Wall Street Democratic donors warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren
KEY POINTS
- In recent interviews of several big-money Democratic donors and fundraisers in the business community, CNBC has found that this opinion is becoming widely shared as Warren surges against Joe Biden.
- Warren is a critic of big banks and corporations, and has called for a wealth tax.
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Democratic donors on Wall Street and in big business are preparing to sit out the presidential campaign fundraising cycle — or even back President Donald Trump — if Sen. Elizabeth Warren wins the party’s nomination.
In recent weeks, CNBC spoke to several high-dollar Democratic donors and fundraisers in the business community and found that this opinion was becoming widely shared as Warren, an outspoken critic of big banks and corporations, gains momentum against Joe Biden in the 2020 race.
“You’re in a box because you’re a Democrat and you’re thinking, ‘I want to help the party, but she’s going to hurt me, so I’m going to help President Trump,’” said a senior private equity executive, who spoke on condition of anonymity in fear of retribution by party leaders. The executive said this Wednesday, a day after Speaker Nancy Pelosi announced that the House would begin a formal impeachment inquiry into Trump.
A spokeswoman for Warren declined to comment. She tweeted her response to CNBC’s report later Thursday.
I'm fighting for an economy and a government that works for all of us, not just the wealthy and well-connected. I'm not afraid of anonymous quotes, and wealthy donors don't get to buy this process. I won't back down from fighting for the big, structural change we need. twitter.com/CNBC/status/11…
During the campaign, Warren has put out multiple plans intended to curb the influence of Wall Street, including a wealth tax. In July, she released a proposal that would make private equity firms responsible for debts and pension obligations of companies they buy. Trump, meanwhile, has given wealthy business leaders a helping hand with a major corporate tax cut and by eliminating regulations.
Warren has sworn off taking part in big money fundraisers for the 2020 presidential primary. She has also promised to not take donations from special interest groups. She finished raising at least $19 million in the second quarter mainly through small-dollar donors. The third quarter ends Monday.
Trump, has been raising hundreds of millions of dollars, putting any eventual 2020 rival in a bind as about 20 Democrats vie for their party’s nomination.
Trump’s campaign and the Republican National Committee have raised over $100 million in the second quarter. A large portion of that haul came from wealthy donors who gave to their joint fundraising committee, Trump Victory. In August, the RNC raised just over $23 million and has $53 million on hand.
The Democratic National Committee have struggled to keep up. The DNC finished August bringing in $7.9 million and has $7.2 million in debt.
Biden, who has courted and garnered the support of various wealthy donors, has started to lag in some polls. The latest Quinnipiac poll has Warren virtually tied with the former vice president. Biden was one of three contenders that saw an influx of contributions from those on Wall Street in the second quarter.
The business community’s unease about Warren’s candidacy has surged in tandem with her campaign’s momentum. CNBC’s Jim Cramer said earlier this month that he’s heard from Wall Street executives that they believe Warren has “got to be stopped.” Warren later tweeted her response to Cramer’s report: “I’m Elizabeth Warren and I approve this message.”
Some big bank executives and hedge fund managers have been stunned by Warren’s ascent, and they are primed to resist her.
“They will not support her. It would be like shutting down their industry,” an executive at one of the nation’s largest banks told CNBC, also speaking on condition of anonymity. This person said Warren’s policies could be worse for Wall Street than those of President Barack Obama, who signed the Dodd-Frank bank regulation bill in the wake of the 2008 financial meltdown.
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Yet before Obama was elected, his campaign took over $1 million from employees at Goldman Sachs, according to the nonpartisan Center for Responsive Politics.
A hedge fund executive pointed to Trump’s tax cut as a reason why his colleagues would not contribute or vote for Warren if she wins the nomination.
“I think if she can show that the tax code of 2017 was basically nonsense and only helped corporations, Wall Street would not like the public thinking about that,” this executive said, also insisting on anonymity.
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