ADVERTISEMENT

Hillary Clinton's Wall Street 'Reform' Targets Rival of Democratic Donor Whose Firm Made a Killing on the Bank Bailout

Hillary Rodham Clinton
Hillary Clinton / AP
July 27, 2015

Hillary Clinton has a problem. She is seeking the presidential nomination of a party that, at least superficially, doesn't think very highly of Wall Street. Her Democratic rival Bernie Sanders, for example, is a principled liberal who voted against the controversial TARP bailout in 2008 (which Hillary supported), and supports legislation to break up big banks. Hillary, however, believes Wall Street is actually pretty good, especially when it comes to funding her political campaigns, paying her lots of money to give speeches, and donating to the Clinton Foundation.

If she wants to win the nomination, Hillary has to at least pretend to care about reforming Wall Street, so last week she unveiled some token reform aimed at combating "short-termism" in the financial sector, for example, by using the tax code to encourage investors to hold their investments for longer periods of time. Many noted that Hillary's proposals were a direct challenge to so-called "activist investors" such as billionaire Carl Icahn, who has used his position as a major shareholder of Apple to pressure the company's executive leadership.

Few people would like to see Icahn taken down a peg more than rival investor Larry Fink, CEO of BlackRock, the largest investment firm in the world with nearly $5 trillion under its management. Shockingly, Fink is a longtime Democratic donor who has signaled his support for some of the policies Hillary outlined. Icahn, on the other hand, has given money to politicians from both parties but mostly to Republicans in recent years.

Fox Business correspondent Charlie Gasparino reported in 2014 that Fink is rooting for Clinton to win in 2016 because he would like to be her pick for Treasury Secretary. In 2013, Fink selected longtime Clinton confidante Cheryl Mills, who served as Hillary's chief of staff at the State Department, to join BlackRock's board of directors, praising her "unique insight in public policy." Mills also serves on the board of the Clinton Foundation.

Like Clinton, Fink believes the bank bailout was a good thing, telling Vanity Fair in a 2010 profile he blamed "the culture of America" for the financial crisis. BlackRock, as it happens, emerged as one of the big success stories in the aftermath of the crisis, mostly by winning government contracts to manage the bank bailouts. BlackRock was also hired to manage on the Federal Reserve's efforts to stimulate the housing market, and help revive the government-backed mortgage lenders Fannie Mae and Freddie Mac.

Meanwhile, the people who are going to vote for Hillary anyway don't even know that Wall Street has been pouring money into her campaign coffers for years.