Rep. Rahm Emanuel (D.-Ill.), who has agreed to serve as “Change” President Barack Obama’s White House chief of staff, has close ties to the Wall Street firms and housing entities at the heart of the financial crisis that propelled Democrats to such a widespread triumph on Election Day.
On Freddie Mac Board of Governors
Emanuel is the top congressional recipient of Wall Street campaign contributions, and he served on the board of government-sponsored housing giant Freddie Mac. Additionally, he was caught up in some of the improprieties of Chicago’s Democratic Machine and Bill Clinton’s campaign fundraising. Through Sept.30, 2008, Emanuel received $600,500 for this last election in reported contributions from the securities and investment industry, according to the Center for Responsive Politics. That’s more than any other member of Congress. Similarly, the hedge fund industry contributed $96,900 to Emanuel, more than any of his House colleagues, and more than the top 11 GOP recipients of hedge fund cash combined.
The entire finance/insurance/real estate sector gave Emanuel more than $1 million, accounting for 37% of all the money he raised this election.
Pipeline From Wall Street
This contribution pipeline from Wall Street is partly explained by Emanuel’s service on the House Ways and Means Committee, but it is still extraordinary, considering Emanuel, in Wall Street contributions, outraised a dozen committee Democrats with more seniority — including committee chairman and fundraising titan Charlie Rangel, a New Yorker. He also outraised every Republican on the panel, including two who faced difficult reelections while Emanuel had no serious challenger.
Emanuel’s best source of funds this year was Swiss bank UBS, whose employees, political action committee, and executives had given $63,700 to Emanuel as of September 30. UBS has been one of the top beneficiaries of the Bush Administration’s series of massive bailouts. Specifically, the expanding bailout of insurance giant AIG directly benefits UBS, whose subprime-mortgage-backed securities were insured by AIG. Also, UBS has been bailed out by the Swiss government. UBS executive Raoul Weil was indicted in the U.S. this week for illegally helping Americans shelter wealth from the IRS.
Favored by Top Financial Firm Donors
Wall Street’s leading firms all favor Emanuel, too. Goldman Sachs, the top Wall Street donor to federal candidates, gave more to Emanuel than to any other House member, as did Merrill Lynch. In money from each of Citigroup, JP Morgan, Morgan Stanley, and Bank of America—the other top financial donors this cycle—Emanuel ranked among the top four House recipients.
Emanuel is also among the top 25 recipients of campaign contributions from Fannie Mae and Freddie Mac. Additionally, as Chicago Sun-Times columnist Lynn Sweet wrote in 2003, “Clinton’s going-away gift to Emanuel was a seat on the quasi-governmental Freddie Mac board, which paid him $231,655 in director’s fees in 2001 and $31,060 in 2000.”
Emanuel didn’t emerge without stain from his ties to Chicago Mayor Richard Daley or President Bill Clinton. Federal prosecutors maintain that the Daley administration employed a team of patronage workers, paid by Chicago taxpayers, to campaign for Emanuel in his 2002 election.
As the Chicago Tribune reported in 2006, “Two ex-city officials, Donald Tomczak and Daniel Katalinic, have admitted in guilty pleas that they ran political groups whose members got city jobs and promotions after campaigning for Daley and candidates supported by him, including U.S. Rep. Rahm Emanuel (D-Ill.).”
After the 1992 election, in which Emanuel served as Clinton’s top fundraiser, the Federal Election Commission found that the Clinton campaign improperly pocketed federal matching funds by shuffling money around to different accounts. Among objecting to other improper payments, the FEC disallowed a $52,000 payment to Emanuel that was not documented.