Schwarzman Backs Romney as Wall Street Turns Away From Obama

Monday, 28 November 2011 06:01 AM

Stephen Schwarzman, chairman of the world’s largest private-equity firm, will host a fundraiser for Mitt Romney at his Park Avenue apartment next month, in a sign that Romney is closing the sale with Wall Street’s wealthiest donors.

The fundraiser marks Schwarzman’s inaugural step to help Romney secure the Republican presidential nomination, according to a person familiar with Schwarzman’s plans, who spoke on condition of anonymity. He will follow up with efforts to persuade colleagues in the financial industry to get behind Romney’s presidential bid, the person said.

Backing from Schwarzman, co-founder of Blackstone Group LP and a longtime Republican donor, may open doors for Romney with other contributors as the field of Republican candidates remains crowded with a little more than five weeks before the first nomination contest.

“Steve Schwarzman is one of the top fundraisers on Wall Street and this will help the Romney campaign, not only for the actual fundraising he will do, but the signal it sends to other fundraisers that Wall Street leaders believe Romney is very likely to be the nominee,” said Steve Duprey, who was a senior adviser to Republican Senator John McCain’s presidential campaign in 2008.

Crowded Field

While Romney is consistently among the top choices of Republican voters in national polls, other candidates, including former House Speaker Newt Gingrich, businessman Herman Cain and Texas Governor Rick Perry, have risen to challenge Romney for frontrunner status. Gingrich received a boost yesterday with the endorsement of New Hampshire’s Union Leader newspaper, the largest in the state, which holds its primary Jan. 10, one week after the Iowa caucuses.

Romney, the former governor of Massachusetts, is leading the Republican field in fundraising and collected $32 million through Sept. 30, according to the latest financial disclosure reports. The next closest candidate, Perry, raised $17 million.

Schwarzman, through Blackstone spokesman Peter Rose, declined to comment.

President Barack Obama’s campaign has struggled to raise cash from the financial industry, which was his biggest backer in 2008. Obama raised $1.6 million through Sept. 30 from securities and investment industry employees and their families. By comparison, Romney has brought in $3.6 million, according to the Center for Responsive Politics, a Washington-based research group that tracks political giving. Four years ago, Obama raised $16 million from Wall Street.

Sitting Out

One of Obama’s biggest Wall Street fundraisers in 2008, David Heller, the co-head of securities sales and trading at Goldman Sachs Group Inc., is not raising money for Obama this cycle, according to a person familiar with Heller’s plans. The person requested anonymity to discuss the challenges Obama faces raising money on Wall Street.

At least 100 former Obama contributors, mostly investors, have given to Romney’s 2012 campaign, according to a Bloomberg analysis of data from the Center for Responsive Politics.

With the unemployment rate stuck at 9 percent and growth still sluggish after the worst recession in seven decades, the question of who can best manage the recovery will be central in the general election. The Standard & Poor’s 500 Financials Index has tumbled 13 percent in November to lead the S&P 500’s 7.6 percent slide.

Campaign Response

An Obama campaign official indicated Wall Street’s cooling on Obama will be a point of populist appeal, highlighting the president’s support for tougher regulations on financial institutions while casting Romney, who spent most of his career outside politics as head of the private firm Bain Capital LLC, as the candidate who would protect banks over consumers.

“It’s no surprise that Mitt Romney, who has made letting Wall Street write its own rules again the first tenet of his economic platform, is attracting the support of others who disagree,” Obama campaign spokesman Ben LaBolt said.

While not confirming Schwarzman’s endorsement, a representative of Romney’s campaign said Obama’s policies are driving supporters to the Republican candidate.

“To the extent anyone is supporting Mitt Romney over President Obama it is because of the state of the economy and the president’s failure to create jobs,” Andrea Saul, a campaign spokeswoman, said in an e-mail.

Obama Fundraising

Still, Obama isn’t lagging in fundraising. He reported raising $88 million through Sept. 30, exceeding his record fundraising pace of four years ago.

Unlike Obama, Romney is facing a nomination fight, and fundraisers like Schwarzman will be important to sustaining his campaign.

“The key resource for that kind of fight is money,” Duprey said. “Those who have it can fight in the later contests,” he said. “Those who don’t, can’t.”

While the Blackstone chairman, 64, wasn’t a major fundraiser for McCain in 2008, according to Duprey and financial disclosure reports, he collected more than $100,000 for President George W. Bush’s 2004 re-election campaign.

Schwarzman has been critical of Obama’s stance toward Wall Street, even as he encouraged bipartisan efforts in Washington to lower taxes. In August 2010, he compared the administration’s efforts to double taxes on the income of private equity firms such as his to “when Hitler invaded Poland in 1939,” according to a New York Post account of a private meeting. He later apologized for the comparison while maintaining his criticism of the tax proposal.

Four months later, on Dec. 16, he said the tax bill that Obama signed, which extended through 2012 all Bush-era tax reductions on income, capital gains and dividends, “shows from a governmental point of view that we can do business together.”

© Copyright 2018 Bloomberg News. All rights reserved.

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Stephen Schwarzman, chairman of the world s largest private-equity firm, will host a fundraiser for Mitt Romney at his Park Avenue apartment next month, in a sign that Romney is closing the sale with Wall Street s wealthiest donors. The fundraiser marks Schwarzman s...
Monday, 28 November 2011 06:01 AM
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