Wall Street corporate Democratic donors are horrified at this year's crop of presidential candidates, and apparently if Dems don't lay off the "Socialism" soon, those billions are going to just have to go to Trump for a second term.
One night in early April, roughly 20 of the Democratic Party’s highest-profile donors from the financial industry sat down over dinner to discuss how exactly they were feeling about the 2020 presidential race. For the most part, it wasn’t great.
Convened by two veterans of liberal fund-raising — investors Steven Rattner and Blair Effron — the group had no hard-and-fast agenda except to share notes on the overflowing field of candidates. The crowd of Democratic heavyweights, including Clinton-administration Treasury secretary and Goldman Sachs and Citi alum Robert Rubin, former ambassador to France Jane Hartley, and venture capitalist Deven Parekh, knew most of the contenders well. But coming to some kind of consensus, picking a plausible candidate they felt they could all live with and throw their considerable money behind — that was a far-fetched proposition.
“There’s tremendous fear,” said one banker who was there. The candidates who had long cultivated relationships with Wall Street — such as Cory Booker and Kirsten Gillibrand — were struggling to gain traction and had grown more hostile to finance as their party had, too. Joe Biden, leading in early polls, had a comforting history in the Obama White House and a reputation as an Establishment Democrat but had never, until a few months ago, maintained any meaningful relationship with Wall Street, hadn’t even announced his candidacy yet, and struck many bankers as a dubious bet to beat Donald Trump. Nearly everyone else in the field, the financiers felt, was being pulled leftward by Bernie Sanders (the preposterously well-funded contender they considered too crazy to even imagine in the White House) and Elizabeth Warren (less crazy, Democrats on Wall Street think, and way more competent). “She would torture them,” one banker told me. “Warren strikes fear in their hearts,” explained a New York executive close to banking leaders from both parties — so much fear that such investors often speak of the U.S. senator from Massachusetts, a former law professor and consumer advocate, as a co-front-runner with Sanders. “How do we come up with an alternative?” asked one person at the dinner.
There were a few options, none perfect. Beto O’Rourke had recently launched his campaign, and his congressional record was essentially a centrist-shaped blank slate. Pete Buttigieg was a McKinsey alum who came from the Rust Belt but talked like a Silicon Valley exec or an Obama Treasury official, but no one, yet, took him seriously.
Kamala Harris was a favorite of many in the room. The U.S. senator from California now describes herself as a populist and highlighted a past confrontation with JPMorgan CEO Jamie Dimon over foreclosures in her pre-campaign book, but in 2012, as California’s attorney general, she passed on prosecuting OneWest and its CEO, Steven Mnuchin. In this cycle, she has been the Democrat perhaps most active in seeking Wall Street money (Citi vice-chairman Ray McGuire and Pine Street partner Brian Mathis are helping with her Wall Street outreach, and she recently headlined a fund-raiser hosted by LionTree CEO Aryeh Bourkoff) and occasionally its advice (BlackRock’s Michael Pyle, an Obama-administration alum, is advising her on economics). “People are generally in search of a candidate who has the right set of views, has the right character, but also can win,” Rattner told me later. “Right now, it is very hard to see who checks all three boxes.”
There was no agreement. By evening’s end, multiple donors walked away planning to write checks to three or four or five candidates — hoping they stay relatively moderate — rather than going all in on any one. Among the committed Democrats on Wall Street, this wait-and-see, as-long-as-it’s-not-Bernie-or-Elizabeth posture has become the norm. “This is like venture investing. You really don’t know who’s going to break out, but your hope is you have a good portfolio and that one of these investments breaks out,” Bruce Heyman, a former Goldman managing director and ambassador to Canada, told me.
Of course, these longtime donors are more committed to the Democrats than the average guy on Wall Street. Two years ago, Trump seemed noxious enough that Democrats (reasonably) hoped to continue growing their considerable advantage over Republicans in the New York finance set. But one GOP-driven tax cut and one leftward shift in the Democratic Party later, a worried handful of bankers is considering turning that story on its head. “They’re too far left! They’re too far left!” said Alex Sanchez, CEO of the Florida Bankers Association. “I mean, honestly, if it’s Bernie versus Trump, I have no fucking idea what I’m going to do,” one Democratic hedge funder told me. “Maybe I won’t vote.”
Democratic donors aren’t especially worried about policy; few have sussed out where candidates stand on Dodd-Frank or the carried-interest tax loophole, and few believe that, aside from Sanders or Warren, any contenders are likely to make an aggressive new push for regulation as president. What agitates them instead is — in a replay of the alienation they felt during the Obama presidency thanks to a few stray “fat cats” comments — how Democratic rhetoric threatens their sense of status. No moment crystallized the new reality more than when former Colorado governor John Hickenlooper — a centrist candidate who was a prominent business owner in Denver before entering politics — refused to even call himself a capitalist in a Morning Joe interview in March.
Before Trump won, Hillary Clinton had outraised him by a margin of more than four to one among the financial crowd, which had long regarded him as a pariah because of his shady record and bankruptcies. Now? “The anti-corporate, anti–Wall Street direction of the Democratic Party is driving Democrats into the Trump camp, which is, in most cases, the last place they want to be,” said Kathryn Wylde, CEO of the Partnership for New York City, the business group that counts among its members all of the city’s major financial institutions. “The fact that he’s raised as much money as he has is a reflection of how many Democrats are holding their nose and supporting him because they feel demonized by the Democrats.” In mid-April, Trump’s team revealed it had raised over $30 million in the first quarter of 2019, slightly more than the top two Democratic candidates combined. If you add up all the Democrats’ dollars, the challengers are way ahead — but among donors, and indeed among the candidates themselves, the perception remains that the president is accumulating a real edge. Meanwhile, Goldman released its 2020 outlook: Trump, the firm concluded, now has a “narrow advantage.” Even Paul Singer, the GOP hedge-fund magnate who backed efforts to defeat Trump in 2016 — and who funds the Washington Free Beacon, which first paid for the anti-Trump research that later became “the dossier” — stopped by a small Trump fund-raising roundtable in New York late last year. “Well, we must be doing well now that Paul’s here,” Trump said.
“Wall Street for Trump is the reverse Bradley effect,” said hedge-fund manager Anthony Scaramucci, the Republican fund-raiser who (very) briefly served as Trump’s White House communications director, referring to the theory that voters overstate their support for nonwhite candidates in polls. “They all secretly love him, but because of their clients and the polarity, they don’t want to say it out loud.”
Over coffee recently in midtown, an investment pro with a long history in Democratic politics described the struggle to resist the unexpected pull of Trump. “What matters more?” he asked, looking up at me. “My social values or my paycheck?”
This story makes Liz Warren look like the person Wall Street is most afraid of, and Harris the least. That's very good for Warren in my book, not so good for Harris.
The real problem is Wall Street wants to keep him.
Maybe we don't need Wall Street?
Just an idea, Dems.