Running Against Wall Street May Not Work in Home of JPMorgan
(Bloomberg) — Mary Jo Kilroy is running against Wall Street again, echoing a message that won her a first term in Congress two years ago. This time, the Ohio Democrat is in danger of losing her seat to a former bank lobbyist. In the fall of 2008, as financial markets tumbled and lawmakers approved a $700 billion bank bailout, Barack Obama led Kilroy and other Democrats in harnessing voter anger to win the White House and score big gains in the House and Senate.
Kilroy defeated Republican Steve Stivers by about 2,300 votes after a monthlong recount. Her struggle to get re-elected in a rematch with Stivers sums up her party's failure to replicate that strategy even after passing the most sweeping new financial-market rules in seven decades. For many voters, concern about jobs overwhelms ill-feeling toward the banks.
"We need Wall Street," said Peggy Kolodziej, 63, a nurse from Columbus in Kilroy's 15th congressional district. "We don't need those million-dollar bonuses, but we need them to help the economy grow." The populist tone seems off-key in Columbus, Ohio's capital and largest city, because this is where Wall Street meets Main Street. In the McCoy Center, an office complex on 150 acres on the outskirts of the city, JPMorgan Chase & Co., Columbus's largest private employer, has its biggest facility in the world. Some 10,000 employees are housed in a four-story building so wide that it has roughly the same square footage as the 102- story Empire State Building in New York.
JPMorgan, whose Columbus workforce ranks behind only those of the state government and Ohio State University, employs a total of 16,800 people in this city of about 750,000, according to Jennifer Zuccarelli, a company spokeswoman. That has helped make the city's financial-services industry a bright spot in a state in need of success stories. About 54,000 residents work in the industry, according to the local Chamber of Commerce.
The jobless rate at the end of August was 8.3 percent in Columbus, compared with 10.1 percent for the state and 9.6 percent nationwide. The Bloomberg Columbus Ohio Index of the economy, which measures the performance of 60 companies, including locally based firms such as Huntington Bancshares Inc., has risen 10 percent this year.
Taking on Dimon
The financial industry's role in the local economy hasn't stopped Kilroy, 61, a critic of U.S. banks during negotiations over the market-rules overhaul that Obama signed this year, from taking on JPMorgan. In 2009, she and other lawmakers pressed Chief Executive Officer Jamie Dimon on whether the New York- based bank was outsourcing back-office jobs to India. John Donnelly, the executive vice president for human resources, rejected that concern, writing to Kilroy at the time, "In Ohio, we have 17,600 employees; over 3,400 of them live in your congressional district." Kilroy defended her position in an interview this month.
"Many people were concerned their jobs would be outsourced," she said. "They were happy to see me take a stand." JPMorgan spokeswoman Zuccarelli declined to comment. Kilroy's focus on the financial industry has less impact with voters now, said pollster John Anzalone. "You just have to pick your medicine, and the Wall Street stuff is just old news," Anzalone said in an e-mail. Most Democratic incumbents, he said, are more focused on distancing themselves from House Speaker Nancy Pelosi's agenda and showing their independence from Congress.
Trailing in Polls
Kilroy was 9 points behind Stivers in a poll conducted Sept. 28-30 by the Hill newspaper. The nonpartisan Cook Political Report rates the race "lean Republican." Kilroy, a former social worker who suffers from multiple sclerosis, has backed Obama's health-care bill and helped shape proposals to curb executive pay during her two years in Congress.
Obama campaigned in Columbus on Oct. 17 for her and other Democrats, his fourth visit to the city as president.
Kilroy was also vocal in her support of the new financial regulations and participated in talks on merging the House and Senate bills as a member of the Financial Services Committee. The law includes provisions for a consumer-protection agency and forces banks to shift derivatives-trading operations into separate subsidiaries — a requirement that JPMorgan's Dimon has called "an operational nightmare."
"Because of this bill, Wall Street will no longer be able to act like a casino," Kilroy said on the House floor on July 21, the day Obama signed the bill into law.
'Got Off Easy'
Her criticism resonates with some Columbus residents, who remain angry that Congress approved the bank bailout with taxpayer funds. "Wall Street got off easy," said Michael Mercil, 56, an artist and teacher who supports Kilroy.
"So many of the firms are standing because the taxpayers bailed them out." Kilroy condemned Stivers as a "bank lobbyist" in 2008 and has reprised that attack this year against the former state senator who lobbied for Bank One Corp. of Columbus before it was acquired in 2004 by JPMorgan. "When another corporate lobbyist, like bank lobbyist Steve Stivers, runs for Congress, they pony up big bucks because Bank Man Steve is one of them," an announcer says in one of Kilroy's ads. "Do we really need another lobbyist in Washington?"
Stivers, 45, an Eagle Scout who serves in the Ohio National Guard, dismisses that criticism. "Those charges are silly; people don't believe them," Stivers said. "I'm proud of every minute I spent at Bank One. I helped them create jobs. I helped them make Ohio a better place to do business. I'm not going to run from that." Kilroy employed a "populist attack" on banks in the last campaign "because we had a financial crisis," said Stivers.
"I would argue it didn't work then. It's working even less now." He said he wants more financial-services jobs in the area "because they're good jobs, they're clean jobs, they're good- paying jobs, they're jobs you can raise a family on." The finance, insurance and real estate industries have reciprocated by donating $276,000 to his campaign, with $60,000 coming from the employees and political arms of Huntington Bancshares, JP Morgan and Nationwide Financial Services Inc., according to the Center for Responsive Politics.
Kilroy's biggest source of money is $77,810 from members of Emily's List, which works to elect Democratic women who favor abortion rights. She's also gotten $10,000 donations from unions such as the United Steelworkers.
Embracing the Banks
The support the financial industry gets in Columbus cuts across party lines. While Mayor Michael Coleman is a Democrat like Kilroy, he has cooperated with banks. As Congress debated the 2008 bailout, Coleman and business leaders in the city were negotiating with JPMorgan to ensure the bank maintained its workforce.
Coleman joined with Governor Ted Strickland and the Chamber of Commerce to assemble a package of tax incentives to bring some of the jobs from Washington Mutual Inc. to the city after the collapsed thrift's branches were bought by JPMorgan. Since 2008, the company said it has added more than 2,000 jobs.
"Every time there's a merger of the company, we've picked up business," said Michael Stevens, deputy director of the city's Department of Development. "The mayor has a great working relationship with Jamie Dimon."