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At the last Democratic debate, Hillary Clinton inadvertently sparked a firestorm when she invoked her woman donors and 9/11 as a defense to Bernie Sanders calling out her Wall Street donors. As Molly Ball tweeted, playing both the women’s card and the 9/11 card in one answer revealed just how sensitive Clinton was to the self-evident line of attack.

Clinton began her response characteristically by attacking Sanders for trying to “impugn my integrity.” To recall, Sanders had asked a simple but telling question: “Why… over her political career has Wall Street [been] a major– the major– campaign contributor to Hillary Clinton? You know, maybe they're dumb and they don't know what they're gonna get. But I don't think so…

He elaborated: “I have never heard a candidate, never, who's received huge amounts of money from oil, from coal, from Wall Street, from the military industrial complex, not one candidate, go, "Oh, these– these campaign contributions will not influence me. I'm gonna be independent." Now, why do they make millions of dollars of campaign contributions? They expect to get something. Everybody knows that. Once again, I am running a campaign differently than any other candidate. We are relying on small campaign donors, [750,000] and $30 apiece. That's who I'm indebted to.”

Hillary then demanded time to respond, charging Sanders with trying to “impugn my integrity, let’s be frank here.” She then went on to say that she was proud that most of her donors were “small,” and “a majority of my donors are women…And I represented New York on 9/11 when we were attacked,” and spent a lot of time helping Wall Street rebuild.

That set off a social media furor about how bizarre it was to evoke 9/11 as an excuse for taking big bucks from the big banks. As many have pointed out, the excuse simply won’t hold. Wall Street donors blessed Hillary and Bill with big bucks long before 9/11 and long after – and they got value for their investments.

Bill Clinton made former Goldman Sachs head Robert Rubin head of his economic council and then Treasury Secretary, and joined Rubin in driving banking deregulation – repeal of Glass-Steagall, prohibitions on regulating derivatives and more. Wall Street invested heavily in Hillary’s Senate race. And as senator, Hillary defended their interests, including a vote for the deplorable Bankruptcy Reform Act that favored the banks’ credit card operations over consumers. Wall Street has proved a leading donor to the Clinton Foundation and helped to build the Clintons’ personal fortunes. In 2013 alone, Hillary made over $3 million personally from giving speeches to various Wall Street forums. Wall Street banks and investment houses made up a third of her total speech income, while providing some $17 million in campaign contributions over the years.

Impugn This

Ironically, it isn’t Sanders (or Martin O’Malley who piled on the Sanders critique) who is impugning Mrs. Clinton’s integrity. It is her Wall Street donors themselves.

Clinton has sought to appeal to the populist temper of the times in both rhetoric and program. She’s called for more reforms to curb Wall Street’s excesses, including a surcharge on big banks that engage in risky lending, and a commitment to hold bankers individually responsible for their crimes and frauds. But she remains Wall Street’s favorite Democrat despite her new-born populist postures.

Long before Clinton even announced she was running, she began trying out populist rhetoric a la Sen. Elizabeth Warren, knowing its appeal to both the base of the party and the majority of the voters. Last year, William D. Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World," interviewed dozens of Wall Street’s leaders on their reaction to Clinton’s newfound populism:

“Down on Wall Street they don’t believe it for a minute. While the finance industry does genuinely hate Warren, the big bankers love Clinton, and by and large they badly want her to be president. Many of the rich and powerful in the financial industry—among them, Goldman Sachs CEO Lloyd Blankfein, Morgan Stanley CEO James Gorman, Tom Nides, a powerful vice chairman at Morgan Stanley, and the heads of JPMorganChase and Bank of America—consider Clinton a pragmatic problem-solver not prone to populist rhetoric. To them, she’s someone who gets the idea that we all benefit if Wall Street and American business thrive. What about her forays into fiery rhetoric? They dismiss it quickly as political maneuvers. None of them think she really means her populism.” (emphasis added)

More recently, Camden Fine, head of the Independent Community Bankers of America, similarly discounted Clinton’s populist rhetoric: “She gonna all of a sudden become Mrs. Wall Street if she’s elected. So it’s all Bernie theatrics right now. She’s a Clinton, for God’s sake. What do you expect?”

The two leading recipients of Wall Street donations in the presidential money primaries are, not surprisingly, establishment favorites Jeb Bush and Hillary Clinton. “They are both known entities with familiarity of the marketplace," Richard Hunt, head of the Consumer Bankers Association, said of Bush and Clinton.

As one Wall Street lawyer put it, “If it turns out to be Jeb vs. Hillary, we would love that and either outcome would be fine.”

Other bankers are more circumspect, but similarly unruffled by Clinton’s rhetoric or claim to have the strongest reform program for Wall Street. Cohan quotes a Wall Street “investment professional with close ties Washington": “I think people are very excited about Hillary ... Most people in New York on the finance side view her as being very pragmatic. I think they have confidence that she understands how things work and that she’s not a populist.”

Despite Hillary's recent protestations that she is a real progressive, Greg Fleming, the president of Morgan Stanley Wealth and Investment Management, says that the “broad perception” across Wall Street, among both Democrats and Republicans, is that she, “like her husband, will govern from the center, and work to get things done, and be capable of garnering support across different groups, including working with Republicans.”

Rodgin Cohen, who as Sullivan & Cromwell LLP’s senior chairman is the dean of Wall Street lawyers, said Wall Street supports her because she’s qualified to be president – and because she appreciates finance and nuance. “She rejects simplistic solutions and slogans in favor of comprehensive and thoughtful analysis,” Cohen said, “whether in the financial arena or elsewhere.”

The Political Cost

Clinton’s Wall Street ties will raise real questions for many voters. The New York Times reports that when Clinton recently repeated her inaccurate claim that she has the “toughest most comprehensive proposals for dealing with Wall Street” at a rally in Charleston, S.C., a voter holding a “Bernie” sign interjected, “By taking their money?”

Sanders is now trying out a new TV commercial in Iowa and New Hampshire, focusing on Clinton’s Wall Street money, warning that “you can’t change a corrupt system by taking its money.” If Hillary wins the nomination, Republicans – particularly if Donald Trump somehow becomes the nominee – will surely launch faux populist attacks on Hillary's connections to the banks to try to discredit her. (But unlike Sanders, they will be so compromised by dark money that they will have little credibility on the issue).

Inevitably, the big money going from Wall Street into the Clinton campaign reinforces doubts about the strength of her reform promises. But it isn’t Sanders or O’Malley who impugn her integrity; it is her Wall Street donors themselves. They are sophisticated, cynical and paying attention. And they are confident her new-found populism is a campaign posture, not a real position.

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