How Wall Street Donors Could Derail Hillary Clinton’s 2016 Campaign
As Hillary Clinton embraces a new populist message, her family's foundation—and it's deep-pocketed corporate donors—threaten to undermine her shift to the left.
Photo by Steve Jurvetson via Flickr
On the first official week of her 2016 presidential campaign, Hillary Clinton set out on an Iowa "listening tour" that was basically the political equivalent of a Food Network show, with Clinton spreading her new populist message to heartland voters in their various diners, drive-ins, and dives. Haunted by the specter of Elizabeth Warren, Clinton came out swinging against corporate America, criticizing the low taxes paid by hedge-fund managers, and making comparisons to the truckers she saw on I-80. This was a Hillary for the 99 Percent.
"It's fair to say the deck is still stacked in favor of those already at the top," she said at her first official event. "There's something wrong with that. There's something wrong when CEOs make 300 times more than the typical worker."
It's a new message for Clinton, one that puts her more in line with the growing progressive wing of the Democratic Party. But some on the left have raised concerns about how genuine Clinton's new push into heartland populism really is, given the former Secretary of State's strong ties to the very CEOs and financial-industry execs she's now railing against.
Already, questions have started to come up on this front regarding the Clinton Foundation—the multibillion-dollar nonprofit organization headed by Bill, Hillary, and Chelsea whose donor roster basically doubles as an address book of downtown Manhattan.
Until this past week, when Hillary resigned from the foundation to announce her candidacy, the list of donors was released to the public on an annual basis, giving only a range for contributions. Now that her campaign is underway, the list will now be released quarterly, although exact amounts of money given are still not available. A review of the list shows that in 2014, the Goldman Sachs Group donated $1 million to $5 million to the foundation; Barclays, the Bank of America Foundation, and Citigroup each coughed up $500,000 to $1 million that year.
A CNN report published last month found that six banks under government investigation or in litigation were listed as public sponsors of the Clinton Global Initiative's Annual Meeting, even after the investigations were widely publicized. The most notable of these was the Swiss banking giant HSBC, whose $81 million donation came at the same time that the bank was being investigated for money laundering. A former Goldman Sachs executive, Robert S. Harrison, is the CEO of the initiative, and the annual dinner for the Clinton Foundation, held in early March just a few avenues from the heart of the banking world, was characterized as a "Wall Street gala."
"It's clear that Hillary Clinton brings some potential conflicts of interest to the table with her candidacy, including all the donors to the foundation," said Viveca Novak, the editorial and communications director for the Center for Responsive Politics, a watchdog and pro-transparency organization. "Those donations are arguably a little different from contributions that are given directly to help someone get elected.
"Still, even though the foundation is a charitable institution," Novak added, "it's not unlikely that Clinton would think favorably of a big funder."
It's not the first time Clinton's ties to the financial industry have caused problems for her White House aspirations. Wall Street was one of Clinton's strongest constituencies during her first presidential bid in 2008, and she enjoyed strong ties to the industry during her years as a US Senator from New York. The ties stretch back to Bill Clinton's administration, when he signed measures that softened regulation of the nation's largest financial institutions.
That might explain why the Clintons' usual friends in finance are not taking Hillary's new populist message too seriously. In a recent Politico piece, sources close to Clintonland describe the former First Lady's new emphasis on inequality and corporate greed as "just politics," and were apparently skeptical that Clinton would actually move forward on proposals like closing carried-interest loopholes and reining in big banks.
But the political and socioeconomic landscape has changed dramatically since the Bill Clinton's presidency, and even since Hillary's last campaign. The nation is still reeling from the ramifications and realities of the financial crisis that was only just beginning when Clinton conceded the Democratic nomination to Barack Obama, and income inequality has moved to the center of the national debate, thanks to a wealth gap that has reached Gilded Age proportions. At the same time, the role of money in politics has swelled, courtesy of the Supreme Court's 2010 Citizens United decision and the subsequent advent of super Pacs.
For this reason, the progressive wing of the Democratic Party has been notably unenthused by Clinton's candidacy. Even New York City Mayor Bill de Blasio, a longtime Clinton ally and one of the more vocal liberals in public office today, has said he's withholding his endorsement until Clinton makes her positions more clear.
But Adam Green, the co-founder of the Progressive Change Campaign Committee, said Clinton's first week on the campaign trail was a strong start. He applauded the appointment of Gary Gensler, a notorious Wall Street cop and one of the leading implementers of the Dodd-Frank financial reform bill, as the chief financial officer to her campaign, and noted that her shift to the left seemed like a positive sign.
"Donations from Goldman Sachs and Wall Street in the past certainly create an extra burden of proof for Hillary Clinton if she wants to associate with a rising economic populist wave," Green said. "In her first week, she's taken big positive steps to meet that burden—from appointing a tough Wall Street regulator to a key position to calling out excessive CEO pay to applauding Elizabeth Warren's call for more Wall Street reform."
The Clinton campaign did not respond to my requests for comment on this story. But clearly, this populist embrace is something the candidate wants to get across to the American people: A message on her campaign website reads: "Everyday Americans need a champion. I want to be that champion." But even as Clinton tries to compete with Warren's appeal to the left, the foundation and its massive list of wealthy donors threaten to undermine that progress.
On the issue of climate change, for example, the Massachusetts Senator has been bashing government subsidies for oil companies, telling the audience at a green jobs conference Monday that the major polluters made "combined profits of $90 billion" last year, and simultaneously "sucked down $5 billion in subsidies from the American people."
But while addressing global climate change is one of the most prominent missions of the Clinton Foundation, the organization has taken in millions from the fossil fuel interests. In 2014, Exxon-Mobil, which, according to a review by Mother Jones, receives an estimated $600 million tax break each year, donated $1 million to $5 million to the foundation. According to the Wall Street Journal, the year before, Chevron gave $250,000 to the foundation.
The organization has also received a windfall from the petro-oil states that line the Arabian coast. Since the foundation's inception, Saudi Arabia has donated between $10 and $25 million, with the most recent contribution coming in 2014. Other unspecified donations have come from the state of Qatar, Kuwait, and the Sultanate of Oman, some of which, as reported by the Washington Post, were made while Clinton was Secretary of State.
"It boils down to this: Hillary Clinton needs to find concrete ways to demonstrate she takes seriously the biggest problem on the planet," Karthik Ganapathy, a spokesperson for 350 Action, the political arm of environmental group 350.org, told me. "That means coming out against Keystone XL, standing up to President Obama on Arctic drilling, and pledging to use executive authority to end public lands leasing for fossil fuel companies.
"If that doesn't happen, and FEC filings show her campaign, too, filled its coffers with money from big oil and king coal," Ganapathy said. "Americans wouldn't be crazy to wonder where the ambivalence on this issue comes from."
Whether or not all this actually damages Clinton's in 2016, though, remains an open question. "In order for that argument to have any value, you have to have a delivery mechanism and a receptive audience," said Democratic strategist and political consultant Hank Sheinkopf. "As in, who's going to campaign on that message, and who's going to listen?"
Republicans, Sheinkopf said, can't get on Hillary's case, because they're the party of business, and solicit donations from fat cat bankers all the time. Elizabeth Warren supporters, or more liberal primary voters, are hard to take seriously, he added, when a Democratic primary is basically non-existent.
Perhaps more significantly, it's hard to tell if Iowans really care about non-profit work done by corporations that, as a Clinton Foundation spokesperson told me, "have a long history of supporting an enormous range of philanthropic work and want to apply their expertise and resources in a way that makes a tangible difference." (The spokesperson wouldn't comment on Clinton's campaign.)
The scenario Sheinkopf describes underscores what many Democrats see as the gravest danger of a one-candidate race: that the party's shift toward real populism will be shortchanged by the inevitability of Clinton's nomination. No viable opponent will ever get to ask her, "But what about...?" and progressives will have to begrudgingly accept the reality that their best shot at keeping the presidency has deep ties to a rotunda of their worst enemies.
"But when you're facing star power," Sheinkopf asked, "what can you really do?"
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