Hillary Clinton’s presidential campaign sought to turn a potential liability into a strength on Monday, goading rival Bernie Sanders into a fight ahead of his Wall Street reform roll out speech on Tuesday in New York.
Gary Gensler, Clinton’s chief financial adviser, accused Sanders of taking a “hand-off approach” to some of the largest banking entities and encouraging him to “endorse” Clinton’s plan on Wall Street reform instead of rolling out his own.
“Any plan to further reform our financial system must include strong provisions to tackle risks in the ‘shadow banking’ sector, which remains a critical source of potential instability in our economy,” Gensler, a former chair of the Commodity Futures Trading Commission, said in a statement to CNN. “Unfortunately, Sen. Sanders has so far taken a hands-off approach to some of the riskiest institutions and activities in our economy, which were among the biggest culprits during the 2008 crisis.”
Michael Briggs, a Sanders’ spokesman, took aim at Gensler in his response.
“Sen. Sanders won’t be taking advice on how to regulate Wall Street from a former Goldman Sachs partner and a former Treasury Department official who helped Wall Street rig the system,” he said on Monday.
Briggs characterization of Gensler is not totally accurate, though. While Gensler did work at Goldman Sachs, a large investment bank, before working for the Obama administration, he was known in the White House for penning some of the toughest regulations into the Dodd-Frank reform bill, including tightening oversight of the trillion dollar derivatives markets.
What’s more, Gensler was was seen as one of Obama’s fiercest Wall Street critics when he was hired by the campaign in early 2015. Many saw the hire as a way for Clinton to protect her left flank against presidential runs like the one Sanders is currently mounting.
Sanders will deliver what his campaign is branding as a “major policy address on Wall Street reform and financial policy” Tuesday in New York. Gensler said Sanders should “go beyond his existing plans for reforming Wall Street and endorse Hillary Clinton’s tough, comprehensive proposals to rein in risky behavior within the shadow banking sector.”
By focusing on Wall Street, the Clinton campaign is challenging Sanders to a debate where the senator and his aides feel his is on solid footing. Sanders mentions taking on Wall Street in every speech he gives and his supporters are energized by his focus on the issue and concerned with Clinton’s ties to the industry.
Sanders is expected to argue Tuesday that the country needs to clamp down on Wall Street abuses and create a more middle class focused financial system by increasing taxes and penalties on the nation’s biggest banks.
Despite Sanders being comfortable talking about Wall Street, Clinton has not shied away from hitting the Vermont senator on the issue, touting herself as someone with a record of taking on the industry.
During a Monday night event at Manchester Community College Sanders previewed his Wall Street reform rollout plan. “What we are proposing is a tax on Wall Street speculation,” Sanders said. “What can you do? Secretary Clinton, in a recent debate, when asked about does she want corporate America to like her and she said yes she does, I myself can live without the love of Wall Street.”
Clinton and Sanders have sparred on reinstating Glass-Steagall, a Depression-era banking law, which would lead to the breakup of the nation’s largest financial institutions.
At a town hall in Keene, New Hampshire, on Sunday, a voter told Clinton he was supporting Sanders because of the senator’s stance on lifting up the middle class and combating Wall Street. Clinton responded to the man by saying she has “just as much passion and just as much frustration” with Wall Street and that her “proposal is a better way of dealing” with the industry.
“I have the greatest respect for Sen. Sanders and he makes a passionate case against the big banks and his solution is recitation of Glass-Steagall, which would, in his view, lead to the breaking up of the big banks,” Clinton said. “That leaves out a huge part of the financial system. I don’t want them to get away with that.”
She added, “You will not find a president that will be tougher on making sure that doesn’t happen and doesn’t bail them out and no bank is too big to fail and no banker is too important not to jail.”
Sanders has said Clinton’s plans for Wall Street were “not good enough” and accused Clinton of being beholden to Wall Street because of their donations to her campaign.
“Here’s the story, I mean let’s not be naive about it,” Sanders said. “Over her political career, why has Wall Street been a major, the major campaign contributor to Hillary Clinton? Now, maybe they’re dumb and they don’t know what they’re gonna get, but I don’t think so.”
Clinton has received sizable donations from Wall Street throughout her career, including when she represented New York in the Senate. Out of the $77.5 million Clinton’s campaign raised in the first six months of her campaign, $2 million — or just less than 3 percent — came from Wall Street.
