Wall Street takes aim at Ocasio-Cortez in party primary

Some of Wall Street’s most powerful figures have poured money into the campaign to defeat Alexandria Ocasio-Cortez in her bid for re-election to the US House of Representatives, underscoring the self-described Democratic socialist’s tense relationship with her city’s most prominent industry.

Donors including Blackstone’s Stephen Schwarzman and David Solomon of Goldman Sachs have lined up behind Michelle Caruso-Cabrera, a former CNBC television journalist who is challenging Ms Ocasio-Cortez in the June 23 Democratic primary election in New York’s 14th congressional district.

Because the district, which covers parts of the New York City boroughs of Queens and the Bronx, is mainly Democratic, the winner of the primary would be the odds-on favourite in the November 3 general election.

The clash represents a test of the finance industry’s influence in the Democratic party, which was given a tug to the left when Ms Ocasio-Cortez, 30, won her first term with an upset victory in 2018 and went on to become a social media sensation known as “AOC”.

Ms Caruso-Cabrera, 53, has raised just over $2m, a substantial figure for a challenger, as dozens of chief executives, investors, bankers and lawyers have given the maximum allowable donation of $2,800 each to her primary campaign. Some have given another $2,800 for the general election.

However, Ms Ocasio-Cortez has taken in even more: $10.5m, reflecting the ability of figures on the party’s leftwing — such as Bernie Sanders, her preferred presidential candidate — to attract hundreds of thousands of small donations from contributors nationwide. The median size of her donations is $10, according to an Financial Times analysis of Federal Election Commission filings and the online fundraising platform ActBlue.

A marimekko chart showing AOC leads the way in small donations, while MCC has received more generous contributions

Mr Schwarzman, Blackstone’s co-founder, was among six company employees who have donated $2,800 each to Ms Caruso-Cabrera. Mr Solomon, Goldman’s chief executive, was joined by three other colleagues at the New York bank in backing the challenger.

Other firms with multiple donors to the campaign include the private equity group Apollo Global Management, the boutique investment bank Evercore and the hedge fund Elliott Management, where Ms Caruso-Cabrera’s husband, Stephen Dizard, was an adviser. 

Fifteen attorneys from the prominent New York law firm Paul, Weiss, Rifkind, Wharton and Garrison have donated to Ms Caruso-Cabrera including the firm’s chairman Brad Karp, a leading Democratic fundraiser who donated to several Democratic presidential candidates in 2020. 

Individuals can donate a maximum of $5,600 to each candidate in the 2019-2020 cycle ($2,800 for the primary election and $2,800 for the general election)

While many of Ms Caruso-Cabrera’s supporters raise money for Democrats, several are prominent business backers of President Donald Trump including Ken Langone, the billionaire founder of retailer Home Depot, activist investor Nelson Peltz and John Catsimatidis, who founded the Gristedes grocery chain. 

Larry Lindsey, a Republican economist who served in the George W Bush administration, said: “Michelle knows more about the world and how things work than probably a solid majority of Congress.” He said he had known the challenger for 15 years and wrote her campaign a cheque as soon as he learnt she was running. “She and I would consider ourselves pragmatic libertarians.” 

Leo Hindery, a pioneer in the cable television industry, said he met Ms Caruso-Cabrera this year at an event sponsored by the Council on Foreign Relations and decided then to support her, even though he described himself as a “progressive”.

“I think this post-Covid-19 era will be the most challenging era we’ve ever confronted. Michelle’s background in economics and finance will be tremendously helpful to the Democratic caucus,” he said, adding: “I’m happy to keep either of them in the seat.”

Ms Caruso-Cabrera’s credentials as a Democrat have been questioned by Ms Ocasio-Cortez. She was registered as a Republican as recently as 2015. In 2010 the former broadcaster wrote about a book about the financial crisis titled You Know I’m Right that said her favourite president was Ronald Reagan and described the Democratic party as “out of control when it comes to spending”. The book’s foreword was written by Larry Kudlow, a former CNBC colleague who is now Mr Trump’s economic adviser.

“It’s not surprising that Republicans would finance the campaign of a life-long Republican in a Democratic primary,” Ms Ocasio-Cortez told the FT in an email. “While we have pushed against corporate power with policies that favour everyday working Americans, those donors prefer to bankroll a candidate who answers to Wall Street over the needs of our constituents.”

Ms Caruso-Cabrera says she now strongly backs former US vice-president Joe Biden, the presumptive Democratic presidential nominee, and Nancy Pelosi, the Democratic speaker of the House, and has criticised Ms Ocasio-Cortez for her sometimes testy relations with the two party leaders.

line charts showing out-of-state donors to AOC and MCC campaigns

The 14th congressional district includes Queens neighbourhoods such as Jackson Heights, Corona and Elmhurst that have been ravaged by Covid-19. The district is roughly 50 per cent Hispanic and has a median annual household income of $60,000, less than the New York state median.

“Despite the money that is being spent against her, my sense is that the neighbourhood is with [Ms Ocasio-Cortez],” said Manu Bhagavan, a historian at Hunter College who lives in Jackson Heights. “If anything, it is even more charged up than it was when she first won. “​

Ms Caruso-Cabrera, who moved to the district this year, has attacked M. Ocasio-Cortez for opposing Amazon’s efforts to open a headquarters in Queens and has sparred with her over raising taxes for the wealthy. She also has hammered the incumbent for opposing this year’s $3tn stimulus package, the Cares Act, which Ms Ocasio-Cortez had characterised as a giveaway to Wall Street.

map of NYC donors by zip code to AOC and MCC campaigns

In a primary debate this month, Ms Caruso-Cabrera called Ms Ocasio-Cortez “divisive and polarising” and accused her of ignoring her district to cultivate her public image. “AOC is MIA,” she said.

Ms Ocasio-Cortez denied the accusation of being missing in action, noting she had held almost 20 town hall meetings in her first term. She referred to Ms Caruso-Cabrera’s well-heeled donor base as “reprehensible”. 

“Voting against jobs, hospitals and Covid testing in the Bronx and Queens . . . that is reprehensible,” a Caruso-Cabrera spokesperson said in a statement. “People who understand the economy support Michelle, and they know AOC is incapable of fixing the economy.”

Despite their divergent views on policy, the two share some personal similarities. Both play up their immigrant roots — Ms Caruso-Cabrera is of Cuban and Italian heritage and speaks Spanish like Ms Ocasio-Cortez, whose family hails from Puerto Rico.

Both primary candidates also have early experience as service workers — Ms Caruso-Cabrera as a waitress at Pizza Hut and Ms Ocasio-Cortez as a bartender.