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.