How Pence pick could hurt Donald Trump’s fundraising
Indiana Gov. Mike Pence takes photos with supporters during a a rally Saturday in Zionsville, Ind. (Photo: Darron Cummings, AP)
WASHINGTON – Donald Trump, already behind Democrat Hillary Clinton in the race for campaign cash, may have hampered his fundraising ability even more by picking Indiana Gov. Mike Pence as his running mate.
Under a 2010 Securities and Exchange Commission rule aiming at curbing “pay-to-play” practices, investment managers who contribute more than a few hundred dollars to an elected official must wait two years before they can earn money providing investment advice to a government agency connected to that official.
As a result, private-equity firms and other Wall Street interests would have to steer clear of helping manage Indiana’s pension funds if they donated big sums to the Trump-Pence ticket. The state’s retirement system had nearly $30 billion in assets under management at the end of the 2015 fiscal year. The provision is known in the wonky world of securities regulation by its title, Rule 206-4 (5).
“Given the extent to which presidential candidates from both political parties have relied historically on contributions from Wall Street, Rule 206-4 (5) will place the Trump campaign at a substantial financial disadvantage,” said Brett Kappel, Washington-based lawyer who is an expert on political law.
Kappel says the SEC regulation also leaves open the possibility that donations to a pro-Trump super PAC could trigger the two-year ban because the rule prohibits an investment adviser from doing "anything indirectly which, if done directly, would result in a violation.”
So far, little Wall Street money has flowed to Trump, who only recently began to raise money in earnest with the Republican National Committee. But Bloomberg Politicsnotes that the rule could prove awkward for some early contributors, such as Thomas Barrack, founder of Colony Capital. The firm appears among the "investment professionals" providing advice on real estate in the Indiana Public Retirement System’s annual report.
Barrack, a longtime Trump friend, hosted the campaign’s first big fundraiser in May. He also donated $415,000 that month to Trump Victory, a joint fundraising committee Trump established with the RNC and several state parties, new filings show.
Lawyers say the SEC rule is more likely to affect future fundraising. Investment advisers who donated before Pence joined the ticket are not likely to run afoul of securities regulators, said Kenneth Gross, who leads the political law practice at Skadden, Arps, Slate, Meagher & Flom.
Neither aides to Barrack nor Trump immediately responded to inquiries.
Trump, however, doesn’t seem eager to make many new friends on Wall Street.
Just this week, he tweeted this about the presumptive Democratic nominee: “Crooked Hillary Clinton is bought and paid for by Wall Street, lobbyists and special interests. She will sell our country down the tubes!”
Surrounded by family members, Republican presidential candidate Donald Trump stands with his newly selected vice presidential running mate Mike Pence.
