Will Wall Street Lose on Election Day?

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At the beginning of the week, the Democratic Congressional Campaign Committee announced six new additions to their “Red to Blue” list, a signal of support from the party. The average margin of victory for Donald Trump in 2024 in these six seats was more than 16 points. But that’s not what caught my eye; it was the presence on the list of Arkansas’s Second Congressional District, which includes the majority of Little Rock and its suburbs.

My colleague Zachary Groz wrote about the U.S. Senate race in Arkansas, where Sen. Tom Cotton is fending off a challenge from a populist farmer named Hallie Shoffner. But this House seat that popped up on Red to Blue is particularly significant, and for one reason: It’s held by French Hill. He’s the current chair of the House Financial Services Committee. He’s Wall Street’s congressman.

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That gives him access to a veritable ocean of cash. Hill has received $1.46 million in PAC donations this cycle, according to the website Open Secrets. Four of the top five industries that have contributed to him directly are commercial banks ($430,000), security brokers and investment firms ($247,000), crypto companies ($174,000), and life insurance companies ($165,000). The other top industry is “retired,” a perennial for old Republicans boosted by other old Republicans. Online trading app Robinhood, insurer MetLife, crypto exchange Coinbase, energy trader Virtu, and the Mortgage Bankers Association are Hill’s biggest donors. Blackstone CEO Stephen Schwarzman and Charles Schwab himself have maxed out. All that was as of the end of June.

Yet it hasn’t been enough to stop the bleeding, as Democrat Chris Jones tries to pull off the upset. There’s been $1.5 million in Republican support for Hill since August, Punchbowl News reported. This includes half a million from an obscure group formed in July called the “Committee for American Leadership,” which has compared Jones to AOC and Bernie Sanders in one attack ad, while another made vague claims of corruption. Defend American Jobs, a D.C.-area conservative PAC, is spending a similar amount boosting Hill.

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Republican committee chairs aren’t in the habit of getting rescued by PACs, and certainly not if they have access to the giant fortress of cash available on Wall Street. An upset loss here for Hill—and that’s what it would be—would rob the financial industry of one of their biggest champions, himself a former bank CEO (of Arkansas firm Delta Trust & Banking Corporation) who has put himself at the center of virtually every deregulatory effort of the past decade.

Hill is not alone in his vulnerability. Several longtime Republicans on the Financial Services Committee are in tough races this year, and the banking industry might not be able to help them out of the ditch. Wall Street is used to getting its way in Washington, and the upstart crypto industry even more so. But times are changing fast.

In Michigan, Rep. Bill Huizenga, a longtime Financial Services Committee member, is locked in one of the most expensive races in the country against Sean McCann. Rep. Ann Wagner (R-MO), another senior committee member, lost out on her district being shored up when the gerrymandered map in Missouri was invalidated; she’s in a tight race against Fred Wellman. Rep. Bryan Steil (R-WI) could fall in a southern Wisconsin seat against Mitchell Berman, an emergency room nurse.

And several more recent Financial Services Republicans, put on specifically because of access to donor cash the committee membership provides, could get wiped out in a Democratic wave. This includes Reps. Mike Lawler (R-NY), Monica De La Cruz (R-TX), Zach Nunn (R-IA), and Maria Elvira Salazar (R-FL).

While Silicon Valley may have supplanted the financial industry as the boss villains of the age, the banks still have lots of money that buys lots of clout. No other industry has benefited as much as banks and the financial sector from the effective end of law enforcement against corporations, as a recent Public Citizen report showed. Fifty different enforcement operations against financial institutions have been canceled by the Trump administration, according to the report.

But that quid pro quo relationship could also be the source of Wall Street’s downfall. “Over time, there’s definitely been a buildup of voters who resent the role money plays in elections and will vote against that as much as any particular policy or candidate,” said Carter Dougherty, senior fellow for anti-monopoly and finance at Demand Progress. “If billionaires pump money into elections, they should not be surprised that their cash generates resentment in a democratic society.”

A recent poll from Guardrails Alliance shines light on that trend. Surveys in Iowa, Michigan, and Ohio found around 79 percent of voters concerned about Wall Street’s influence in elections, and similar numbers for the crypto industry.

That influence appears in different ways. The banking giants have not built their own free-spending super PACs; their money flows directly to individual candidates, as it has with French Hill. By contrast, crypto companies have bundled cash to fire out super PAC attacks, the biggest being an expected $30 million in Ohio’s Senate race against former Sen. Sherrod Brown.

The industry did the same thing in 2024 to defeat Brown. But waiting so long to see if the Senate would pass their top priority, the deregulatory CLARITY Act (which failed), meant that Brown was not defined negatively early. And indeed, the Ohio Democrat hasn’t trailed in any credible poll since June; whatever late money has come in hasn’t worked yet. Populist anger, including anger at the wholesale purchase of elections, is drowning out those attacks in Ohio and elsewhere.

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“Dropping millions in a Senate race like in Ohio is increasingly a political liability,” said Mark Hays with Americans for Financial Reform and Demand Progress. “Voters are right: crypto shouldn’t be trying to use political money to buy whatever policy they like.”

Crypto’s main super PAC, Fairshake, is also stepping out in House races, announcing support for 32 House members (19 Democrats and 13 Republicans) who back the industry. Three of those who will get the most support, at least $1 million, are Republican Financial Services members mentioned above: Hill, Huizenga, and Steil. But the vast majority of the support is going to safe-seat races where the industry can put a big winning record on a scoreboard after the fact without doing much to affect the ultimate outcome.

In reality, even crypto supporters have turned against the type of politicians the industry supports, criticizing Trump’s coin corruption (which has cost investors $4.7 billion while Trump and his family have reaped $1.4 billion, as Public Citizen reported) for painting the whole enterprise as full of scammers. (If the shoe fits …) Being willing to give the crypto industry whatever it wants could prove to be an electoral hindrance more than a help, even among users of crypto. And when voters find out that crypto is paying to get its allies into Congress, their mood sours even more.

The reality is that Americans are more and more attracted to populist interventions in markets amid a cost-of-living crisis. They want price caps and restrictions on corporate takeover of markets in housing and health care. They want to do something about the growing stratification between the ultra-rich and everybody else. And they don’t appear to be interested in candidates who call for vagaries like “financial innovation” to build economic growth.

The political environment is poisonous to Wall Street, and that anger might just take down some of their biggest stalwarts in Washington.

The post appeared first on The American Prospect.