In New York, Wall Street Is on the Primary Ballot

Pummeling Wall Street over its marquee role in the recent financial crisis would seem a can't-miss political strategy this election year. Not for Reshma Saujani, a young former hedge fund lawyer trying to unseat nine-term New York Representative Carolyn Maloney in a Democratic primary contest set for Sept. 14.

Saujani, 34, is taking on a seasoned New York political figure in Maloney, whose district encompasses Manhattan's East Side and parts of Queens. Last year, Maloney co-sponsored a measure, which passed in the House, that would slap a 90 percent tax on bankers' bonuses. (It hasn't yet been taken up in the Senate.) She also championed a new pro-consumer credit-card law that makes interest-rate and fee policies more transparent—and that Citigroup (C), JPMorgan Chase (JPM), and other banks opposed.

In contrast, Saujani is against the bonus tax and the special levy that President Barack Obama wants to impose on financial institutions to recover taxpayer money that was used to bail out the U.S. banking system. She calls for a "partnership" with Wall Street to rebuild New York's financial sector. While Saujani says banks should be required to hold more capital and "absolutely" deserve blame for the economic collapse, she cautions against excessive regulation. "When financial services don't do well, the city and the state don't do well," she says.

Saujani is the daughter of Indian refugees who fled from Uganda during the violent reign of Idi Amin. Her political supporters range from Bangladeshi taxi drivers to Wall Street executives who have helped her out-hustle Mahoney for campaign funds this year. Goldman Sachs (GS) President Gary Cohn gave her $2,400, and Morgan Stanley (MS) Chairman John J. Mack hosted a fund-raiser for her at Manhattan's Links Club.

In late March, Saujani also got $1,000 and backing from Diana Taylor, a Wolfensohn & Co. managing director, Citigroup board member, and the companion of New York Mayor Michael Bloomberg (the owner of this magazine, who is staying neutral in the race). "There are thousands and thousands of families that are voters that work at JPMorgan and Morgan Stanley and Goldman Sachs and that live in this district," says Saujani. "Carolyn has forgotten who some of her constituents are." Says Maloney spokesman George Arzt: "It mystifies me in this liberal, Manhattan district that she can run as a champion of Wall Street."

Saujani faces hurdles. Maloney has the backing of the local Democrats and Obama and a strong pro-consumer record. Although Saujani's résumé includes work at three hedge funds. she says voters understand she's not a fat-cat banker. "I've been very honest about where I came from," she says.

The Maloney-Saujani contest is one of many primary skirmishes in 2010. Voters are angry about Obama's health-care overhaul and the weak economy. The Tea Party movement is targeting moderate Republicans, while the liberal crowd aims to replace centrist Democrats.

The bottom line: In this election, the question is whether Saujani's agenda to protect Wall Street jobs will trump anger about the crisis.

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