Vilifying Rival, Wall St. Rallies for Senate Ally
New York Times/By NICHOLAS CONFESSORE/ Published: November 18, 2011
The warning has ricocheted around the financial world in recent weeks, in conversations at Midtown restaurants and Washington fund-raisers, carrying urgent appeals for money from financial executives around the Northeast: The battle to re-elect Senator Scott P. Brown, the Republican from Massachusetts, just got a little more interesting.
Of the 20 companies that accounted for the most campaign donations to Mr. Brown, about half were prominent investment or securities firms like Morgan Stanley, Fidelity Investments and Bain Capital. His donors include such blue-chip names as Gary Cohn, the president of Goldman Sachs, and the hedge fund kings John Paulson and Kenneth Griffin.
Mr. Brown, in turn, has been an important ally at critical moments, using his swing vote in the Senate to wring significant concessions out of Democrats on last year’s financial regulation bill, including helping strip out a proposed $19 billion bank tax and weakening a proposal to stop commercial banks from holding large interests in hedge funds and private equity funds.
But the intensity of his relationship with Wall Street was altered in September, when Mr. Brown got a new opponent: Ms. Warren, a law professor and consumer advocate who has described herself as an intellectual godmother of the Occupy Wall Street movement.
Ms. Warren’s relentless manner and withering attacks on predatory lenders have won her enemies from Wall Street to Washington, where as a member of an oversight panel she helped usher in the largest expansion in decades of federal oversight of the financial industry. Now Mr. Brown’s support for the industry — and Ms. Warren’s battles with it — are becoming a defining issue in one of the most hotly contested Senate races and a magnet for special interest money.
“It’s shaping up as a sort of proxy war in the long-running debate over regulation in American life,” said Travis Plunkett, legislative director of the Consumer Federation of America, which has lobbied hard for more regulation of banks. “It’s the mere fact of her existence in the race, simply because she’s sketched out a strong position and is effective.”
Mr. Brown’s relationship with the financial industry owes in part to circumstance. He is one of few Republican senators in a region that is home to the nation’s most important financial centers, providing an open door and friendly ear to a executives who often lean Republican in their political giving but whose representatives in Washington are predominantly Democrats.
And his record on Wall Street issues is hardly one-sided: He provided the crucial 60th vote needed for the financial overhaul, known as Dodd-Frank, which Ms. Warren praised as “the strongest set of financial reforms in three generations” when it passed. And Mr. Brown angered banks in June when he voted against a measure that would have delayed a rule restricting billions of dollars in fees that banks charged merchants for debit card transactions.
But Ms. Warren’s advocacy for tighter financial regulation is so widely abhorred by Wall Street executives, some said, that lingering annoyance over Mr. Brown’s occasional heresies is rapidly evaporating.
“It’s not even about Scott Brown,” said one Wall Street executive, who asked for anonymity to discuss private discussions with his colleagues about the race. “It’s about: Do you want Elizabeth Warren in the Senate?”
Ms. Warren has aggressively promoted her credentials as a defender of the middle class and scourge of the financial industry, boasting in her first television ad that she “worked to expose how Wall Street and the big banks are crushing middle-class families.”
This week, a new union-backed independent expenditure group, Rethink PAC, unveiled ads casting Mr. Brown, the onetime Tea Party populist, as a hypocrite for his ties to Wall Street.
Mr. Brown has emphasized his breaks with the industry, including his call this week for an up-or-down Senate vote on President Obama’s nominee to head the new Consumer Financial Protection Bureau, which Ms. Warren was once the administration’s designee to head.
“Scott Brown looks at every issue on the merits and votes based on what is in the best interest of the people he represents,” said Colin Reed, a spokesman for Mr. Brown’s campaign. “His fund-raising is no different than the Democrats in the Massachusetts congressional delegation. They all accept contributions from the financial industry, as does Elizabeth Warren.”
Wall Street executives are wary of being seen as Mr. Brown’s saviors. But he is nonetheless getting outside help. This month, Crossroads GPS began a half-million dollar advertising campaign seeking to tie Ms. Warren to the anti-Wall Street protesters in New York and around the country.
“Elizabeth Warren sides with extreme left protests,” the ad charges, where “protesters attack police, do drugs, and trash public parks.”
In a sign of how volatile the Wall Street debate has become, Ms. Warren has since sought to distance herself from the Occupy Wall Street movement, describing it as “organic” and calling for demonstrators to obey the law.
In a statement, Mindy Myers, Ms. Warren’s campaign manager, said that “with every means they can, Wall Street and the big banks have already made it clear they are going to try to stop Elizabeth from getting elected.”
Even before Ms. Warren established herself as his likely opponent, Mr. Brown, who does not sit on any of the committees that deal with financial regulation, was among Wall Street’s strongest fund-raisers in Washington.
But several executives said that Ms. Warren’s entry into the campaign in mid-September had sparked renewed interest in Mr. Brown’s re-election.
“We are working very hard for Scott,” said Anthony Scaramucci, the managing partner of Skybridge Capital and a major Wall Street fund-raiser. “Herman Cain is all about 9-9-9, Elizabeth is about 99-1-99. She thinks the 99 percent want to tax the 1 percent 99 percent. It is failed strategy.”
In October, Mr. Brown was feted at a well-attended Washington fund-raiser featuring financial industry, insurance, and real estate lobbyists. Ms. Warren’s campaign sought to capitalize on the event, sending a fund-raising e-mail with the subject line “Wall Street vs. You.” Mr. Brown’s supporters were unfazed.
“People are very excited about him,” said Melissa Edwards, a lobbyist who attended. “People want to help him, and I think she certainly has her supporters who are going to help her.”
Edward Wyatt contributed reporting from Washington.