Why AIG and not Lehman Bros? Could political contributions be the difference?

[clear eye]

While Obama speaks strongly about his qualifications to lead all players to a program that would prevent future failures of large financial institutions, and McCain throws out one contradictory statement after another regarding regulations (which he's against) vs. holding financial corporate leaders accountable (which he's for), different treatment has been dealt out to the four most endangered large financial corporations. Merrill Lynch and Bear Stearns(w/the help of a $29B Fed bailout <http://www.iht.com/articles/ap/2008/03/27/america/Government-Bailouts.php>) were found private bank "suitors" to rescue them by buying them out. Then, when Lehman Bros. similarly faced bankruptcy, the gov't decided it had to "draw a line in the sand" by letting it fail. Somehow that line was erased by the tide when AIG began seriously wobbling, and a gov't bailout of $85B engineered. <http://www.cnbc.com/id/26747020> Admitting that there's an argument to be made that the country needed AIG to be saved (although many on "The Street" said the same about Lehman Bros.), after this administration has blithely created economic crisis with the clearly unaffordable Iraq War and facilitated associated war profiteering, promoted disastrous bank deregulation, and tried to create economic disaster for seniors by promoting privatization of Social Security, I was prompted to "follow the money" to determine the cause of their current actions.

And, lo and behold, I find that out of the four companies, Lehman Bros. is the only one historically and currently seen as a Democratic donor. <https://www.nytimes.com/2008/09/16/us/politics/16record.html> (Current campaign regs prevent direct donation by corporations, but the combined gifts of the executives of companies is generally accepted as the political inclination of the company.) On the other hand AIG and its divisions have given heavily to both parties, but significantly more to Republicans. "Republican candidates received $1.54 million, 29 percent more money than Democrats’ $1.19 million." <https://www.policyarchive.org/bitstream/handle/10207/5955/200602171.pdf?sequence=1> They were especially generous with state political parties and caucuses. "AIG and member companies gave $2.1 million to state political parties and ballot measure committees during the three election cycles. Party committees received nearly $1.5 million, and almost $650,000 went to ballot committees. State political parties and legislative caucuses in 19 states received money from AIG member groups. Republican committees received $1.2 million, more than three times the nearly $319,000 that Democratic committees received. AIG contributed to both Democratic and Republican committees in 11 states: California, Delaware, Florida, Georgia, Hawaii, Missouri, North
Carolina, New York, Ohio, Oklahoma and Virginia. The California Republican Party received the most funds from AIG members: $910,000. The American International Group gave $125,000 and 21st Century Insurance contributed $785,000 in 2002 and 2004. The New York Democratic Party was also a top recipient of AIG money, getting $122,500 from three AIG member groups from 2000 to 2004. The Florida Republican Party received $105,000." (page 4-5 of the same Institute on Money in State Politics document footnoted above)

I have to admit after becoming belatedly aware of the 2006 memo listing 90 large companies advertising on ABC radio stations that requested their ads not be aired on "Air America" affiliates <>, I'm a little sensitive about how corporatist Republicans use their money advantage to protect their narrow interests.

What's your take?

[iamjoy]

1. I Suspected As Much

I wondered if the reason Lehman Bros. wasn't bailed out like the others is because they were "Democratic" and the others were "Republican"

[Muttocracy]

2. interesting - saving to read later. nt

[JCMach1]

3. Bankruptcy allowed the Barclay's firesale to go through... that's why

Of course that's a good reason too... Lehman's assets are now owned by a conservative British conglomerate! Hurray for me!

[clear eye]

4. Have Barclay's execs contributed to Republicans or do US election laws

prohibit it? Or course, even w/o contributions from Barclay's, they've eliminated an important Democratic Party funder.

[suffragette]

5. My take on this is the same as yours

I started wondering about this and poking around, too.

From OpenSecrets.org:

http://www.opensecrets.org/news/2008/09/brothers-grim-is-lehman-next.html

Since 1989, Lehman Brothers's employees and political action committee have given $9.2 million to federal candidates, parties and political action committees, with 54 percent of that going to Democrats. In the current Congress, 271 lawmakers have collected nearly $3 million since 1989, with 72 percent going to Democrats.

And a little more on the AIG NY contributions. This is from 2006:

http://www.insurancejournal.com/news/east/2006/09/21/72628.htm

In the case of AIG, the insurance giant is limited to giving $5,000 (euro3,951) to a candidate. But the parent company used 33 subsidiaries in recent years to give $335,000 (euro264,738) to three-term Republican Gov. George Pataki; $50,000 (euro39,513) to Attorney General Eliot Spitzer, the Democratic front-runner for governor; and $25,000 (euro19,757) to Democratic Comptroller Alan Hevesi, according to The New York Times.