By Svea Herbst-Bayliss
Early this year, a prominent billionaire tried several times to organize a fundraiser for presidential candidate Pete Buttigieg, a moderate who gained favor among Wall Street Democrats.
No one responded to the outreach, and the fundraiser never happened, two people familiar with the matter said.
That was just one sign that Wall Street has become a detour on the road to the White House, more than a dozen hedge fund managers, bankers and political analysts told Reuters.
Wealthy bigwigs who were once super-fundraisers now find themselves largely sidelined ahead of the Nov. 3 presidential election.
The financial industry has so far donated $83 million to the 2020 presidential campaigns of Republican President Donald Trump and Democratic candidate Joe Biden, according to Center for Responsive Politics data through July 31.
Although that figure is up 6% from the same period in 2016, the industry’s proportion of overall dollars donated has fallen to 9% from 14%.
“Eight years ago, we were super important. Four years ago, we were very important. And now we are no longer as relevant or important,” said one billionaire hedge fund manager who, like most, spoke on the condition of anonymity to avoid backlash. “I’ve got a lot less influence.”
Wall Street’s influence in elections is waning because its money is not as critical as it once was as grassroots contributions soar. And a harsh political and economic climate makes politicians and bankers want to steer clear of each other.
In the 2016 election, 26% of Trump’s donations came from individuals contributing less than $200 while 19% of Clinton’s donations fit that profile, according to the Center for Responsive Politics.
Those were higher than prior election cycles, and the trend has only accelerated since then, especially for candidates who promise to shake up the establishment. Nearly 80% of New York Representative Alexandria Ocasio-Cortez’ fundraising comes from small individual donations, according to CRP data.
“The big bundlers are becoming less and less relevant,” said Robert Wolf, a former UBS Group AG executive and prominent Democratic fundraiser, referring to those who amass contributions for campaigns. “This change has been coming since the 2008 financial crisis and became really noticeable in 2016.”
When Wall Street’s political clout was at its peak, candidates and donors would rub elbows over cocktails and hors d’oeuvres at posh fundraising parties.
The coronavirus pandemic has put a stop to that, while also gutting the economy and throwing millions of Americans out of work.
That makes the optics of schmoozing with wealthy Wall Streeters untenable for candidates mindful of the roasting Democratic candidate Hillary Clinton received for paid talks to Goldman Sachs bankers in 2016.
Biden, whose campaign declined to comment, has mostly turned a cold shoulder to the industry, though he attended at least one $35,000-a-head Zoom fundraiser this summer with financiers, according to a participant.
In his three decades as a Delaware senator, Biden was closer to Wall Street. Notably, he backed tough personal bankruptcy rules favored by banks and credit-card companies, many of which were based in his state.
Even so, he doesn’t have a personal network on Wall Street as candidates like Clinton had, and has cast himself as a defender of working-class Americans and labor unions.
“Biden doesn’t really like rich people and doesn’t see himself as a Wall Street person,” said Jeff Hauser, founder of Revolving Door Project, which scrutinizes executive branch appointments.
Trump, who was born and spent his business career in New York, has had warmer relations with Wall Street. But even he is not relying on donations from the financial industry. The Trump campaign did not respond to requests for comment.
The president, who appointed former bankers to his cabinet, has this year consulted with bankers and hedge fund managers, including Steven A. Cohen and Kenneth Griffin, on how to reopen the economy after coronavirus.
In August, he attended a Long Island fundraiser hosted by billionaire hedge fund manager John Paulson, according to someone apprised of the event.
However, Trump portrays himself as a straight-talking, anti-elitist candidate and occasionally needles people like JPMorgan Chase & Co CEO Jamie Dimon on Twitter.
Just as candidates want to distance themselves from Wall Street, finance types do not want to attract attention with big public donations.
Financiers fear the country’s economic crisis and deep political divides may make them – and their firms – targets for criticism from both the political left and right.
“Trump has disrupted the whole circuitry of Wall Street being involved in elections,” said Anthony Scaramucci, who served as Trump’s communications director and is now an opponent.
Even some finance executives who support Trump and have benefited from tax cuts and deregulation during his tenure said they fear retribution for publicly supporting him.
Nevertheless, Wall Street detractors say the Wall Street quietly retains outsize influence because of its deep pockets and strategic lobbying.
Dennis Kelleher, president of nonprofit group Better Markets, calls the industry’s “mountain of money” dangerous. “Small dollar contributions simply cannot compete with that at the presidential level,” he said.
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