Does Wall Street Get to Elect Its Own Sheriff?

Does Wall Street Get to Elect Its Own Sheriff?

Does Wall Street Get to Elect Its Own Sheriff?

A blog about business, finance, and economics.
Sept. 8 2010 12:09 PM

Does Wall Street Get to Elect Its Own Sheriff?

I imagine that I don't have to explain to Slate readers that the job of New York State attorney general is an important one; the office's recent occupants have had a profound impact on how Wall Street does business. And so how, in the perfectly rational, merit-based democracy that is New York State, do we go about selecting the next AG? In all likelihood, some tiny fraction of registered Democrats will choose this Tuesday. How closely are they paying attention? In a poll taken at the end of August , when asked an open-ended question about who they would vote for, more registered Democrats (8 percent) gave the name of someone not on the ballot than named any of the five candidates. A full 77 percent said they didn't know who they would vote for-two weeks before the vote.

(It is theoretically possible that a Republican could be elected attorney general; it's happened before . This year, however, the only Republican candidate is yet another unknown candidate, the district attorney of Staten Island, which is not historically a great launching pad for statewide office.)

Advertisement

Under these rather pathetic circumstances, it seems entirely likely that the best-funded candidate will win; that appears to be Nassau County district attorney Kathleen Rice. But according to an analysis done by the New York Public Interest Research Group for the Financial Times , Wall Street's favored candidate by a wide margin is Eric Dinallo , who until last year was the superintendent of the state's insurance department. Not only has Dinallo raised more than $100,000 from financial companies, says the FT, but "his supporters include Jim Chanos, the noted short seller, who has donated $50,000 individually and $16,500 through Kynikos Associates, his hedge fund. Brian Duperreault, chief executive of Marsh & McLennan, the insurance broker, has donated $37,800. Jon Winkelried and Marc Spilker, formerly high-profile employees at Goldman Sachs, have donated $25,000 and $18,100, respectively."

Is this a potential conflict of interest? I'm not sure there's a lot of value in hand-wringing here. After all, New York being New York, you raise money where the money is. And it's worth noting that Dinallo says he favors

. Moreover, if one of Dinallo's opponents wins on Tuesday, you can be sure that Wall Street funds will be flowing to the nominee in time for the general election in November. Still, one of the lessons we should have learned from the meltdown of 2008 is that the patchwork of sketchy regulations and mediocre administrators in state government were a major reason why problems with the financial system were not spotted earlier. If there's any evidence that this traumatic experience has created a wave to reform how the state relates to Wall Street, it's doing a great job of staying hidden.

James Ledbetter is the editor of Inc. and the host of Panoply’s podcast Inc. Uncensored.