Why the wealthy voted for Obama and higher taxes

For several years, I’ve been writing about Bushenfreude, the phenomenon of angry yuppies—who’ve hugely benefited from President Bush’s tax cuts—funding angry, populist Democratic campaigns. I’ve theorized that people who work in financial services and related fields have become so outraged and alienated by the incompetence, crass social conservatism, and repeated insults to the nation’s intelligence, of the Bush-era Republican Party, that they’re voting with their hearts and heads instead of their wallets.

Last week’s election was perhaps Bushenfreude’s grandest day. As the campaign entered its final weeks, Barack Obama, who pledged to unite the country, singled out one group of people for ridicule: those making more than $250,000. At his rallies, he would ask for a show of hands of those making less than one-quarter of $1 million per year. Then he’d look around, laugh, and note that those in the virtuous majority would get their taxes cut, while the rich among them would be hit with a tax increase. And yet the exit polls show, the rich—and yes, if you make $250,000 or more you’re rich—went for Obama by bigger margins than did the merely well-off. If the exit polls are to be believed, those making $200,000 or more (6 percent of the electorate) voted for Obama 52-46, while McCain won the merely well-off ($100,000 to $150,000 by a 51-48 margin and $150,000 to $200,000 by a 50-48 margin).

Right-wingers tend to dismiss such numbers as the voting behavior of trust funders or gazillionaires—people who have so much money that they just don’t care about taxes. That may explain a portion of Bushenfreude. But there just aren’t that many trust funders out there. Rather, it’s clear that the nation’s mass affluent—Steve the lawyer, Colby the financial services executive, Ari the highly paid media big shot—are trending Democratic, especially on the coasts. Indeed, Bushenfreude is not necessarily a nationwide phenomenon. As Andrew Gelman notes in the book “Red State, Blue State, Rich State, Poor State,” the rich in poor states are likely to stick with the Republicans.

But in the ground zero of Bushenfreude, Fairfield County, Conn., it was practically an epidemic last week. Bushenfreude’s most prominent victim was Rep. Chris Shays, the last Republican congressman east of the Hudson River. For the past several cycles, Shays, who played a moderate in his home district but was mainly an enabler of the Bush-DeLay Republicans in Washington, fended off well-financed challengers with relative ease. Last week, he fell victim to Jim Himes. Himes, as this New York Times profile shows, is the ultimate self-made, pissed-off yuppie: a member of Harvard’s crew team, a Rhodes Scholar, a former Goldman Sachs banker, and a resident of Greenwich.

Shays claims he was done in by a Democratic tsunami in Fairfield County and the state. And Connecticut’s county results show Obama ran up a huge 59-41 margin in the county, which includes Bridgeport and Norwalk—densely populated cities with large poor, minority, and working-class populations. But an examination of the presidential votes in several of Fairfield County’s wealthier districts (here are Connecticut’s votes by town) shows the yuppies came out in the thousands to vote for a candidate who pledged to raise their taxes. In the fall of 2003, I first detected Bushenfreude in Westport (No. 5 on Money’s list of 25 wealthiest American towns). The telltale symptom: Howard Dean signs stacked in the back of a brand-new BMW. The signs of an outbreak were legion this year. On our route to school, my kids would count the number of yard signs for Obama and McCain (the results: 6-to-1). On the Saturday morning before the election, I stopped by the Westport Republican headquarters to pick up some McCain-Palin buttons, only to find it locked. On Election Day, Westport voters went for Obama by a 65-35 margin. (That’s bigger than the 60-40 margin Kerry won here in 2004.) Bushenfreude spread from Westport to neighboring towns. In Wilton, just to the north, which Bush carried comfortably in 2004, Obama won 54 percent of the vote.

Perhaps most surprising was the result from Greenwich, Conn. The Versailles of the tri-state metro area, the most golden of the region’s gilded suburbs, the childhood home of George H.W. Bush, went for Obama by a 54-46 margin—the first time Greenwich went Democratic since 1964. Who knew the back-country estates and shoreline mansions were populated with so many traitors to their class? (In the 2004 cage match of New England-born, Yalie aristocrats, George W. Bush beat Kerry 53-47 in Greenwich.) Some towns in Fairfield County were clearly inoculated from Bushenfreude. In New Canaan and Darien, which ranked No. 1 and No. 2, respectively, in Money’s list of 25 wealthiest towns, McCain-Palin won by decent majorities. (In both towns, however, the Republican margins were down significantly from 2004.) What’s the difference between these towns and their neighbors? Well, New Canaan and Darien are wealthier than their sister towns in Fairfield County. (In both, the median income is well more than $200,000.) So perhaps the concern about taxes is more acute there. Another possible explanation is that these towns differ demographically from places like Greenwich and Westport, in that they are less Jewish, and Jews voted heavily for Obama.

While there has been job loss and economic anxiety throughout Fairfield County, I don’t think that economic problems alone explain the big Democratic gains in the region. In Greenwich, economic stress for many people means flying commercial or selling the ski house (while maintaining the summer house on Nantucket). There’s something deeper going on when a town that is home to corporate CEOs, professional athletes, hedge-fund managers, and private-equity barons—the people who gained the most, financially, under the Bush years and who would seem to have the most to lose financially under an Obama administration—flips into the Democratic column. Somewhere in the back country, in a 14,000-square-foot writer’s garret, an erstwhile hedge-fund manager is dictating a book proposal to his assistant, a former senior editor at Fortune who just took a buyout, that explains why many of the wealthy choose to vote for a Democrat, in plain violation of their economic self-interest. Working title: What’s the Matter With Greenwich?

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Court Docs: GOP Donor Secretly Funneled $75k To Coleman Family

The CEO of a major marine technology company is alleging that he was pressured by a friend and associate of Norm Coleman to secretly funnel tens of thousands of dollars to the Senator’s family.

Paul McKim, the founder and CEO of Deep Marine Technology, alleges in a civil suit that Nasser Kazeminy — a longtime Republican donor, friend of Coleman, and DMT shareholder — directed the company to send $75,000 to the Senator and his wife.

The transaction, which occurred in 2007, allegedly went as follows: DMT would make payments for services to Hays Company, even though no services would be rendered. Since Norm Coleman’s wife Laurie worked at Hays, that money would be given to her in the form of ‘salary.’

According to the suit filed against Kazeminy and several other defendants:

In March 2007, Kazeminy began ordering the payments of corporate funds to companies and individuals who tendered no goods or services to DMT for the stated purpose of trying to financially assist United States Senator Norm Coleman of Minnesota. In March 2007, Kazeminy telephoned B.J. Thomas, then DMT’s Chief Financial Officer. In that conversation, Kazeminy told Mr. Thomas that “U.S. Senators don’t make [expletive deleted]” and that he was going to find a way to get money to United States Senator Norm Coleman of Minnesota and wanted to utilize DMT in the process. Mr. Thomas later approached Mr. McKim, asking him whether this was appropriate and whether they should follow Kazeminy’s orders. Mr McKim told him that it was not appropriate and shortly thereafter he also spoke with Kazeminy.”

In this same conversation, Kazeminy told Mr. McKim that he [Kazeminy] would make sure there was paperwork to make it appear as though the payments were made in connection with legitimate transactions, explaining further that Senator Coleman’s wife, Laurie, worked for the Hays Companies, an insurance broker in Minneapolis, and that the payments could be made to Hays for insurance. When Mr. McKin made further objections, Kazeminy repeatedly threatened to fire Mr. McKim, telling him “this is my company” and that he and Mr. Thomas had better follow his orders in paying Hays.

All told, the court documents, which were filed on Monday in a Texas district court, allege that three payments of $25,000 were sent through Hays Company to the Colemans from May 2007 through September 2007. Two of those came without McKim’s approval because Kazeminy went around him. A fourth payment was “in the process of being made” before being stopped by McKim, the suit alleges.

Sen. Coleman was initially asked about these findings on Wednesday, when two investigative reporters from the Minneapolis Star Tribune cornered him at a campaign rally. He ducked their questions.

On Thursday, Coleman’s campaign manager Cullen Sheehan was asked about the issue during a press conference, He claimed that “the lawsuit was withdrawn,” and said he had no further details to offer. “I just know there was a lawsuit filed and it was withdrawn.”

Casey T. Wallace, the attorney representing McKim, confirmed the withdrawal and said he would have more comment later in the day. A person familiar with the case, however, emphasized that while the complaint may have been withdrawn, the charges contained within it were still valid.

“It doesn’t affect that,” said the official. “By withdrawing the complaint and withdrawing the petition, we are not saying now that our allegations are false.”

Requests for comment from McKim and the Coleman campaign went un-returned. But lawyers familiar with Senate ethics law say that if the complaint turns out to be true, Coleman could be in hot water, possibly facing a trial and potentially jail time.

“This is why [Sen]. Ted Stevens just got convicted,” said Brett Kappel of Vorys, Sater, Seymour and Pease LLP. “If this is true and Kazeminy gave a gift — which includes money to a candidate’s family member — it doesn’t mean that you can’t take it, but you would have to report it on [your financial disclosure form]… If he knew about it, and of course, all of this has to be proven to be true, then yeah,” he could go to jail.

Kappel additionally noted that the firm representing McKim in this suit is Haynes and Boone, “a pretty serious law firm that is a major player in Houston. I can’t believe they would have agreed to file this if they didn’t have documentation to support this.”

Kazeminy, a reclusive businessman who serves as chairman of Minnesota-based NJK Holding Corporation, has significant ties to Coleman. The Kazeminy family has contributed more than $75,000 to the Senator directly and has paid for flights for him and (occasionally) his wife to the Bahamas, Paris and Jordan, often described as fact finding missions. Kazeminy is even alleged to have paid for Coleman’s suits, a charge that the Coleman campaign has never denied.

Source: HP