funds came from individuals, money is also pouring in from pressure groups: unions, major universities, professional associations and businesses.

The overwhelming majority of businesses that take part in the electoral process in this way are American. But UBS and CS are the only foreign companies to figure among the 20 top donors to the candidates.

UBS is Obama's fifth biggest donor. CS and UBS are ranked ninth and tenth respectively in the list of companies contributing to McCain, according to the Center for Responsive Politics, a non-government organisation that dissects candidates' financial reports for the Federal Electoral Commission.

"Credit Suisse is what we here at the Center for Responsive Politics call a heavy hitter and one of the most influential organisations in federal politics," the NGO's director, Sheila Krumholz, told swissinfo.

Clinton

The two banks have not limited their donations to the presidential candidates. They are also supporting numerous candidates for the legislative.

CS is the one foreign company to figure among Hillary Clinton's 20 largest donors. The New York senator is seeking a third mandate after failing in the Democratic nomination race.

For its part, UBS is one of the biggest donors for the other Democratic senator for New York, Charles Schumer, and for Mitch McConnell, the head of the Republican minority in the Senate.

Other Swiss businesses are also playing a role in the next US political deadline.

The pharmaceutical company, Roche, has given $240,000 to the legislative and presidential candidates. Its rival, Novartis, is sponsoring the two conventions and has donated more than $220,000 to the candidates.

But UBS and CS stand out by the sums they donate to electoral campaigns. UBS has contributed $587,000 since the start of the year and CS nearly $2 million.

"For the companies, it's about getting access to these individuals once they are elected, it's about developing a relationship with these people so that you can provide them with your perspectives," explains Krumholz.

Corrupting democracy

swissinfo contacted UBS, CS and other Swiss businesses that do lobbying in Washington to represent their interests in the White House and Congress, but all declined to be interviewed.

Novartis responded that their participation in conventions "demonstrates its commitment to the organising cities" and its "support for the democratic process in the US". The amount Novartis donated to the conventions has not been released.

But a company's motives for funding a party convention are, at least in part, the same as its reasons for donating to candidates, one expert argues.

"Companies seek political influence and try to prevent politicians from hurting them," explains Steve Weissman of the Campaign Finance Institute, a research centre affiliated to George Washington University.

Generally, businesses point out that they do not give money directly to candidates. Instead it is deposited by their internal "political action committees", groups funded by employees.

But Krumholz emphasises that "the employees who give funds to the candidates are not the average employees. Rather they are the company's elite, high level executives, including the CEO who can contribute as an individual and as a member of the political action committee".

"Gathering information from lobbyists is a good thing because their companies know problems well and have ideas, but the problem for democracy is that politicians do not get or seek the opposite points of view before making policy."

However, she warns that this money is corrupting American democracy.

"The danger it poses for democracy is that politicians do not obtain or seek the opposing point of view before defining an approach or taking steps," she concludes.

swissinfo, based on an article in French by Marie-Christine Bonzom in Washington

Key facts

The Republican convention will take place from September 1-4 in Minneapolis-St Paul in Minnesota.
The Democratic Party convention was held in Denver, Colorado from August 25-28.
UBS and Novartis are the only foreign businesses to contribute financially to these two conventions.
Barack Obama: UBS contributed $378,400, which makes the Swiss bank one of the 20 most generous benefactors to the Democratic presidential candidate. UBS is the only foreign company to support Barack Obama. His US business donors include Goldman Sachs, JP Morgan Chase and Citigroup.
John McCain: UBS and Credit Suisse figure among the 20 biggest donors to the Republican candidate, with $127,315 and $133,125 respectively. They are the only foreign businesses to do so. Merrill Lynch and Morgan Stanley are among the US company donors to McCain.

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In brief

Under US law, a business can only contribute towards candidates via a "political action committee" through which it requests employees to make donations limited to $2,300 per candidate per election.

Foreign companies must act through their US-based subsidiaries to be able to take part in funding a candidate or US party.

In contrast, foreign companies are allowed to fund party conventions, and like their US counterparts, the amount of their donations is unlimited.

Details of contributions made by companies to conventions are only divulged 60 days after the event is held. According to the Campaign Finance Institute, this year each convention hopes to collect around $60 million.

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