The financial sector, blamed by progressives for spawning the 2008 economic collapse, is lining up behind Pete Buttigieg’s presidential campaign.
The mayor of South Bend, Indiana, has collected more campaign cash from donors and political action committees tied to the financial, insurance and real estate sector than any other White House hopeful, according to data compiled by the Center for Responsive Politics.
The $3.06 million in contributions compares to $2.8 million directed toward former Vice President Joe Biden and $2.03 million for Sen. Cory Booker, whose home state of New Jersey has strong ties to Wall Street.
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While Buttigieg is hardly alone in turning to the finance industry for support, the data could leave him exposed to further attacks from his progressive rivals, especially Sen. Elizabeth Warren. The Massachusetts Democrat's criticism of big banks during the economic collapse helped propel her political career and she repeatedly hit Buttigieg during Thursday's presidential debate for his ties to large donors.
Buttigieg is making moves that suggest he's aware of the potential vulnerabilities. His campaign said Friday it has returned a $5,000 donation from one of Wall Street's most prominent lawyers, H. Rodgin Cohen.
Sheila Krumholz, executive director of the Center for Responsive Politics, said the donations will give Buttigieg's opponents the opportunity to argue "he's in the pocket of big business."
"We can't ignore the fact that, time and again, those who are the chief donors at the top industries are well-placed to have a sympathetic ear -- if not a champion -- in office, should their candidate win," said Krumholz, who has not backed a presidential candidate.
One top Wall Street law firm could pose particular challenges for Buttigieg with progressives. He's the top recipient of cash this cycle from Sullivan & Cromwell, which has worked on some of the biggest corporate mergers in recent history, including Amazon's acquisition of Whole Foods, AT&T’s purchase of Time Warner and Bayer’s merger with Monsanto. The firm also represented some of the largest financial institutions that received federal bailout money.
Sullivan & Cromwell “essentially designed the bailouts on behalf of all the too-big-to-fail banks," said Kevin Connor, executive director of the Public Accountability Initiative, an organization that tracks corporate and big-money involvement in politics.
Buttigieg's team argues his campaign has broad support, noting his average donation was $32 for the third quarter if 2019 and that 98% of the donations are under $200. Buttigieg spokesman Sean Savett said the candidate is “proud to be running a campaign that’s powered by more than 700,000 grassroots donors from across the country.”
“The only promise any donor will ever get from Pete is that he'll use that money to defeat Donald Trump,” Savett said in a statement.
Representatives for Sullivan and Cromwell did not respond to multiple requests for comment. Cohen, one of the firm's prominent attorneys, also didn't respond to a request for comment.
Employees of the law firm have contributed more than $83,000 to Buttigieg's presidential campaign, according to the Center for Responsive Politics. At least 20 Sullivan & Cromwell partners have given to his campaign. Cohen and David Hariton are bundlers for Buttigieg, those who have raised at least $25,000 for his campaign.
Cohen's role in the financial crisis could make his ties to Buttigieg problematic with progressives. Cohen helped orchestrate more than a dozen deals with financial institutions during the bailout. In addition to the $5,000 contributed to Buttigieg, Cohen gave $4,900 to Booker and $2,500 to Biden.
In announcing that Cohen's donation was being returned, Buttigieg's campaign said he was "no longer actively involved with the campaign."
Representatives for Biden and Booker didn't immediately comment on whether they would also return Cohen's contributions.
Though employees of the law firm have contributed to nearly every major presidential candidate remaining in the race -- including Biden, Booker, Warren and a small amount to Bernie Sanders -- Buttigieg received more than any of his opponents.
At least two other max-out donors from the firm have had roles in some of the most controversial recent financial scandals and mergers.
David Braff's Sullivan & Cromwell bio says he represented Barclays in criminal matters related to the LIBOR interest rate-rigging scandal that ultimately resulted in the bank paying a then record-setting fine of $450 million. He also represented Sallie Mae in a lawsuit brought by the Illinois attorney general alleging the company engaged in predatory lending practices against student borrowers, and served as counsel to companies in connection with "sanctions-related criminal and civil investigations."
And Krishna Veeraraghavan, another partner at the firm, advised a number of major pharmaceutical and energy companies in major acquisitions, as well as Amazon in its acquisition of Whole Foods. Both gave the maximum $5,600 contribution to Buttigieg.
The firm's work on mergers in particular could raise concerns among voters in Iowa, where Buttigieg has staked much of his candidacy on a strong showing in the nation's first caucuses. Sullivan & Cromwell worked on one of the biggest agricultural company mergers in history in 2018 when drug and chemical company Bayer combined with agricultural giant Monsanto.
Steven Holley, a law firm partner who led the antitrust portion of the negotiations, gave the maximum $5,600 to Buttigieg's campaign, while Ron Creamer and S. Neal McKnight, who were also on the law firm's team assigned to the merger, gave $2,800 to Buttigieg in June.
Prior to the merger, the Department of Justice argued in a complaint against it that “the proposed acquisition would result in higher prices, less innovation, fewer choices, and lower-quality products for farmers and consumers.” Bayer eventually sold $9 billion in assets to satisfy the government's concerns, and the merger went through.
Austin Frerick, a native Iowan and former Treasury economist who now heads up an antitrust enforcement research program at Yale University, said “seed cost increases are a direct impact of ag mergers like these,”
Frerick helped Buttigieg develop his agriculture plan in which Buttigieg pledges, among other antitrust planks, to double funding for antitrust enforcement and "launch investigations of the seed market’s recent mergers for anticompetitive behavior."
Frerick said he was initially “really inspired” by Buttigieg running for president as a young, gay candidate with a message of change. But after seeing the donations from Sullivan & Cromwell lawyers, he decided to support Warren instead.
“Antitrust is about power, and are you willing to trust power,” Frerick said. “This type of donation from a law firm makes me question his ability to challenge power."
Indeed, David Weaver, a corn and soybean farmer from Rippey, Iowa, said he worries about the impact the merger could have on his business, because he won't be able to shop around for different seeds and pesticides.
"As these mergers happen, you're really not having much of a choice because you have to buy everything from one company," he said.
Weaver's considering caucusing for either Warren or Minnesota Sen. Amy Klobuchar, and said Buttigieg's Sullivan and Cromwell donations “raise questions about his commitment to antitrust enforcement.”
"Money dictates a lot of things, and where your money comes from dictates a lot of things," he said.