Democratic Party ad in Pa. Senate race targets Toomey’s connections to Wall Street

Democratic ad targets Toomey in Pa. Senate race

HARRISBURG, Pa. — The first negative TV ad against the Republican U.S. Senate candidate in Pennsylvania’s general-election campaign for Sen. Arlen Specter’s seat began running Friday in the highly competitive race.

The Democratic Senatorial Campaign Committee sponsored the ad, which portrays Republican Pat Toomey as a champion of Wall Street and the financial instruments that toppled some financial institutions beginning in 2008.

Toomey is opposed by Democratic Rep. Joe Sestak, a two-term congressman from the Philadelphia suburbs and former Navy vice admiral. The men are seeking the seat long held by Specter, a Republican-turned-Democrat whom Sestak beat in the primary.

Toomey is a former three-term House member from the Allentown area who left Congress in 2005 and once worked in international finance.

For weeks, ads by Toomey and the U.S. Chamber of Commerce attacking Sestak have saturated Pennsylvania’s airwaves.

The campaign committee would not say how much it is spending on the 30-second ad or where it is running. The Toomey campaign, however, said that the committee is spending more than $300,000 and that the ad is running statewide.

The ad seeks to link Toomey to troublesome derivatives and makes a questionable claim that he wrote a 1999 law while in Congress to “weaken oversight of Wall Street.”

In the 1980s, he traded currency and interest-rate swaps for two New York banks, but not the credit default swaps that insured mortgage-backed securities.

Prior to 1999, the Depression-era Glass-Steagall Act prohibited lending banks from underwriting securities or selling insurance to prevent federally insured savings deposits from being used to buy risky securities.

But the 1999 financial services deregulation law removed those walls, in theory allowing the creation of “too-big-to-fail” financial institutions that could imperil the personal savings of Americans by making ill-conceived bets in securities markets.

Toomey voted for the bill, and on his congressional Web site he wrote that he “relied heavily on his previous work experience in investment banking and international financial services to help craft” it.

While some economists and politicians say the new law left open the door to Wall Street’s meltdown, others say it softened the blow of a financial crisis that occurred because of lax home-lending standards.

With the economy and the national debt major themes in the campaign, Sestak and Toomey both have already outlined why they think the other is to blame.