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Citigroup has informed staff they must seek pre-approval from the company before making any donations to the Harris-Walz campaign.
In a memo sent August 6 reported by Business Insider, the investment bank informed staff across four of its five business units, with only the US consumer banking division exempt from the mandate.
Citi must keep employees in check with their donations due to the Securities and Exchange Commission's “pay-to-play” rule that bans workers at banks and hedge funds from making contributions above $350 to state or local officials.
Why is Citi telling employees to get approval before making donations?
The rule is designed to keep financial firms from attempting to influence politicians in the hope that they will subsequently secure business favors.
Organizations like Citi face major fines and penalties if their employees do not comply with the SEC’s rule. If an employee is found to have made such a donation, the bank receives a two-year ban on compensation for providing advisory services to the Government.
Earlier in 2024, the SEC reached a $60,000 settlement with Wayzata Investment Partners over a donation made to a member of the Minnesota State Board of Investment (SBI).
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With Kamala Harris’ running mate, Tim Walz, serving as Governor of Minnesota since 2019, banks like Citi across Wall Street must keep their Democrat-leaning employees in check with the rule.
Former President Trump, Senator Vance, and Vice President Harris are not recognized as “government officials,” under the rule.
Accordingly, employees at Citi who wish to donate to the Trump-Vance campaign do not require pre-approval from their employer, except for some roles including “Municipal Finance Professionals,” “Covered Associates,” or any public-sector facing business positions, Business Insider reported. Those employees are also banned from donating to the Harris-Walz campaign.
The SEC rule also applies to employees who donated prior to joining the bank. In 2022, Bloomberg reported JPMorgan had been advising a Tallahassee, Florida pension fund for free after an executive at the bank made a $1,000 donation to a mayoral re-election campaign.
What are other banks doing about employee donations to political campaigns?
Citi’s Wall Street peers have previously introduced similar bans or approval notices for their employees. In 2016, Goldman Sachs banned high-ranking staff from donating money to campaigns including that of Donald Trump’s.
Citi also introduced a pre-approval policy in 2016 when Trump ran alongside Mike Pence, who was the Governor of Indiana at the time.
It’s not clear if other Wall Street giants like JPMorgan, Goldman Sachs, and Bank of America have similarly issued a pre-approval notice or complete ban to employees ahead of the 2024 US Presidential Election.
Citi implemented a similar policy in 2016 when Trump selected then-governor of Indiana Mike Pence as his running mate.
Some individuals have criticized the SEC’s rule and the impact it could have on employees, given that in this election it is only donations to the Democratic campaign that are banned at investment firms.
Speaking to Business Insider, Professor Patricia Crouse told Business Insider: “To sort of single out one campaign over the other, whatever the reason is — and there's regulation in place there — it looks very political," she said.
"You want to be able to support your candidates," she continued. "And if you can't do that, I think it makes you feel left out,” suggesting that employee morale may suffer as a result of the rule.
