-
The American Bankers Association's board is expected to approve a plan Thursday to get into the SuperPAC game.
September 5 -
Friends of Traditional Banking, a SuperPAC created by a group of state associations last spring, has narrowed its sights to seven races — and is hoping more community banks will join it as it decides what two candidates it should support.
August 22 -
The American Bankers Association released its official slate of candidates who are set to take office at the group's annual convention next month.
September 6
WASHINGTON — Bankers seeking to influence the November elections via SuperPACS now have a second, distinct avenue.
The American Bankers Association's board voted unanimously Thursday to set up a foundation that raises corporate money to support the campaigns of candidates the industry either aims to elect or defeat.
The ABA's Financial Education and Advocacy Initiative follows the creation last spring of the Friends of Traditional Banking, which is taking an alternate tack. Organized by 10 state associations, Friends of Traditional Banking will select two races this fall and encourage individual bankers who have pledged money to send those contributions directly to candidates.
Friends of Traditional Banking
Under the structure ABA chose, it will be able to use just 49% of the money it raises for so-called "independent expenditures" or donations that support a candidate but are not coordinated with his campaign. For example, the Financial Education and Advocacy Initiative could buy ads to help elect Sen. Scott Brown in Massachusetts but could not work with his campaign on what the ad says or where it should run.
The ABA's foundation also plans to contribute directly to other SuperPACs that are supporting candidates it favors. The remaining 51% of the corporate funds it raises must be spent on broader issue advocacy.
Matt Williams, the president and CEO of Gothenburg State Bank in Nebraska and the ABA's incoming chairman, said this structure was important to his decision to support the move.
"I am not going to hide from the fact that [influencing races with money] is certainly an important aspect of it. But we have really struggled as an industry over the past few years influencing the educational aspect of people who are already elected in Washington," he said.
The ABA's approach — corporate dollars that by law must remain separate from a campaign versus individual donations directly to a candidate — will make it tough for any candidate to know whether the banking industry played a role in his or her race.
"Theirs is focused more on the end result; it doesn't matter who gets the credit," says Howard Headlee, the president of the Utah Bankers Association and one of the organizers behind Friends of Traditional Banking. "In our model the candidate gets the money and the candidate can decide how to spend it best win their race. That's the right way to do this."
Still, Headlee is thrilled ABA has taken the plunge.
"I applaud the ABA for standing up and getting aggressive," he says. "Frankly, I hope they take some of their foundation money and contribute it to what we are doing."
That's unlikely.
It's clear there is a rift between the two camps, and both Williams and Headlee tried hard not to make a bad situation worse.
Asked why ABA didn't simply put its weight behind the Friends of Traditional Banking effort, Williams says, "There was great conflict between a few people and it just didn't get itself resolved.
"Howard Headlee and the leadership of that group are really committed to our industry and we struggled, but the ABA board was never comfortable with that approach."
Asked why the ABA was uncomfortable, Williams responded, "Because of how it was being managed and who was leading it."
Headlee said the mere fact that ABA has taken this step may help Friends of Traditional Banking better make its case to bankers who are wary of anything to do with SuperPACs, which have been widely criticized for a lack of transparency.
"I think it gives us credibility. It acknowledges that more needs to be done," Headlee says. "Through Friends of Traditional Banking and what the ABA has done we've sent a message to Congress that things are different now. We may not have a huge impact this election cycle, but by golly there will be hell to pay for kicking traditional banks around. We're putting them on notice."
ABA is asking banks to contribute from $1,000 to $10,000, depending on size, and expects to raise $2 million to $3 million this fall. Friends of Traditional Banking is recommending pledges of $150 to $500 for each of two races and hopes to raise $1 million.
"I'm not discouraged but I am disappointed," Headlee says of banker participation to date. "You'd like this to take off like wildfire but maybe this is a four- to six-year horizon."
Williams said the 13-member board of the Financial Education and Advocacy Initiative will be created soon and will use email and letters to solicit donations from banks.
