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Thursday, June 20, 2024

Wall Street Billionaires Are Rushing to Back Trump, Verdict Be Damned


(Bloomberg) — Before 12 New Yorkers branded Donald Trump a felon, a very different kind of jury — one assembled at the sumptuous Pierre hotel on Fifth Avenue — had reached a verdict of its own.

Even if the courtroom jury found him guilty as charged, the wealthy Wall Streeters at the Pierre concluded, he’d still be their choice for the White House.

That meeting, 16 days prior to Thursday’s historic verdict, laid bare the cool calculus now at play in American finance.

From longtime supporters to reluctant fellow travelers, a growing number of prominent figures in US business and finance are embracing the possibility of a Trump restoration — criminal conviction be damned.

“This verdict will have less than zero impact on my support,” Omeed Malik, president of 1789 Capital and a co-host of the Pierre fundraiser for Trump, said as he processed the news Thursday evening. Echoing Trump and Republican leaders, Malik characterized the entire hush-money trial as a “weaponization of the legal system” and “jurisdictional justice.”

This much is certain: Some financiers who abandoned Trump after his supporters stormed the US Capitol on Jan. 6, 2021 — and kept their distance as he continued to claim falsely that the 2020 election was stolen — are now throwing their weight behind him again.  

A big reason, in a word: money. Trump has promised to cut taxes for the wealthy and eliminate regulations. President Joe Biden wants the opposite.

The gilded fundraiser at the Pierre, hosted by billionaire Howard Lutnick, reached deep pockets in high-caste Manhattan, even as Trump’s landmark trial was unfolding in tawdry detail in a dingy courtroom downtown. Malik doubted the guilty verdict would change the mind of a single person who was there.

Or the minds of many others, it seems. Less than two weeks after that gathering, without waiting to learn the jury’s decision, private-equity mogul and longtime Republican donor Stephen Schwarzman announced he was getting behind Trump again. The Blackstone Inc. co-founder is among the 40 richest people in the world, with a $41 billion fortune, according to the Bloomberg Billionaires Index.

On Thursday hours before the verdict reverberated through Wall Street and Washington, another prominent New York billionaire, hedge fund investor Bill Ackman, was said to be leaning toward backing the former president too. Later, in a post on X, Ackman pointed to a tweet by Florida Governor Ron DeSantis suggesting the US justice system — the Manhattan prosecutor in the case, the judge and even the jury — had been “bent” for political aims. Similar claims shot across social media.

A spokesperson for Ackman declined to comment, while Schwarzman and Lutnick couldn’t be reached for comment after the guilty verdict.

The developments and, more, their timing underscore the shifting dynamic between Trump and some of the nation’s financial leaders. Nowhere is that more apparent than in monied Manhattan, where Trump first shot to fame and fortune. For decades, elites in Trump’s hometown sneered and dismissed him as a small-time player in real estate — to be indulged, but never accepted.

Now, with Election Day just five months off, the former president’s promises on taxes and regulation are winning over executives, even though Trump has now been convicted in the first criminal trial of a US president in the nation’s history.

“Wall Street has never been known for high character and high values,” said Dan Lufkin, co-founder of Donaldson, Lufkin & Jenrette, the investment bank where Schwarzman once worked.

“Is there a willingness to support Trump if it looks like he’s on the right track? Yes,” Lufkin went on. “I’m not proud of that, and I’m not part of that either.” (Lufkin initially supported Nikki Haley, an early Wall Street favorite who drew support from Citadel’s Ken Griffin and others.)

Others like billionaire Barry Sternlicht want the candidates to appeal to moderates. “I am right now, sitting this out,” he said in an email minutes before the verdict.

After two days of deliberation, the jury of Trump’s peers found him guilty of falsifying business records to conceal a hush-money payment to a porn star. The verdict capped an extraordinary seven-week-long trial that transformed familiar scenes and traditions of election-year politics into a split-screen tableau of sex and scandal.

Trump, the presumptive GOP nominee, now enters the final stretch of a razor-thin race for the White House with a black mark that would end the career of virtually any other presidential hopeful. Set to be sentenced just before the Republican National Convention in July, he is certain to appeal.

How voters will react to this extraordinary turn of events is uncertain.

But the former president’s backers — including those in the business and financial community — have already begun to rally around him. Within minutes of the guilty verdict, Trump’s campaign circulated a fundraising email characterizing him as a “political prisoner” and queried: “Is this the end of America?” A surge in interest caused temporary disruptions on WinRed, the site the Republican party uses to collect online donations.

The campaign raised a total of $34.8 million from “small dollar donors” following the verdict on Thursday evening, it said in a statement.

Trump has previously capitalized on his legal troubles to raise money. His campaign raked in $25 million more than Biden in April — a first this election season. But Biden and the Democratic Party still hold a war chest worth $192 million, about twice as much as Trump and the GOP.

Scott Bessent, the former Soros Fund Management chief investment officer who is among those seen in the running to be Trump’s Treasury Secretary, said he was “personally disappointed” by the verdict but doesn’t think it will matter come November. 

“I think people have already made up their minds,” Bessent said, adding that the development might even spur enthusiasm for Trump.

Billionaire John Paulson, who Trump has floated publicly as a potential candidate for Treasury Secretary, condemned the trial and conviction as politically motivated, calling it a “black mark on our judicial system.” The verdict would increase support for Trump, he said in an email. 

Read more: Ex-Soros Star Bessent Jockeys With Paulson to Run Trump Treasury

Even some Wall Street leaders who have previously lashed out at Trump have tempered their attitudes.

Jamie Dimon, at a gathering of JPMorgan Chase & Co. alumni at the Morgan Library & Museum in Manhattan Thursday night just hours after the verdict, highlighted that the former president had 74 million people vote for him in 2020 and emphasized the need to respect them. It was a departure from his expletive-ridden tirade about Trump at a previous gathering of the group, when the events of Jan. 6 were still fresh in everyone’s mind.

The remarks echoed comments Dimon made at the World Economic Forum in Davos earlier this year, when he said Trump was “kind of right” on certain policies and that Democrats should “be a little more respectful” of his supporters. Some of those gathered Thursday night feverishly speculated that Trump’s perceived martyrdom would actually benefit him heading into the November election.

Privately, Trump’s Wall Street backers insist this is about more than money. Some point to what they view as an increasing tolerance for antisemitism among progressive Democrats, especially after the Oct. 7 attack by Hamas on Israel and the Jewish state’s subsequent bombing campaign in Gaza. (Schwarzman distanced himself from the first Trump administration after Trump equivocated when asked about torch-carrying right-wing protesters who marched in Charlottesville, Virginia, in 2017, chanting antisemitic slogans.) 

Others complain that progressives with a dim view of capitalism — and Wall Street capitalists, in particular — have co-opted Biden and the Democratic Party. Still others worry that Biden, 81, is too old to be president (Trump is 77).

What perplexes people like Whitney Tilson is the souring sentiment toward Biden among some peers in the financial community, even in the face of successive stock-market highs, low unemployment and soaring corporate profits.

“For people in the investing business, the Joe Biden presidency has been extraordinarily good for them,” said Tilson, who used to run Kase Capital Management, a $200 million hedge fund. “It’s indeed puzzling to me how the very people who’ve done the best under Joe Biden seem to be the most dissatisfied with this presidency.”

The financial industry has no shortage of opportunists. And Tilson suspects that extends to Trump’s backers in the upper rungs of the business community.

“They’ve concluded Trump is going to win,” Tilson said. “And if he’s the next president, then it’s in their self-interest to support him early.”

To contact the authors of this story:

Amanda L Gordon in New York at [email protected]

Sridhar Natarajan in New York at [email protected]

 

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