Wall Street Money, Racism and the Politics of Anti-Democracy
By Carter Dougherty and Madeleine Johnsson
The billionaires and millionaires of Wall Street deploy so much money to influence American politics and society that we can easily lose track of how pervasive it is. They spread money around to campaigns, think tanks, and lobbyists. Wealthy executives finance universities, cultural institutions, and hospitals. And this historical moment has laid bare for all to see that Wall Street also finances a virulently anti-democratic strain in American politics, one that always takes aim at people of color.
Wall Street’s money filled the coffers of lawmakers who sought to overturn the results of a fairly won election even after a violent mob stormed the U.S. Capitol, brandishing symbols synonymous with treason and white supremacy. Leading figures and institutions of this very powerful industry enabled lawmakers aligned with these anti-democratic forces by donating millions to the men and women who disputed the lawful election of Joe Biden to the presidency.
The penchant for authoritarian, racist governance that President Donald Trump embodies, and the Republican lawmakers who support him, didn’t trouble Wall Street enough to turn off the money spigot over the past four years. The Muslim ban didn’t do it, nor did Trump’s friendly nod to “very fine” neo-Nazis. Nor did a slew of racist policies. Now, the horrific events of Jan. 6 have underscored the reality of years of political spending by Wall Street. The titans of this industry have been willing to throw democracy under the bus – and enable racist policies and politics – if they see an opportunity to fatten their wallets.
Shamefully, Lloyd Blankfein, the former CEO of Goldman Sachs, waited until the events of Jan. 6 – after nearly 4 years of Trump – to speak publicly and clearly about his fellow financiers. “This is what was happening: For Wall Street, it was lower taxes, less regulation,” Blankfein told The New York Times. “He was delivering what ‘we’ wanted. We put a clothespin on our nose. We weren’t ignorant of the kind of risks we were taking. We repressed them.”
No fewer than 139 House members – two-thirds of the Republican conference – voted to prevent full certification of Biden’s victory in the 2020 presidential election. Eight senators joined them. This roll call of shame for those 147 members followed not only a violent insurrection but months of baseless allegations that the election was stolen, and equally baseless charges that African-Americans in cities like Philadelphia, Atlanta, and Detroit were responsible. In short, these members endorsed a racist lie by a racist, lying president about whether he lost a fair election.
And those lawmakers had the megaphone afforded them by a seat in Congress and ample funding. Overall, what the Center for Responsive Politics calls the FIRE– finance, insurance, and real estate – gave $45.8 million to the 145 Republican lawmakers in the last election cycle, more than any other industry sector. Many of these lawmakers, especially Rep. Kevin McCarthy, the House Republican leader, have received substantial funding from the financial services industry. And within the industry itself, billionaire Stephen Schwarzman, co-founder of private equity giant Blackstone, stands out as a marquee financier of authoritarian and anti-democratic figures in American politics.
McCarthy, the senior Republican who set the example for his party in the House of Representatives, is a longtime favorite of Wall Street, which has put money into his coffers through various vehicles. The industry’s PACs, such as those run by BlackRock, Goldman Sachs, JP Morgan Chase, and the American Bankers Association, gave McCarthy $673,000 in the current election cycle alone. Employees of finance-related companies threw in $2.8 million.
Republican Leader McCarthy
Wall Street poured cash into the Congressional Leadership Fund, a McCarthy-influenced super PAC. The dark-money group American Action Network, linked to a mouthpiece of financial interests, gave $29.4 million. Major industry players chipped in too: hedge funds Citadel and Elliot Management ($10 million), investment bank Stephens ($2.8 million), and Blackstone ($2.5 million). The fund spent heavily to elect three people to the House (Reps. Troy Nehls of Texas, Nicole Malliotakis of California, Mike Garcia of California) who then objected to certifying Biden’s victory.
Apart from McCarthy, other House Republicans who sought to undermine the democratic process enjoyed Wall Street’s favor: Rep. Steve Scalise, the Republican whip ($2.4 million), Rep. Lee Zeldin ($1.4 million), Rep. Devin Nunes ($1.3 million), Rep. Blain Luetkemeyer ($1.2 million) and Rep. Elise Stefanik ($1.2 million).
American Bankers Association
The American Bankers Association, arguably the best-known of the industry’s many lobby groups, was the top corporate PAC donor to the Republican lawmakers who objected, according to the Center for Responsive politics. (It has announced no changes to how it gives money, only that it will take the “troubling events of last week” into consideration in the future.) This past election, ABA ran ads supporting Rep. Ted Budd, a North Carolina Republican who objected to certifying Biden’s victory.
The eight senators who disputed Biden’s win largely come from states that lean Republican enough to obviate the need for heavy spending on campaigns. Still, Wall Street executives donated in amounts that anyone other than a Wall Street executive would deem large. Sen. Roger Marshall of Kansas and Sen. Tommy Tuberville of Alabama each got about $1 million from the financial sector, while Sen. Ted Cruz of Texas received about half that amount.
Schwarzman and Blackstone
The figure of Schwarzman, the multi-billionaire founder of Blackstone, will loom large in histories of the people who financed Trump and his supporters, not the least because the 73-year-old financier did not abjure the spotlight. He styled himself an adviser to Trump, spent over $22 million on the 2020 general election, and aligned himself with Trump’s baseless claims of election fraud. He then kicked in $15 million more after the November elections in a bid to help Republicans hold the Senate majority by electing Kelly Loeffler and David Perdue, who both planned to endorse Trump’s bid to overturn the presidential election before they lost their runoffs.
Since Jan. 6, the backpedaling – including by Schwarzman – has been in full swing, but Wall Street is still hedging its bets, eager to avoid offending Republicans too much, lest they regain the power to do the industry favors again. Goldman Sachs, JPMorgan Chase, and Citigroup have suspended all political contributions to federal elected officials of both parties. The end of Wall Street money in politics would truly be welcome, but for the moment, this decision groups every lawmaker who defended the peaceful transfer of power in with the 147 who sought to overturn the election. “This is only going to incentivize more seditious behavior,” said Rep. Jan Schakowsky, an Illinois Democrat.
Schwarzman, the members of the American Bankers Association, and other financiers and financial institutions have already profited to the tune of billions of dollars from the favors that the Trump administration and its allies in Congress did for them over the past four years. Wall Street willfully ignored a long list of sins against the rule of law and basic human decency along the way – and on Jan. 6 found themselves financing the subversion of American democracy in a stark, violent, and dangerous moment.
Photo by Blink O’fanaye/Flickr (CC BY-NC 2.0)