Candidates Sean Patrick Maloney, left and Zephyr Teachout, right, listen as Leecia Eve speaks during the Democratic Primary debate for New York State Attorney General at John Jay College of Criminal Justice in New York, Tuesday, Aug. 28, 2018. All of the candidates stressed the AG's role in rooting out corruption and reforming the criminal justice system. (Holly Pickett/New York Times via AP, Pool)
Candidates Sean Maloney, left, and Zephyr Teachout, right, listen as Leecia Eve speaks during the Democratic primary debate for New York attorney-general on August 28. Letitia James is also standing in the race. Who gets to hold the role will be consequential for Wall Street © AP

Senior figures from Wall Street are lining up in support of a three-term Democratic congressman in the race for New York attorney-general, as the finance industry frets over who will be elected to an office that holds significant sway over its fortunes.

Congressman Sean Maloney, a lawyer and former White House staffer under Bill Clinton, has won the biggest donations from Wall Street heavyweights, according to an examination of public filings that show he has already raised $1.8m for his campaign.

While many are focused on the midterm elections for Congress, which could change the balance of power in Washington, the New York attorney-general race is the single most consequential for Wall Street. Because of New York’s role as the US financial capital, the state’s chief legal officer has become known as the “sheriff of Wall Street”, after previous holders such as Eliot Spitzer used it to pursue wide-ranging legal cases against the industry.

In heavily Democratic New York, the party’s primary currently under way is likely to determine the eventual winner, and Mr Maloney has opened up a funding lead over rival candidates Letitia James, Zephyr Teachout and Leecia Eve.

Donations for Mr Maloney have come from marquee Wall Street lawyers including Marty Lipton of Wachtell, Lipton, Rosen & Katz; and Rodgin Cohen of Sullivan & Cromwell; real estate executives like David Simon; and billionaires such as Ron Perelman, who owns MacAndrews & Forbes, a cosmetics-to-biotech conglomerate.

Mr Lipton said that all four Democrats were “excellent candidates” but Mr Maloney “is the most qualified”.

Mr Maloney’s record in Congress has been praised by several senior Democrats for opposing President Donald Trump but he also voted in favour of changes to the Dodd-Frank law that loosened regulations for Wall Street.

Ms James, who has the support of New York’s Governor Andrew Cuomo, is seen as the establishment candidate. Currently the New York City public advocate and a former member of the city council, she is second in the fundraising race with $1.6m.

Her biggest donors are unions, although she has also raised funds from John Catsimatidis, the Republican former mayoral candidate, who founded the Gristedes grocery chain, and Jennifer Soros, daughter-in-law of hedge fund manager George Soros.

Ms Teachout, a law professor endorsed by several Democratic Socialist candidates and two of the major New York newspapers, has collected $920,156, and Ms Eve, a staffer to Joe Biden, former US vice-president, has raised $334,898, according to election records.

Despite the big donations for Mr Maloney and Ms James, the race has no clear frontrunner.

The position was unexpectedly vacated after Eric Schneiderman stepped down in May over allegations that he physically abused several women. The winner of the Democratic race will face Republican candidate Keith Wofford, a lawyer at the corporate law firm Ropes & Gray, in November.

At a debate between the four primary candidates last week, Ms James rejected the sheriff of Wall Street nickname, saying she would also focus on gun violence, the environment and immigration issues.

However, she has targeted hedge funds before. As public advocate, she pulled the city’s employees’ retirement system’s $1.5bn investment in hedge funds in 2016, attacking managers for refusing to negotiate fees and underperforming.

“Let them sell their summer homes and jets, and return those fees to their investors,” she said at the time.

One Wall Street lawyer who donated to Mr Maloney said he thought Ms James was too liberal and that the congressman was the best choice.

Mr Maloney railed against corporate campaign contributions at last week’s debate, but said “there is not a candidate on this stage who has not accepted corporate money in political campaigns”.

“Money is killing our politics,” he said. “We need to have publicly financed campaigns like we do in New York City, and you will get the big money out of politics. This office has so much authority, that there is literally no one in New York, including not-for-profits, who can give to this office without a conflict, because everybody is potentially subject to its jurisdiction.”

Ms Eve, who is currently on leave from Verizon, the US telecommunications group, has attracted donations from several executives at the company, as well as Ajay Banga, the president and chief executive of Mastercard, and Vernon Jordan, an executive at Lazard.

All four of the candidates would represent firsts for the position. Any of the three women would be the first female. Ms James and Ms Eve would be the first African-American woman, and Mr Maloney would be the first openly gay holder of the post.

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