Garrett Fundraising Lags as Wall Street Shies Away

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Representative Scott Garrett was outraised 2-1 by his likely Democratic challenger, a sign that some corporate donors are withholding support for the lawmaker after he reportedly disparaged gays in a private meeting earlier this year.

Garrett, the Republican chairman of a House Financial Services subcommittee that oversees Wall Street, pulled in $175,305 for the quarter that ended Sept. 30, according to federal filings submitted Thursday. His potential opponent Josh Gottheimer, a Microsoft Corp. executive, raised $400,232.

Not all financial services firms shied away from Garrett, 56, a seven-term representative from northern New Jersey whose deregulatory policy bent often aligns with the industry. His corporate donors this period included political action committees from U.S. Bancorp, UBS Group AG, Nomura Holdings Inc. and mutual fund firm Capital Group Cos.

“Garrett’s alleged comments sparked new interest in the race on the Democratic side,” Nathan Gonzales, editor of the Rothenberg & Gonzales Political Report, said in an interview. “Gottheimer has cashed in on that.”

Garrett’s panel is informally known on Capitol Hill as the ATM because a seat on it all but guarantees a stream of cash from the financial services lobby. Many of those potential donors, however, began to reconsider earlier this summer after Politico reported that Garrett complained that his party had recruited gay candidates.

Fundraiser Canceled

Shortly after, Goldman Sachs Group Inc. decided to stop giving money to Garrett, and the Big Four accounting firms abruptly canceled a fundraiser. In recent months, some senior Wall Street executives have been backing Gottheimer publicly, even hosting fundraisers -- a stance that carries some risk because of Garrett’s power over the industry.

Many of the financial companies and executives that have traditionally given to Garrett, including top contributors like hedge fund Elliott Management, were outspoken supporters of gay marriage. Wall Street firms also have been in the forefront of offering benefits to same-sex partners and often tout their diversity as a means of attracting both workers and clients.

First elected in 2002, Garrett is known as a staunch conservative who is willing to buck his own party’s leadership. As the chairman of the subcommittee on capital markets he has pushed legislation to soften regulatory restrictions on Wall Street.

Hitting the Phones

Garrett, according to financial lobbyists, has been more aggressive in seeking contributions since the anti-gay comments. He is even making some calls himself, which is unusual, they added. Much of Garrett’s fundraising is handled by an outside consultant.

A spokesman for Garrett didn’t respond to a request for comment.

Some donors that backed away earlier have returned, according to the filings. Accounting firm KPMG, which agreed to cancel the fundraiser this summer, gave $2,000 last quarter. The American Institute of Certified Public Accountants gave $2,500. Spokesmen for KPMG and the AICPA declined to comment.

Gottheimer, who is positioning himself as a pro-business Democrat, received contributions from executives at Bain Capital, Blackstone Group LP, and JPMorgan Chase & Co., among other companies. Dan Loeb, founder of hedge fund firm Third Point, and his wife have given more than $10,000 to Gottheimer.

Still, while Garrett’s fundraising lagged last quarter, he has $2.3 million in cash on hand. Gottheimer has about $934,000.

“I don’t think Scott Garrett is going to lose because he didn’t have enough money,” Gonzales said. “He might lose for other things, but I think he’ll have enough money to run the campaign he wants to run.”

(A previous version of this story misstated the amount of money that Dan Loeb and his wife had contributed to Gottheimer.)

(Updates to show Garrett’s congressional district in third paragraph.)
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