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Biden’s rescue of ‘pro-Democrat’ SVB clients slammed: ‘They’re looking after their own’

The Biden administration’s move to protect customer deposits at Silicon Valley Bank is rankling critics who call it a gift to wealthy Democratic donors in the tech sector — even as mom-and-pop investors are getting burned in the deal.

While depositors including top-tier venture capital firms like Andreesen Horowitz and Sequoia Capital were bailed out, the equity and bondholders were completely wiped out as part of the rescue by state regulators and the Federal Deposit Insurance Corp.

Those included big mutual funds that operate retirements funds for working Americans. Vanguard Group owned nearly 11% of Silicon Valley Bank shares. Alecta Pension Insurance Mutual owned nearly 4.5%, and Franklin Mutual Advisers owned nearly 2%, according to public filings.

“You’ve saved the Democratic donors but who are the equity holders?” one tech insider noted. “Retirement funds bought into this… many are policemen, teachers, firemen just trying to retire.” 

Ninety-eight percent of all political contributions from people who worked at internet companies went to Democrats in 2020, according to data from the Center for Responsive Politics.

President Biden on Monday sought to reassure the US public about the country’s banking system. AFP via Getty Images

Another estimate from a GovPredict analysis of Federal Election Commission data showed that people living in counties considered to be Silicon Valley gave nearly $200 million to Democrats.

“This is a bailout… and the account holders they bailed out are Democrats,” a tech insider told The Post, though he qualified the statement by noting the consensus view that the federal government did the right thing by pledging to make depositors whole.

Silicon Valley Bank is the bank of the Democrats …. they’re looking after their own,” he added. “If it was the Bank of MAGA, what are the chances it would be bailed out? There’s not a chance in hell.”

In a Monday op-ed in the Wall Street Journal, presidential hopeful Vivek Ramaswamy argued that instead of hedging for financial risks, “SVB’s real ‘hedge’ was to curry favor with the Biden administration. 

Treasury Secretary Janet Yellen has ruled out a taxpayer-funded bailout for the bank. AP

He noted that last year, the bank released its ESG report stating that it had committed $5 billion toward “sustainable finance and carbon neutral operations to support a healthier planet.”

Investment strategies predicated on ESG — which stands for environmental, social, and governance — have come under fire, particularly from Republicans and their supporters who claim that asset managers are using “woke” criteria to punish certain industries such as energy and guns.

Since Friday, more than 600 venture capital firms — including deep-pocketed giants Sequoia and Greylock — have signed a statement of support for SVB that says they would plan to continue working with SVB if it is bailed out. The message was heard loud and clear at the White House, critics said.

“The events that unfolded over the past 48 hours have been deeply disappointing and concerning,” the letter said. “In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”


Follow The Post’s coverage of Silicon Valley Bank’s collapse


Over the weekend, pro-Democrat tech investors had slammed the White House for waffling as the fate of SVB’s clients hung in the balance.

One deep-pocketed venture capitalist told The Post that Treasury Secretary Janet Yellen’s statement Sunday throwing cold water on the possibility of a bailout was “pathetic.”

Others said that unlike the financial crisis of 2008, when bankers and government officials were in constant dialogue, there doesn’t appear to even have been much communication to date between the administration and Silicon Valley as to how the government should respond.

“I don’t think the channels are nearly as open as they used to be,” a plugged-in venture capitalist told The Post. “I’m not part of the dialogue, and I don’t know who is.”

Silicon Valley Bank depositors will be made whole despite its collapse, according to the Biden administration. REUTERS

In the end, it’s a good thing that the government stepped in to stave off the crisis, said Mike Molinet, the co-founder and COO of Branch, a California-based tech startup.

“It was absolutely the right move for the government to come in and bear hug this thing,” Molinet told The Post.

“[I’m] talking about the actually tens or even hundreds of thousands of employees that are dependent on payroll that would’ve been locked up,” he said.

“If they didn’t do anything I suspect there would’ve been a panic for everyone with deposits at other banks and would’ve led to runs at other banks.”

Still, another source notes that wealthy depositors could have chosen to insure additional money — beyond the $250,000 guaranteed by the FDIC — but chose not to.

Roughly 96% of deposits were insured as of Dec. 31, 2022, according to regulatory filings.

“Their insurance policy was making sure Biden was elected,” a source adds.