Wall Street donors snub Schumer’s request for help with Senate races as Warren builds momentum

GP: Charles Schumer, Elizabeth Warren 171018
Sen. Minority Leader Charles Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., make their way to a news conference on the east lawn of the Capitol. Tom Williams | CQ-Roll Call, Inc. | Getty Images

The bitter feud between Sen. Elizabeth Warren and Wall Street is spilling into Democrats’ efforts to take back the Senate next year.

Some finance executives have recently told Senate Minority Leader Chuck Schumer that they are, for the moment, holding back from donating to Democrats running for Senate in 2020 due to their concerns with Warren becoming a frontrunner in the race for the party’s presidential nomination, according to people familiar with the conversations. These people spoke on the condition of anonymity due to the private nature of the talks.

The move is intended to put pressure on party leadership and Schumer, who represents New York and has received millions of dollars in donations from Wall Street, to distance themselves from Warren’s economic populism.

These financiers, which include hedge fund managers and private equity executives, are also worried that Warren’s policies, were she to defeat President Donald Trump, could be detrimental to their businesses. They believe Republicans could keep her potential administration in check if the GOP holds onto or expand its Senate majority. Republicans have a 53-47 majority in the Senate; Democrats need to flip a net of four seats to take control.

“They feel, rightly or wrongly, attacked. Not just that there will be higher taxes, but that she is running her entire campaign as them being boogeymen,” said a political advisor familiar with the deliberations. “They don’t feel safe going to Trump, they feel disillusioned by Biden and they see this as a tactic to slow her down.They see it as a way to put pressure on the party as a whole to move away from Warren.”

This person did admit, however, that the financiers are playing right into Warren’s messaging against wealthy donors influencing politics by stonewalling Schumer on donations.

The donors’ signals to Schumer come as they are increasingly frustrated with former Joe Biden’s campaign, which has lagged behind Warren, Sen. Bernie Sanders and South Bend, Indiana, Mayor Pete Buttigieg. They had hoped he would be the clear front-runner, particularly because of his experience as President Barack Obama’s vice president. His once-double-digit lead in Real Clear Politics’ national polling average has him up an average of nearly nine points over Warren, who had briefly overtaken Biden last month. An NBC News-Wall Street Journal poll released Sunday has Biden up four points over the Massachusetts senator.

These executives also privately say that they still hope Biden will become the Democratic nominee as they argue he is the only candidate who can beat Trump in key battleground states. A New York Times Upshot poll released Monday shows Biden tied or ahead of the president with registered voters in swing states including Michigan, Pennsylvania, Wisconsin and Florida. Warren, on the other hand, is behind or even with Trump in most of those states.

Bernard Schwartz, a longtime Democratic donor and the CEO of BLS Investments, acknowledged that he knows of peole on Wall Street who have declared to Schumer and party leadership that they won’t invest spend in favor of Democratic Senate candidates if Warren is the nominee.

“I think at the end of the day it’s going to be very hard for Elizabeth Warren to be the leader of the party,” he said, while adding he likes her personally yet is not in favor of some of her policies. “I think the party is much more centrist then the people who have the microphone.”

Schwartz, who said he doesn’t think Warren could beat Trump, is currently backing Biden for president and said he wants to contribute to the new pro-Biden super PAC Unite the Country. He also said he doesn’t believe that there are many Democrats in the financial industry who would refuse to help Senate Democrats if Warren is the nominee.

A spokesman for Schumer declined to comment. Representatives for Warren did not return a request for comment.

Schumer has represented New York on Capitol Hill since 1981, after he was elected to the House. In 1998, he was elected senator. During his tenure in the federal government Schumer has received over $13 million in donations from the securities and investment industry, including from employees and the political action committees at Goldman Sachs, Citigroup, J.P. Morgan, and Morgan Stanley, according to the nonpartisan Center for Responsive Politics.

The race for the Senate

Political analysts at the nonpartisan Cook Political Report mark Senate races in Arizona, Colorado and Maine as toss-ups where Republican seats are at risk. They rank Alabama as the lone seat that’s a toss-up for Democrats. Republicans are defending 23 seats in the Senate, while a dozen Democrats are up for reelection.

While this is growing group of financiers who say they won’t take part in the Senate race, there’s no indication they will support GOP candidates instead. As Vox reports, Warren does have allies on Wall Street who are helping finance her campaign.

Warren has publicized a wide range of plans targeting the wealthy and corporations she wants to implement if she makes it to the White House. Her latest idea is to double her billionaires wealth tax from 3% to 6% to help pay for her $52 trillion “Medicare for All” plan. Warren’s wealth tax proposal would also impose a 2% tax on net worth between $50 million and $1 billion.

Wall Street has responded to her ideas with vitriol and threats. Some Democratic finance leaders have privately warned the party that they could end up sitting out the presidential election entirely or back Trump instead.

Leon Cooperman, a billionaire investor, has virtually gone to war with Warren and wrote in an open letter that he’s being treated by her “as if a parent chiding an ungrateful child.” Cooperman was responding to a tweet in which Warren called on him to “pitch in a bit more.”

Still, Warren’s ascendance hasn’t weighed on Democratic Senate candidates just yet, as they have been edging out their Republican rivals in the fundraising game.

The Democratic Senatorial Campaign Committee outraised their direct rivals of the National Republican Senatorial Committee in September. The DSCC brought in $6.7 million while the NRSC raised $5 million, Federal Election Commission records show.

In three of the potential pickup states of Arizona, Colorado and Maine, Democrats either outperformed or kept pace with their Republican rivals.

Navy veteran and retired NASA astronaut Mark Kelly eclipsed Republican Sen. Martha McSally in his third quarter fundraising haul, bringing in just over $5.5 million. Former Colorado Gov. John Hickenlooper, who dropped out of the presidential race earlier this year, just missed overtaking GOP Sen. Cory Gardner as he brought in $2.1 million.

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