WASHINGTON (AP) — Hillary Rodham Clinton is pushing an agenda that takes on Wall Street, going after financial investors for focusing too heavily on their own immediate profits. But she's also taking their money, targeting some of those same executives to fund her presidential campaign.
A day after proposing higher capital gains taxes on short-term investors, Clinton raised at least $450,000 Tuesday night at the Chicago home of Raj Fernando, a longtime donor. His firm, Chopper Trading, specializes in high-frequency transactions and was recently purchased by Chicago-based competitor DRW.
Clinton's summertime fundraising circuit highlights a central tension of her campaign: how to encourage financial executives to open their wallets for her presidential effort even as she comes out with plans aimed at reining multimillion-dollar paychecks. Since her first presidential campaign in 2008, income inequality has become a bigger force in Democratic politics, with liberal voters clamoring for candidates who will take a sharply populist turn and enforce tough new regulations on Wall Street.
The early outlines of Clinton's economic plans have included steps to raise taxes on hedge fund and private equity bonuses, penalize short-term investors with higher tax rates and strengthen penalties for rogue executives who are involved in fraudulent deals on Wall Street. She wants further strengthening of financial regulations put in place after the 2008 financial crisis.
In announcing her economic platform in New York, Clinton called some of the financial institutions led by her top contributors "too complex and too risky." She said "serious risks are emerging from institutions in the so-called shadow banking system, including hedge funds, high-frequency traders, non-bank finance companies."
In New Hampshire in April, she singled out hedge fund managers who pay lower tax rates. "If it's just, you know, playing back in forth in the global marketplace to get one-10th of 1 percent advantage, maybe we should not let that go on because that is unfortunately kind of at the root of some of the economic problems that we all remember painfully from '08."
Clinton has avoided the kind of rhetoric that Obama used to describe the industry — "fat cat bankers on Wall Street," the president said in 2009 — after he raised millions from the industry in his first presidential campaign. Obama had pushed for the 2010 regulations.
Alan Patricof, a private equity pioneer and longtime Clinton donor, said Obama was polarizing on the issue but Clinton "is being very realistic" and he's not aware of donors from the industry holding back from her.
Nor is she shy about turning to them for campaign money, sometimes in events at executives' homes. As she's put it about her aggressive fundraising operation, Republicans and their allies will spend billions of dollars to defeat Democrats and "we're going to have to be in a position where we can defend ourselves."
In her first campaign finance report, people who listed occupations in banking, finance, investment, money management, private equity or venture capital contributed more than $1.6 million to Clinton's campaign, according to a review by The Associated Press. The vast majority of those checks were for the maximum legal amount of $2,700.
Following the event in Chicago with Fernando, Clinton was attending a Wednesday fundraiser hosted by George Reddin, a North Carolina-based managing director of FMI Capital Advisors who has specialized in mergers and acquisitions in the construction materials industry.
About a dozen of Clinton's top campaign bundlers — donors who have raised at least $100,000 for her presidential bid — work in finance and investing, such as private equity investors Imaad Zuberi and Deven Parekh and hedge fund managers Marc Lasry and Orin Kramer.
Clinton also has appeared at fundraisers held by Doug Teitelbaum, founder of investment firm Homewood Capital, and Lisa Perry, whose husband, Richard, is a top hedge fund executive.
Many of those donors have also given to the Bill, Hillary and Chelsea Clinton Foundation. Fernando personally gave the family charity between $500,001 and $1 million according to the foundation's contributor list, and his company donated between $100,001 and $250,000.
Morgan Stanley vice chairman Tom Nides, who worked for Clinton at the State Department, said the new policies haven't caused any waves on Wall Street and predicted they're unlikely to hamper Clinton's fundraising.
As a senator representing New York, Clinton established strong relationships with Wall Street donors and Nides said she has maintained those ties, in part by carefully measuring the rhetoric she uses when she talks about the industry.
"She's been tough, but I don't think she's been irrational," he said. "People in our industry know they'll have someone who has a good reputation or at least someone who will listen to them."
Associated Press writer Julie Bykowicz contributed to this report.
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