Democrats Cozy Up to Wall Street While Shunning Corporate Cash

(Bloomberg Businessweek) -- In February, Pete Buttigieg stepped into the Manhattan office of Wall Street veteran Charles Myers to talk politics over deli sandwiches. Citigroup Inc. Managing Director Yann Coatanlem hosted a fundraiser in March for Kamala Harris at his Fifth Avenue apartment, where she shook the paw of the banker’s labradoodle. Three days later, former Goldman Sachs Group Inc. partner Bruce Heyman raised more than $100,000 for Amy Klobuchar at his home in Chicago. He’s planning an event for Joe Biden this fall.

The mayor of South Bend, Ind., the senators from California and Minnesota, and the ex-vice president are among the Democratic presidential candidates disavowing corporate cash, lobbyist checks, or the super PAC system. They’re trying to outdo each other with promises to finance their campaigns with grassroots contributions. But while they play down the role of money and influence, longtime Wall Street donors who have both say little has changed. “I’ve talked to about half of them, and I have not run into a single one who said, ‘Hey, you worked at Goldman Sachs, I can’t take your money,’ ” says Heyman, who helped elect Barack Obama by collecting checks from friends, and later became his ambassador to Canada. “I’ve not heard that—ever.”

Wall Street has long been a deep well from which presidential candidates draw hundreds of millions of dollars for advertising, travel, and staff. As the presidential race gears up, almost the entire Democratic field is hitting up the industry’s donors, according to money manager Marc Lasry, who says he’s already met with about 10 Democrats. “At the end of the day, candidates need money,” says Lasry, who was a bundler for Hillary Clinton in 2016, runs Avenue Capital Group, and co-owns the Milwaukee Bucks.

There is one notable difference. “In the past, there was no candidate who didn’t come to New York, Chicago, L.A. for money,” says Lasry. “Today, there are two candidates who aren’t doing that—Elizabeth Warren and Bernie Sanders.” Few bankers would want to promote those senators anyhow. This month, Vermont’s Sanders proposed capping credit card interest rates, calling banks “modern-day loan sharks.” Warren, from Massachusetts, has pitched a tax on family assets above $50 million to wipe out student debt. She wants to jail executives whose companies’ negligence causes harm, citing bank bosses and the financial crisis.

Their rivals are giving the sense that they share the same rage about the influence of special interests—including multinational corporations, Wall Street, and Silicon Valley. But while the candidates seek to polish their populist appeal, they still need to raise hundreds of millions of dollars to get to June’s Democratic debates in Miami, the Iowa caucuses next February, and the end of primary season in June 2020.

To critics, accepting money from Wall Street executives and investors but not corporate political action committees or lobbyists has the whiff of hypocrisy. “It’s hard to believe that they think that campaign contributions from wealthy Wall Street donors might not also be a liability,” says Ann Ravel, a former chairperson of the Federal Election Commission. But the field of candidates is crowded. The need to fight off so many rivals “is a strong motivator for them to accept it anyway.”

Near the end of April, Buttigieg said he was returning $30,250 from lobbyists. Two days later, Biden said he was rejecting support from super PACs to increase his appeal to middle-class voters. Super PACs blossomed after the Supreme Court’s 2010 Citizens United decision, and they now raise unlimited amounts from companies and people. New York’s Kirsten Gillibrand, who was a corporate lawyer before becoming a senator, and her New Jersey colleague Cory Booker, a Wall Street favorite for years, have both said they won’t take money from corporate PACs. But Buttigieg, Biden, Gillibrand, and Booker are meeting with bankers and investors to talk policy or raise money. Those four campaigns didn't respond to requests for comment. Wall Street fundraisers often ask guests to give a candidate $2,800, the most allowed in the primaries.

President Donald Trump seems to have few qualms about big money. Last week, Cantor Fitzgerald LP boss Howard Lutnick raised over $5 million at his triplex penthouse for Trump’s reelection, two days after his campaign took in almost as much at the New Orleans home of First Bank & Trust director Joe Canizaro.

Robert Wolf, who ran UBS Group AG’s Americas unit, says he’s already donated to nine Democratic presidential candidates and plans to meet with about 15. “You have to, more than ever, be involved,” says Wolf, who started the strategy and investment firm 32 Advisors.

Besides Buttigieg, Myers has had John Hickenlooper, the ex-governor of Colorado, and Jay Inslee, Washington’s governor, drop by his office for what he calls policy lunches. He says the idea isn’t to get them to go easy on Wall Street. What he really wants is to resist what he sees as the party’s socialist tilt while fighting Trump. “I don’t feel embarrassed at all,” says Myers, who was vice chairman of Evercore Inc. before he started Signum Global Advisors, which does policy research for finance firms. “Running for president and winning a general election is incredibly expensive, and the other side will raise enormous amounts of money.” He’s right so far: Trump’s reelection campaign and joint fundraising committees raised $38.3 million in the first quarter of 2019. Sanders, the Democratic contender with the most cash, raised $18.2 million. Harris raised about $12 million, with only about 37 percent in amounts of $200 or less.

At the fundraiser hosted by Citigroup’s Coatanlem, his labradoodle, named Possum, started barking just before the senator addressed guests, according to a person there. “I agree with you,” Harris told the dog. “There’s a lot to bark about.”

To contact the editor responsible for this story: Sara Forden at sforden@bloomberg.net, Paula DwyerPat Regnier

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