Feb. 7 (Bloomberg) -- Senator Christopher Dodd, trailing in presidential polls, ran ahead of his Democratic rivals in the race for money in the last quarter of 2006, propelled by contributions from the financial-services industry that he oversees.

Donations from employees of American International Group Inc., Citigroup Inc. and Merrill Lynch & Co. Inc. helped Dodd, the new chairman of the Senate Banking Committee, raise $3 million over the final three months of last year, according to Federal Election Commission records. The Connecticut Democrat raised more than any other candidate, Democrat or Republican -- even edging New York Senator Hillary Clinton.

All told, employees of financial-services firms contributed more than $1 million of Dodd's total. The Senate banking panel ``is a juice committee,'' said Craig Holman, a lobbyist for Public Citizen, a Washington group that supports tougher ethics laws. ``The industry feels the pressure to give because this is the chairman with oversight over their business affairs.''

Dodd, 62, said in an interview that he has long-standing ties to members of the financial community. ``This is not a newfound relationship,'' he said. ``These people know me best. They've worked with me. I've worked with them. We've been in agreement on various issues; we've been in disagreement on various issues over the years.''

Contributors

Employees of Citigroup, the biggest U.S. financial-services company, and their spouses gave $100,350 from Oct. 1 through Dec. 31, and the company's political action committee contributed $5,000. Employees of AIG, the world's biggest insurer, gave $76,100; at Merrill Lynch, employees and spouses gave $45,500. All three companies are based in New York.

Almost half of the $375,971 in PAC money Dodd raised after the Nov. 7 election that gave Democrats control of Congress came from industries under his committee's jurisdiction.

Jim Jordan, a Democratic consultant who is advising Dodd's campaign, said donors get nothing but good government in return for their money. ``Obviously, there is, and will be, no connection between his fund-raising activities and his official duties,'' Jordan said.

Felix Rohatyn, president of Rohatyn & Associates LLC in New York, says he and his wife have donated to Dodd for years, in part because of a personal relationship cemented during Rohatyn's time as U.S. ambassador to France.

A Very Close Friend

``Chris is a very close and very old friend of ours and, I think, extremely capable,'' said Rohatyn, who gave $2,100. ``Chris is very pro-growth; he is pro-business.''

Dodd last week cited his fund-raising prowess as evidence he will be able to compete with other Democratic presidential hopefuls like Clinton, 59; Illinois Senator Barack Obama, 45; and former North Carolina senator and 2004 vice presidential nominee John Edwards, 53. ``We will be competitive financially,'' Dodd said in a statement.

In the last quarter of 2006, Clinton raised $2.8 million and Obama $105,281 through their Senate campaigns. Edwards didn't start raising money for his presidential campaign until January.

A CNN poll of Democrats last month gave Clinton 34 percent support, Obama 18 percent and Edwards 15 percent. Dodd polled 1 percent. ``I'm competing with the margin of error in most polls,'' Dodd told the Hartford Courant last week.

AIG spokesman Joe Norton declined to comment on any political contributions by the company or employees, other than to say that the FEC report ``speaks for itself.''

Living in Connecticut

Citigroup spokesman Michael Hanretta said many of the company's employees live and work in Connecticut, Dodd's home state. He declined to comment specifically on the donations, though Citigroup rules specify that employees who are active politically must act as individuals, not as company representatives.

``Our employees give to a lot of candidates,'' said Merrill Lynch spokeswoman Selena Morris. ``They're encouraged to participate in the democratic process.''

Dodd began this year with $4.9 million in the bank, less than the $11 million that Clinton had, though more than any of the other Democratic hopefuls. Obama had $516,553; Delaware Senator Joe Biden had $3.6 million.

Obama and Clinton also have the support of some major players in the financial industry. Billionaire investor George Soros donated $2,100 to Obama's exploratory committee; Clinton took in millions from Wall Street for her 2006 re-election and counts Evercore Partners Chairman Roger Altman among her top advisers.

Securities Suits and Bankruptcy

Dodd has a mixed record on issues of concern to the financial-services industry. In 1995, he voted to override then- President Bill Clinton's veto of legislation restricting class- action securities lawsuits. Ten years later, he opposed legislation, long sought by the banking industry, making it harder for individuals to file for bankruptcy.

Dodd's campaign-donation lists are sprinkled with the names of prominent figures from the financial, entertainment and media industries. Among them: William Harrison, former chairman of New York-based JPMorgan Chase & Co., and James Gorman, president of the global wealth management group at Morgan Stanley.

Also contributing were Robert Iger, president of Burbank, California-based Walt Disney Co., and actors Paul Newman and Chevy Chase. Another donor was University of Connecticut basketball coach Jim Calhoun.

To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net; Kristin Jensen in Washington at kjensen@bloomberg.net.

Last Updated: February 7, 2007 10:12 EST