A Morgan Stanley Star Wants You to Back His Political Movement
(Bloomberg) -- Eric Grossman doesn’t look like he would want to do anything drastic. The top lawyer at Morgan Stanley is a 51-year-old homeowner in the New York suburbs with twin sons and a seat on the firm’s management committee. He’s another man in a power suit in a midtown Manhattan bank.
He also wants to topple America’s two-party system.
Grossman is trying to build a new party—called the Serve America Movement, or SAM—even though third wheels in American politics tend to have the lasting power of the Free Soilers and the Anti-Masons. His quixotic goal hasn’t deterred donors that include fellow members of Morgan Stanley’s operating committee, the bank’s head of government relations, its top independent board member, and the last chief executive officer, John Mack.
Don’t expect this crusade for unity to turn into the next Women’s March, Tea Party, or even a semi-memorable hashtag. At least so far, this is what resistance to President Donald Trump looks like on Wall Street. Even though tax cuts and reduced regulation have made big banks and corporations some of this era’s big winners, many of their executives squirm when the president abandons global agreements and threatens trade wars. These people also tend to resent and even dread the Democratic Party’s progressive wing, as if it’s out to get them personally. That opens a space for SAM’s unlikely, ambitious and well-moneyed cry for something else.
“Perhaps it’s a fear of arrogance that people are like, ‘Wow you can’t say that, you can’t say you’re going to be a party,’” said Richard Bennett, a partner at investment firm B-FORE Capital who contributed $140,000 to SAM. “I’m like, why not? What else are we going to do? That’s the only thing that’s going to fix it.”
SAM stands against divisiveness, but what it stands for isn't obvious. One Morgan Stanley executive who donated admitted he doesn’t know anything about it, he just wanted to help a friend’s pet cause.
SAM’s upbeat website, with no specifics on immigration, reproductive rights, or the health-care system, can’t clear up big questions. The principles are so broad and cheerful—“applying America’s innovative spirit,” “a strong, clear-eyed, values-based leader,” and “the vitality of local communities”—that they have the ring of taglines for a Silicon Valley startup that hasn’t put out a product yet.
This inoffensive flavor makes sense for a political project backed by executives from Morgan Stanley, a big bank with a particularly understated political style. At JPMorgan Chase & Co., by contrast, CEO Jamie Dimon devoted pages of this year’s annual letter to praising Trump’s tax cuts while warning against isolationism. And Goldman Sachs Group Inc. has perfected a pipeline to Washington, sending executives Gary Cohn and Dina Powell for stints in Trump’s White House.
The financial types backing SAM have taken stock of the American landscape and decided the overarching crisis isn’t guns, opioids, climate change or the treatment of immigrants—it’s divisiveness. SAM thinks it has a shot at winning by preaching unity, and it is in vogue to make public pleas for politeness. Some elected officials have had more to say about White House press secretary Sarah Huckabee Sanders being asked to leave a Virginia restaurant than the poisoned water in Flint, Michigan.
“Let’s have civil dialogue,” said Stephanie Miner, a former Syracuse mayor and once a top New York Democrat. SAM announced plans for her to run under its banner in the race for governor, with a longtime Republican lieutenant. The favorite is Democratic incumbent Andrew Cuomo, already a darling of the establishment center.
In some ways, SAM’s timing for its understated arrival on the political scene has been excellent. The Trump immigration policy separating thousands of children from families who crossed the border illegally caused top GOP strategist Steve Schmidt to dump the party. Across the aisle, in New York, 28-year-old Democratic socialist Alexandria Ocasio-Cortez just toppled congressional powerhouse Joe Crowley, the kind of primary upset that threatens finance-friendly moderates.
Grossman, who wouldn’t comment for this story, has well-heeled friends at the bank who like what he’s doing. Even Vice Chairman Tom Nides, a top bundler for Hillary Clinton, borrowed SAM’s peppy vibe: “I support Democrat candidates, period. That said, I think it’s great when people get involved in the political process, even if I disagree with them.” Grossman and his professional peers have sent more than $1.3 million to SAM, according to filings. Donations so far include $50,000 from investment-management head Dan Simkowitz and $10,000 each from Mack, director Tom Glocer, and former litigation co-head Jim Cusick.
That’s pocket change compared with the cash corporations can unleash but a remarkable sum for a political project with no track record. And contributions have popped up from outside Morgan Stanley. The biggest amount, more than $900,000, came from former tobacco executive Charles Wall.
SAM wants to be more than a party backed by bankers and lawyers, so its officials don’t like to emphasize New York roots. The group did its first big voter survey in Kansas, and says it has cash coming in from small donors across the U.S. The headquarters, with a handful of staffers, is located inside a co-working space in Denver.
SAM CEO Sarah Lenti argued that the early infusion of Wall Street money doesn’t mean anything. “Major donors are probably going to be finance or lawyers or Hollywood,” said Lenti, who was a spokesperson for John McCain and a research consultant to Mitt Romney. “You have to be financed somehow.”
SAM is far from the first attempt to find a sweet spot in the middle of the U.S. political spectrum. Other groups insisting on centrism include Third Way and No Labels. Michael R. Bloomberg, the owner of this news service, has pledged to spend $80 million in the upcoming midterm elections, mostly in support of Democratic congressional candidates, according to a report in the New York Times.
Grossman is the kind of big-time bank attorney who made it into the club of Wall Street lawyers that flew to the Trianon Palace Versailles hotel outside Paris in 2016 to talk shop. He isn’t enrolled in a party, and he's donated about $28,000 outside of SAM, money that tended to go to moderate Democrats and Morgan Stanley’s Republican-leaning political action committee. He played rugby at Hamilton College, got his law degree at Fordham University, and spent a few years moonlighting as an agent for baseball star Darryl Strawberry. At Morgan Stanley, he’s lately been seen around the office wearing SAM cufflinks.
He decided to do something on the day after Trump won the White House, according to SAM’s website. Grossman started by rallying friends including Scott Muller, once general counsel at the Central Intelligence Agency and now SAM’s chairman. Deep-pocketed people were ready to give it a try. “They told me all of the things they thought it was going to cost,” said Wall, who was vice chairman of Philip Morris International Inc. until 2010. “And I said, ‘I’m in. And here’s the amount I’m in for.’”
He had an even better message for them: “Come back to me when you need some more.”
©2018 Bloomberg L.P.