Obama Seeks to Win Back Wall St. Cash (2 articles)

Monday, June 13, 2011 by The New York Times

by Nicholas Confessore 

WASHINGTON — A few weeks before announcing his re-election campaign, President Obama convened two dozen Wall Street executives, many of them longtime donors, in the White House’s Blue Room.
 
 The guests were asked for their thoughts on how to speed the economic recovery, then the president opened the floor for over an hour on hot issues like hedge fund regulation and the deficit.

Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend.

The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.

Last month, Mr. Obama’s campaign manager, Jim Messina, traveled to New York for back-to-back meetings with Wall Street donors, ending at the home of Marc Lasry, a prominent hedge fund manager, to court donors close to Mr. Obama’s onetime rival, Hillary Rodham Clinton. And Mr. Obama will return to New York this month to dine with bankers, hedge fund executives and private equity investors at the Upper East Side restaurant Daniel.

“The first goal was to get recognition that the administration has led the economy from an unimaginably difficult place to where we are today,” said Blair W. Effron, an investment banker closely involved in Mr. Obama’s fund-raising efforts. “Now the second goal is to turn that into support.”

The president’s top financial industry supporters say they are confident that the support Mr. Obama needs will ultimately be there, despite the financial industry’s unhappiness over his efforts to tighten regulation of their businesses. But it is clear that those supporters will have to work much harder to win over the financial services industry than they did in 2008, before Wall Street’s bust, the subsequent clashes over policy and the sometimes bitter personal differences that lingered afterward.

Executives at large investment banks, a group that gave generously to Mr. Obama in his last campaign, are remaining on the sidelines for now. Only a small handful of such donors have appeared in Mr. Obama’s joint campaign filings with the Democratic National Committee, though officials there said more would appear in the coming weeks.

Some traditional heavy hitters in Democratic Wall Street fund-raising have stepped out of the game. They include Maureen White and her husband, Steven L. Rattner, a founder of the Quadrangle Group, whose Fifth Avenue living room was a critical conduit between Wall Street and Democratic candidates in the years before Mr. Rattner joined the Obama administration to help restructure the auto industry. The couple did not resume their old role after Mr. Rattner left government, and he was caught up last year in an investigation into kickbacks to New York’s state pension fund.

And even as some criticize the president for listening too closely, they say, to Wall Street on issues like the 2008 bailout and financial regulation, he has suffered some unusually public defections and criticism by some former Wall Street supporters, who view his policies and rhetoric as unfair to their industry. Many are Republicans whose support last time around burnished his image as a post-partisan problem solver.

And as Mr. Obama seeks to rebuild, Mitt Romney, a former Massachusetts governor who is seeking the Republican presidential nomination, is using his background as a venture capital executive and his policy proposals to woo financial-industry donors.

Last week, Mr. Romney held three fund-raisers in Greenwich, Conn., and New York, including a reception hosted by Anthony Scaramucci, a hedge fund manager who donated to Mr. Obama in 2008. Mr. Scaramucci said he wanted a president who embodied pragmatism and middle-of-the-road solutions. In 2008, that candidate was Mr. Obama, he said; today, it is Mr. Romney.

“He seemed like he was going to be a transformative candidate,” Mr. Scaramucci said of Mr. Obama in an interview. “I’m really not an ideological guy, and I think the country right now needs more practical, less partisan people.”

To offset those defections, Mr. Obama’s campaign has deployed a corps of loyal Wall Street supporters who have fanned out to defend the president’s record and stoke fatigued donors. They include Robert Wolf, the chief executive of UBS Group Americas; the hedge fund managers Orin S. Kramer and Eric Mindich; and Mark T. Gallogly, a co-founder of Centerbridge Partners.

Mr. Mindich and Mr. Wolf were among those at the White House meeting, along with some prominent names from the hedge fund world: James G. Dinan of York Capital Management, Glenn Dubin of Highbridge Capital Management and Paul Tudor Jones.

Members of the president’s economic team and his chief of staff, William M. Daley, a former banking executive, have been more active in reaching out to Wall Street executives about policy issues, donors said, along with Mr. Messina and Patrick Gaspard, the D.N.C.’s executive director.

The campaign and its allies are also seeking to recruit a new group of high-level bundlers, supporters who recruit other donors. They include Antonio Weiss, the global head of investment banking at Lazard; Charles Myers, a senior managing director at Evercore Partners; and James E. Staley, the head of JPMorgan Chase’s investment bank.

The campaign is also courting prominent Wall Street figures who could serve as Mr. Obama’s ambassadors at firms known for leaning Republican: Lenard B. Tessler, a managing director at Cerberus Capital who donated to Mr. Romney and Mrs. Clinton in 2008, and Hamilton E. James, the president of the private equity behemoth Blackstone.

“Fund-raising is certainly different than last time around in ’07,” Mr. Wolf said. “Not everybody on Wall Street agrees with the financial regulatory legislation. But as someone who witnessed firsthand the Lehman weekend at the New York Fed, there are certainly many of us in the financial services community, myself included, that fully support smart reforms.”

Still, there is skepticism. One Democratic financier invited to this month’s dinner, who asked for anonymity because he did not want to anger the White House, said it was ironic that the same president who once criticized bankers as “fat cats” would now invite them to dine at Daniel, where the six-course tasting menu runs to $195 a person.

The donor declined the invitation.

+++++++++++++++

Obama Hits Up Wall Street 'Fat Cats' For Reelection Funds, But What About Jobs?

As Barack Obama gears up for his reelection fight, Wall Street donors are leery of handing over the cash--and former advisers warn about jobs. 

 

It's not a surprise, really, that Barack Obama is courting Wall Street donors (again) for his reelection campaign.

Still, the bold black-and-white New York Times headline is a bit jarring. “Obama Seeks to Win Back Wall Street Cash.”

We knew it was coming, but still.

It's not just that there have been no prosecutions of anyone responsible for the financial crisis. It's not just the extension of the Bush tax cuts, overwhelmingly benefiting the rich. It's not just the lack of any meaningful jobs program, or the appointment of banker buddy William Daley as White House Chief of Staff.

This latest report stings because while unemployment hovers just above 9%, the administration is more concerned with giving the appearance, to the people who created the crisis, that it's on their side.

A couple of weeks before officially kicking off his reelection campaign, President Obama met with two dozen Wall Street executives at the White House, and asked them for their thoughts on how to bring the economy back to life. Apparently the topics included hedge fund regulation and the deficit. No word if putting people back to work, or paying them a living wage, was on the itinerary.

The Times wrote:

“The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.”

Yes, the Times chose the word “class” to describe the investors. Let's leave aside the fact, for now, that yes, progressive policies like a jobs program would actually have helped heal the economy, not to mention shrink the deficit, by getting more money back in the pockets of the unemployed and thus back in circulation and back into the government's tax coffers. That's not what the Wall Streeters are really angry about, is it?

They're doing just fine, after all, back to record profits after bailouts from the Troubled Asset Relief Program (TARP) and the Federal Reserve and lowered interest rates.

A “financier” given anonymity by the Times instead complained that the White House had criticized bankers as “Fat Cats.” And Larry Summers, according to the Wall Street Journal, got into a spat with a donor who complained that he'd had trouble getting a loan. Summers returned that none of the attendees at this event, who had been asked to raise $350,000, were experiencing the same kinds of problems as the average American.

It's nice to know he remembers.

But Wall Street's “investor class” expects deference in exchange for its cash, and while the Obama administration has been anything but tough on banks, it appears that for many former donors, a quite corporate-friendly Democratic party hasn't been corporate-friendly enough.

There are a few dissenters even among the banker ranks. In the Wall Street Journal, a couple of high-dollar donors actually expressed frustration with Obama's policies from the left, noting specifically his caving in on the Bush tax cuts. Art Lipson, a hedge fund manager, told the Journal that he wouldn't be giving a dime to Obama in 2012 because Obama hasn't been tough enough on banks after the financial crisis.

While the “investor class” isn't a completely unified front, the Times' choice of words is revealing. The paper of record, the bankers themselves, and obviously the Obama administration see them as a class with unified interests, and consider those interests—or the money to be made by catering to those interests—as more important than those of the unemployed or working poor, still struggling to get by.

When Larry Summers, hardly a raving leftist, is publishing Op-Eds calling for more stimulus, more job creation, after leaving the administration, what are progressives to think? Summers isn't the first, of course. Jared Bernstein called for direct job creation, and Christina Romer said recently “I frankly do not understand why policymakers are not feeling more urgency to get unemployment down.”

Unemployment numbers are often the best predictor of an incumbent president's reelection, many have noted. Despite a lackluster Republican field and brinksmanship over the debt ceiling that has some on Wall Street scared, sustained joblessness isn't likely to make the majority of the country get out and vote for more of the same. And the jobless rate is at its highest among young people and recent graduates, the very people who put Obama over the top in 2008, the ones whose energy was dedicated not to raising money but to getting out the vote.

The 2012 presidential race will no doubt be the most expensive in history, bolstered by the unlimited corporate cash allowed by the Citizens United decision. It's understandable, of course, that the Democrats don't want to go into that race with their pockets empty. But as the Obama reelection campaign starts calling its small donors and volunteers, asking them to sign back up, to kick in $20 or $30 at a time, what response will they get when those same people can see the administration's interest in courting the “investor class,” rather than the working class?