In a flurry of mailers sent to New York’s Upper East Side Democratic voters, challenger Reshma Saujani claims that incumbent Rep. Carolyn Maloney has taken $2.5 million from "special interests" while she has accepted none. Um, really? What about the $220,000 Saujani has received from Wall Street, her leading source of campaign funds?
Yes, Maloney has accepted more than $2.5 million from political action committees over the course of her career ($588,561 in this election cycle), but Saujani doesn’t mention that the $2.5 million was spread over Maloney’s nearly 18 years of service in the House. Saujani’s mailers paint Maloney as "taking Wall Street cash while writing its rules." Perhaps so, but Maloney championed legislation that curbed some of the anti-consumer practices of credit card companies, prompting President Obama to give her a peck on the cheek when he signed the bill into law last year. That didn’t please some players in New York’s financial community, who were further rankled by her support of the regulatory bill in June.
It’s also true that Saujani accepts no money from political action committees. One mailer boasts, "Only Reshma Is Rejecting Special Interest Cash." But PAC money isn’t the only form of "special interest cash," and the fact is that Saujani is relying heavily on donations from individuals who work in the financial industry. According to a tabulation by the Center for Responsive Politics, she’s taken in $220,255 from people in "securities and investment" and their families, while Maloney has received only $125,790 from the same sector (even counting her PAC receipts). Those figures come from the most recent reports available, as of June 13.
On one of Saujani’s mailers, we’re told that "Carolyn Maloney takes money from the special interests she is supposed to regulate." It’s true that Maloney held a fundraiser at a Carole King-James Taylor concert in Washington D.C., and that she was a conferee on the regulatory bill around the same time. And it may well be that some of the donors who attended the concert were banking lobbyists — but Saujani has no evidence of that. Fundraising reports covering that period haven’t yet been released. Furthermore, Maloney voted for the financial regulatory overhaul, which would curb some practices of banks and other financial institutions and create greater consumer protections.
Saujani also goes too far by including an image of a June 16 Washington Post clip headlined "8 House members investigated over fundraisers held near financial reform vote." In fact, Maloney was not among those investigated by the Office of Congressional Ethics; she’s not mentioned anywhere in the story.
Saujani’s mailers criticize Maloney for having taken the side of big banks in fighting against a 2000 effort to crack down on subprime lending. That’s true. Crain’s New York Business reported on March 13, 2000 that "[t]he banks have won a supporter" in Maloney. "She recently testified that the FDIC rules are likely to crimp credit availability in poor communities," Crain’s reported. "She also pegged the proposal as far too broad and suggested the FDIC should address its concerns on a case-by-case basis."
But Saujani used to work for a hedge fund that was involved in the subprime market. In fact, she’s a lawyer who has worked at three hedge funds during her career.
Saujani’s filing with the Federal Election Commission for the first quarter of 2010 shows contributions from employees at dozens of investment banks and other financial firms. Twenty-three of Saujani’s donors in that quarter were identified as working for Morgan Stanley, including Chairman of the Board John Mack. Employees of Goldman Sachs have given her more than those of any other single company, followed by employees of four other financial firms.
Saujani has also expressed sympathy for the financial industry several times: "Congress needs to stop demonizing Wall Street," she wrote in February on Huffington Post. She expressed a similar sentiment to the New York Times: "Instead of browbeating Wall Street, I want to invite them to help create jobs." The Washington Post ran an article under the headline, "N.Y. challenger Saujani embraces Wall Street."
The Post article prompted a lengthy retort from Saujani on her campaign website. She called it a "media distortion" and said, "I am not pro-Wall Street or anti-Wall Street. I’m pro-New York City."
She said she would have tightened regulation of Wall Street even more than the legislation that Maloney voted for:
Saujani: Not only would I have voted for the House financial regulation bill last December and the final conference committee bill, I would have introduced an amendment to create an SEC regulated clearinghouse for credit rating agencies, because the current model of allowing banks to pay for faulty investment ratings was a major contributor to the crisis. During the conference committee, I also called to extend the Durbin amendment to reign in the excessive fees small businesses pay for both debit and credit card transactions. Lastly, I was strongly opposed to the carve-outs from consumer protections that the House granted to auto dealers, a special interest provision that was championed by Carolyn Maloney.
But Saujani didn’t dispute the Post’s account of the words she spoke to her campaign donors at an Upper East Side fundraising party.
Washington Post: "We need to extend a hand rather than a fist" to Wall Street, Saujani tells the guests at the apartment. "In New York, it’s complicated because 35 percent of our revenue comes from the financial services industry. We need to have transparency and reform, but we also need to understand that . . . it’s just as easy to go work in Singapore and London and Bangalore, and we can’t make it so difficult to do business here that people will vote with their feet."
The Democratic primary is Sept. 14.
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