Sunday, January 31, 2010

Matt Doheny's Special Ties to Wall Street Money is a Double-Edged Sword

The Politico has an interesting top page story about New York Insurgents Standing up for Wall Street. It's an interesting read and needless to say, there are clear political advantages and disadvantages to being on the side of Wall Street in 2010. If you are on the side of big bankers and powerful Wall Street attorney's you can pretty much count on some $2,400 checks to your campaign committee. Ben Smith of the Politico goes to say that, "The warm words for Wall Street have one clear political benefit: Money." Conversely, if you are against the big banks you can use that message to fight for the middle class and win populist support.

And in the race for NY-23 there has certainly been some discussion about campaign contributions coming in from Wall Street to candidate Matthew Doheny, who announced his 600K war chest on NewzJunky.com this week. In fairness, I can't say how much of that 600K is from Wall Street because it has been written that Doheny loaned his campaign at least 650K so far. But it is true that Doheny has only listed only three reportable donors on his FEC report with an address within the boundaries of NY-23 -- all of them were from Jefferson County.

What I do know is that in the summer of 2009 Dohey raised about $190,000 from individuals for the Republican primary. However, he returned all the donations he sought in July of 2009 after Dede Scozzafava won the nod from the GOP county chairs. Now having spent $175,000, Doheny has garnered roughly 2% name recognition across the district and is going through an incredible financial burn-rate that is usually reserved for the final weeks of a campaign.

A Doheny insider who is close to the action and asked not to be named for this report wrote to me that the campaign's goal is to intimidate Assemblyman Will Barclay out of the race with big name consultants, endorsements, and heavy financial backing out of New York City. But the aide said that some within the campaign are worried that Barclay won't fold if he sees Doheny's cash on hand number dwindle before the race even starts, ruining Doheny's strategy to take Barclay out of the race by mid-to-late spring. Hence the reason for Doheny's statement last week on funding. The source stated that Doheny hopes to have his cash-on-hand number above $1 million by the end of June in time for the second FEC report of 2010. And the campaign is working under the assumption that Doheny will have to loan himself another 400-600K to get there, putting his total personal investment in the race at over $1 million. In other words, he is trying to force Barclay out by buying the race early.

The unnamed source said that Doheny's willingness to loan more money to his campaign is dependent on how much Barclay raises next quarter. The source also said that many on the campaign were excited at the prospect of bringing on Cary Brick, Congressman McHugh's former Chief of Staff, but were also nervous that his high price tag might hurt their chances of keeping the cash-on-hand high enough to scare away young Mr. Barclay. But the all-in strategy is what Doheny is banking on because he recognizes his weak support among the grassroots across NY-23, even in his own backyard. Rumor has it that a dozen plus prominent Jefferson County Republican Committee members are set to announce their endorsement for Barclay in the next few weeks.

But still Doheny's communications team is pushing their candidate's image as a young man who pulled himself up from his bootstraps to make something of himself in the big city and who returned home because of his desire to enter public service. They frequently cite that the young attorney/finance guru drives a old beat up 94 Ford Explorer named "Bessie." It's a strategy meant to distract voters from his connection to Wall Street, an image the campaign is fearful may hurt at the polls. The Doheny source mentioned a Quinnipiac University poll from 2009 that found 79% of all New York voters backed taxes against those who earn more than $1 million a year. Worried that in 2010 voter sentiment against Wall Street is even higher now as people on main street remain frustrated with the current recession and double digit unemployment numbers, Doheny's team has sought to distance their candidate from his past.

However, Doheny's Wall Street connects will likely bring him some easy campaign cash, which will help in catching up in the name ID game. A quick glance at the FEC website shows that Doheny collected over 20K from Deutsche Bank last summer. Of the 120 individuals who have given to Doheny, over a quarter were finance lawyers, half of Doheny's donors listed addresses among the richest zip codes of New York City and an overwhelming majority were involved in the financial sector and private investments. But one of the most interesting highlights is that most of the donors on Doheny's report were consistent donors for Democrat backed organizations and powerful liberal members of the Democratic Party.

For example, Raj Bhattacharyya, who gave the maximum contribution allowed by law to Doheny also gave to Senators Gillibrand, Casey, Obama, Clinton, Specter, Feingold, the Democratic Senatorial Campaign Committee, and several liberal Democratic house members from New York. Another donor, Michael Curreri gave to Representative Maffei and Senate Banking Committee Chairman, Chris Dodd. Josh Easterly of Goldman Sachs who donated to the DNC and President Obama also gave to Doheny. Doheny donor Mayar Lakhani, another Deutsche Bank employee, gave to Obama, Clinton, Menendez, Gillibrand, Specter, and Democratic Congressional Campaign Committee recruiter, Representative Steve Israel. Doheny even took money from two employees at the Blackstone Group whose CEO, Steven Schwarzman, recently lashed out at US Government officials and threatened to tie up credit and loans unless they get their way politically.

In addition, Doheny found almost 10% of his donors from the law firm, Quinn Emmanuel Urquhard LLP. That law firm happens to represent funds and fund managers before the US Security and Exchange Commission, as well as other government bodies in the US and abroad. According to their website, "Quinn Emanuel's White Collar Criminal Defense and Internal Investigations Practice Group represents prominent domestic and foreign corporations, special committees and boards of directors, as well as individuals, in high profile criminal investigations, administrative enforcement hearings, trials and appeals... attorneys in this practice group are regularly retained to represent witnesses, subjects and targets of grand jury investigations, enforcement actions and criminal proceedings in industries ranging from securities, defense, and banking, to health care, entertainment, pharmaceuticals, and technology." Some might question after getting almost $16,000 from the law firm's attorneys that should Doheny win a seat in Congress, he might use his political influence to help QEU's clients as they come before the SEC. Other notable donors listed TARP recipients, and big financial firms like Goldman Sachs, Wells Fargo and Bank of America as their employers. The list of big money makers from the New York, New Jersey and Connecticut goes on and on.

The real question for Doheny then becomes two-fold. First, is Doheny beholden to Wall Street interests and will he use his political influence, if elected, to benefit his donors and their clients? Second, why are so many of Doheny's close friends, associates and campaign donors so fond of the DNC, DSCC, DCCC, Obama, Feingold, Clinton, Gillibrand, Dodd, Specter, Israel, Richardson, Perriello, Menendez, Kerry, Casey, Arcuri, Maffei and others of the same ilk? Is it because Doheny has promised to be a strong voice for Wall Street over Main Street interests?

Can Doheny continue to file FEC reports without donors from NY-23 and remain relevant in a district that is suffering from the excesses of big bankers on Wall Street using TARP money to pay mega-bonuses to their corporate and financial heads? Will Doheny make a statement on his position on earmarks, the stimulus, TARP, bonuses on Wall Street and Obama's TARP tax proposal?

Why doesn't Doheny have a campaign website that lists his position on critical issues of importance to people across NY-23? Will Doheny continue to self-finance his race in an effort to scare Will Barclay back into his assembly seat? Will anyone in the mainstream media look at where Doheny's money is coming from and ask the tough questions?

The only answer we do know right now is that Doheny's Wall Street connections are a double-edged sword in his bid to become the Repubilcan nominee for NY-23.

38 comments:

  1. This guy needs some serious vetting. If he were the GOP nominee I think that Owens would crush him easily. For better or worse, no one likes a big Wall Street guy coming in out of no where. The Wall Street rap, the carpetbag rap, the self-finance rap, etc. is not going to help him win against Owens.

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  2. I understand the point you are trying to make, but truthfully, $16K doesn't buy you much more than a couple taxi rides in New York City. If Quinn Emmanuel Urquhard expected favors from Matt, they would be shelling out a lot more than $16K. $16K may sound like a lot to us but it is petty cash to those guys. The June numbers will be more telling.

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  3. I just did some research into Quinn Emanuel too and again, while I see the point you are trying to make, I think you mischaracterized it. The lawyers that contributed, such as Susheel Kirpalani, are from the bankruptcy group, not the white collar defense group. They are clearly people Matt worked with when he worked with bankrupt companies. The law firm has 22 different divisions - to mention just the one on your blog which is clearly unrelated to the donations to Doheny, is honestly a little deceiving.

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  4. So you are trying to throw the payback political favors book at Doheney. Can't you come up with something more original than that? Tell me what local and or state politician isn't accused of that? We will wait and see about the dozen jeff cty repub's coming out to endorse the Oswego boy.
    Anon 7;27 not only deceiving but really omission which is LYING
    So goes the validity of WhatsupNY-23!!

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  5. Its appears NY23 fears the Wall Street Lawyers will outbid the Syracuse lawyers.
    These are all interesting observations, but we all know that federal office is for those who can, through whatever means, attract big money.
    True for Bill Owens....True for Doheny, Barclay and Hoffman. And the need for early and big money explains in part why Ms. DeDe is still wearing pink in Albany.
    As for Doheny, he seems a bright guy who made $$$ in those circles but really doesn't like to socialize in those circles. The '94 Explorer named "Bessie" may be odd but it is something of a window into Doheny's soul.
    He will have to prove himself and compete in a market place of ideas. His supply side, free market economic views are a tough sell in a race where success is measured by how many unions endorse you.
    Doheny will have his hands full, but intellectually he poses an interesting challenge for the political system.
    Let's hear more about him and the others.

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  6. Well said, Jeff Graham. I also must take issue with the initial posting. Doheny is being questioned because of his ability to self-finance and fundraise among professional connections? Has Buggs Buddy forgotten how loaded the Barclay family is? Will there be similar concerns raised when Will dumps in 500K to a million of his own money? Or hits up the members of the Onondaga County Car Association for money? I hope Buggs Buddy isn't shpwing himself to be a spin doctor.

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  7. Following the money trail buggs?Good read,does it matter?Money is what makes the world break dance.. At this point in time I would rather have a guy that has those connections in place.Out of all the guy's that are trying out for the team,so far I like him....Oh ya and the unions are gunna be the destruction of America they need to be laid off.Paying dues is useless to there employee.Mercy hospital is an example of that.The guy that can solve the simple problems that are never adressed is what we need.I choose to stay on the side of the people.We can help our government by helping ourselves and helping others. America needs a diet from everything and it needs to stop the negative.Help your represenitives dont hindure them for your own amusement.

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  8. Doheny gets donations from donors who give regularly to Clinton, Obama, Dodd, Gilly, and the rest of the liberals who are destroying our country. You have to wonder if these Wall Street Bankers will give to anyone who will throw them a kickback, a bonus, or a bailout.

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  9. Buggs - Word on the street is that Doheny is using your article in a fundraising appeal letter to his friends on Wall Street. He wants to show his friends that he is sticking up for them. Does he know it is a violation of the FEC to take your words without asking first?

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  13. Bugs and Others:

    Good run down and good comments... but some are still naïve, perhaps as much as me about running and winning, if they continue to argue for good government on one hand and look the other way when tons of money pours in from all over the planet on the other hand as they complain about “insiders vs. the people.”

    e.g., you give $500 and then place a call to your Rep. or Senator at the same time a PAC or inside the beltway contributor calls and offer $10,000, or offers to sponsor a trip abroad, or to sponsor a fundraiser in Georgetown – see who gets their call through. Yes, it is that simple, and yes, the KISS concept always prevails.

    Big money does not always win, we know that; but, it keeps out small donors with just as good or maybe better ideas. Issues matter – not the money, but few grasp that concept. Issues and money are not the same.

    Mr. Dohney’s money so far to date according to the current official FEC.gov record at http://tinyurl.com/yeebvwa shows that his individual contributors – nearly $300,000 – are all from outside this district. Do a zip code search at that site and see for yourself. That may change later. He returned money; okay, fine. But, the bulk is NOT coming from this district. That should matter.

    Who supports him or any candidate now with lots of outside money speaks directly to the question of whom he would later ... keep that in mind.

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  14. After Thought:

    I stand for the tax proposal on the big banks. I am against any more help for Wall Street w/o any sustainable help for Main Street. I am strongly against that awful 5-4 USSC decision calling Corporations the same as individuals ... That will haunt us later this year in the midterms – mark my words.

    My Take on this in more detail here:

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  15. If Doheny runs he should run for state senate. I think Aubertine would be easier to defeat given the dysfunctional nature of the state senate and the big wind controversy. Aubertine has voted with his NYC political bosses over 99% of the time.

    If the Dems are in control of the state senate they will control redistricting. Under state law 5% differential is allowed in the size of Senate and Assembly districts. That is, districts can have a population either 5% higher or lower than the average district. The Assembly currently uses this law to underrepresent upstate districts. You can be sure that the Dems will do the same thing in the Senate. Ultimately, this means the Dems will be able to pass legislation with only the votes of downstate Dems. Upstate will be completely ignored. That's why all upstate citizens should be concerned about the prospect of the Dems controlling the state Senate next year.

    Of course Patty Ritchie may be a better candidate assuming she has the money to get her message out. But, I'm not optimistic that she will.

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  20. Great post Buggs. The key here is that Doheny is taking money from goons who traditionally give to Democrats like Obama, Gilly, Clinton, Kerry, & Dodd.

    Beyond his NYC base he is self-financing the thing which never works out well. Think Clinton, Romney, Perot, Corzine and MaCauliffe to name a few. Everyone concedes that no candidate will completely get all their cash from NY-23, but if you can't find at least a handful of people willing to invest in you who is going to invest their time in supporting you on the phone & door-to-door level?

    Here are some links to stories that prove self-funding can actually be counter-productive to your chances of winning.

    http://www.forbes.com/2009/06/11/terry-mcauliffe-virginia-primaries-opinions-columnists-fundraising.html

    http://www.bu.edu/washjocenter/participants_pg/spring2009/SelfFEC.htm

    http://www.npr.org/templates/story/story.php?storyId=18793382

    http://www.prospect.org/csnc/blogs/tapped_archive?month=04&year=2008&base_name=the_lieberman_loophole_and_the

    http://www.boston.com/news/local/massachusetts/articles/2009/10/03/in_politics_money_cant_always_buy_you_love/

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  21. I think it is too early to assume that he can't raise money locally. He hasn't even announced he is running yet so for now he is relying on friends and collegues for financial contributions. For whatever reason he hasn't made it official so why would anyone but a good friend contribute to campaign that may not even happen.

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  23. People still read this blob I mean blog?

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  24. It would be nice to know the identity of What'supny23 so we can see how much he has been given by others to write this stuff. Can't be traced either whatsupny23 very smooth. I like Duprey's comments about her interview. How can you take any of your stuff credible. What do you have to hide? Apparently a lot!

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  26. There goes Doheny's aides trying to win the sympathy vote!!!

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  27. Doheny's Wall St. contacts aren't a double edged sword... it's bad all the way around.

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  28. This is a great expose on Doheny's connections. Well done Buggs and I think the more we get to know Doheny the more of this we will find. You don't make the kind of money that he is throwing around without some odd occurances. Every one has skeletons, but not everyone asks for my vote.

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  29. What everyone seems to be missing is that while money makes the campaign move, people make the candidate win. While acknowledging that a campaign needs funds, the people of the 23rd are smarter than that. Look at what happened with Doug Hoffman. People made the difference...people pledging small money...many people pledging small money and feeling like their voice was heard. If Doheny posts 1 million of his own and a handful of larger donations from Wall St. execs, how many votes does that translate to? He needs money and votes and once again, the people of the 23rd are informed, energized and smarter than these candidates give them credit for being. Besides, you will not win a race characterizing all who work on Wall Street as somehow evil. Wall Street is not our issue. ...jobs...jobs...jobs...no government run health care...jobs...health care...national defense...constitutional rights.

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  30. I heard that someone is getting serious money together to start a 527 called Citizens Against Mr. Wall Street to run TV ads in reference to Matt Doheny. Has anyone else heard of this?

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  31. Wall Street is not the problem. Most of them are just average people who are guaranteed money based on performance. I know this as my family has been on Wall Street for 20 years. They make a livable wage as a base and make their living based on bonus. A Managing Director of Bear Stearns made 125,000 per year and then a bonus. If they did not perform, they did not make the wage. As far as I am concerned, that is better than unions who pay based on no performance. I know that as well as I am a union employee. Get away from Wall Street. We have larger fish to fry and more to taut as alternatives. This is where we will win a conservative agenda.

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  32. 11:17 I'm in 100% agreement with you!!!

    You are absolutely correct. It isn't really fair that those poor little souls on Wall Street don't a bonus unless they perform really well.

    They have it much tougher than all the farmers, teachers (who are in unions!!!), construction workers, prison guards (who are in unions!!!), electricians, small business owners, waiters & waitresses, and small town works who live paycheck to paycheck. Wall Street isn't the problem. It's the small town guy who is in a union or working a low wage job that is the problem. We need to rid them of our society because they are a plague. They shouldn't even be eligible to vote because the only ones who should are the ones who run the economy and own property.

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  34. Hey 12:33. Interesting that you choose to take a sympathetic comment toward hard working white collar and turn it into a sign of disrespect for blue collar. My father is a metal lather (union), husband a corrections officer (union) and myself a teacher (union). I am also a small business owner. I've been a waitress and I currently live paycheck to paycheck due to the state of this union and our state not to mention putting children through college with no assistance because I am not rich enough to pay for it without a problem and not seen as poor enough to get any help. My family has been working hard for New York for over 35 years. The fact that you cannot see Wall Street workers as living pay check to pay check or deserving of any empathy in this current climate just makes, I think, you the plague. This isn't about an us or them mentality. It's bigger than us. Let's get to the real issues and realize that life choices by all New Yorkers are being affected by poor management, corruption and top down beauracracy. I think you are the problem and your thinking is what is pitting New Yorker against New Yorker. This is about government controls and fiscal responsibility and less intervention in our lives. Together we can do this thing but your way just keeps the finger pointing going and does nothing to help return NY to its former glory. Your monsters must be huge. I agree with Juston.

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  35. If Wall Street isn't the problem then why did we spend 700 billion bailing them out? Most of the people on Wall Street just shuffle money around; has anyone here benefited from the sale of derivitaves? In the North Country, however, most people do something productive that adds value to society.

    Also some Wall Street employees get bonuses not based on performance but rather based on contract. And what about all the fired executives who get their golden parachutes? Wall Street could sink into the Hudson and we'ld all be better off.

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  36. adirondackblackbearwatcher, what value is added to society by all those unionized prison guards? please! that's the only growth industry up here...

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  37. 8:28
    They keep us safe from criminals.

    Only growth industry? What about all the political consultants/campaign workers that were hired for recent special elections and the upcoming November elections? NNY & CNY never used to have contested elections like this. I imagine local tv and radio made a bundle with the last election.

    Political campaigns: NNY's economic "stimulus".

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  38. Everyone is concerned/or not, about Doheny's Wall Street connections... well, this may sneak up to bite us all on our collective Upstate ass:

    Wall Street Race - forget the rest of the state .../s/ Ford and Gillibrand

    At least my take...

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