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. Last Updated: 07/27/2016

U.S. Central Bankers Open Wallets for Bush

NEW YORK -- The U.S. Federal Reserve's regional bankers are voting with their checkbooks for President George W. Bush and his Republican Party.

Advisers and directors of the Fed's 12 regional banks and branches gave $1.4 million to federal campaigns and political action committees in the 2004 elections as of Oct. 15, according to Federal Election Commission records. Those who gave to one party favored Republicans over Democrats by a two-to-one margin.

An examination of 668 bankers, executives, farmers, car dealers and community leaders shows that 224, or one-third, made donations, the records show. Bush got $98,950, or 73 percent more than the $57,250 given to John Kerry, his Democratic challenger in today's election.

"It's very hard to rationalize in any kind of fair-minded way why the Fed permits campaign contributions," said Tom Schlesinger, executive director of the Financial Markets Center, a Philomont, Virginia, group that studies the Fed.

"Anybody who looks closely can fairly come away with the perception that individuals who play an important role in the Fed's governance structure, and therefore the Fed itself, might be tilting their policy one way or another to favor a candidate," he says. "If it's not explicitly prohibited, it ought to be seen as a violation of the Fed's non-partisan spirit."

While chairman Alan Greenspan and other Fed governors avoid funding campaigns, central bank policy allows those who supply it with information about the economy to support candidates.

The Fed's counselors, who serve on boards and advisory committees part-time, are able to keep their political preferences separate from the job of informing the central bank, says J. Larry Nichols, chairman of Oklahoma City-based Devon Energy Corp., the largest U.S. independent oil producer by market capitalization.

"I certainly don't see any conflict between making donations and providing someone with information on how your particular industry and your particular geographic part of the world is doing economically," Nichols said.

Nichols, who meets once a month with the Oklahoma City branch of the Kansas City Fed, gave about $42,200 to candidates of both parties and PACs, FEC records show.

A three-year Fed directorship comes with retainers that range from $5,000 a year for chairmen to $1,500 for branch directors, plus daily stipends for meetings. In addition to their local gatherings, they meet twice per year in Washington with Greenspan and the governors. Advisory panels, which have less authority, meet periodically to share views with Fed staff.

Texas oilman Ray Hunt, chairman of the Dallas Fed's board, led the list of the 668 donors by giving $95,000 to Bush and PACs, which are committees formed by companies and special interest groups to back candidates, the FEC records showed. Hunt declined to comment.

Of Hunt's contributions, $50,000 went to the Republican National Committee, $2,000 to Bush and the rest to congressional candidates, the records showed.

Russell Goldsmith, chief executive officer of City National Bank in Beverly Hills, California, was the biggest contributor listed for Kerry and other Democrats, at $32,000.

Donors who gave only to Republicans spent $515,600 on candidates and PACs, compared with $221,400 from those who donated only to Democrats and PACs. Another $597,500 came from donors to both parties and $45,300 from people who gave solely to political action committees.