The American Prospect is a nonprofit, independent magazine covering public policy and politics. Sludge is re-publishing this article.
Throughout the 2020 election cycle, even going back to the Democratic primaries, Wall Street has been able to hide unnoticed in the policy discussion. Despite that, the financial industry could suffer a major blow to its fortunes if one of the most reliably pro-bank members of Congress loses what has become a close election.
Rep. Ann Wagner (R-MO), a four-term congresswoman and a senior member of the House Financial Services Committee, finds herself in a toss-up contest against Democratic state Sen. Jill Schupp. Missouri’s 2nd Congressional district, made up of the southern and western suburbs of St. Louis, is the kind of seat where Democrats have made up significant ground on in the Trump era. Wagner took only 51.2 percent of the vote here in 2018, after winning 64.1 percent just four years earlier. Schupp, who wins the award for the most creative use of a Salt-N-Pepa song, could break through next week.
That would be bad news for banks, stockbrokers, payday lenders, and essentially anyone in America who manages money. Despite representing a district roughly 874 miles from Wall Street, Wagner may be the financial industry’s biggest champion in Washington. According to a 2019 tally of the record from Americans for Financial Reform, Wagner voted for every single deregulation measure that came up either in the Financial Services Committee or the House floor.
The race has seemingly not turned on Wagner’s fervid support for Wall Street.
“She’s the worst on everything,” says Bartlett Naylor, a financial policy advocate with Public Citizen’s Congress Watch. “Where others are reading the talking points, she’s a full-throated shill on every issue.”
Wagner hasn’t just built a deregulatory voting record in Congress; she’s been a leader in making America safe for financial predators. In 2015, she wrote the legislation that would have stopped the Department of Labor’s “fiduciary rule.” The rule mandated that investment advisors act in the best interest of their clients. Wagner’s “Retail Investor Protection Act” would have eliminated the best interest rule, freeing advisors to recommend financial products based on how it inflates the corporate bottom line rather than how it helps the client saving for retirement. Following Wagner’s lead, President Trump delayed and then killed the fiduciary rule, leading to increases in dodgy sales of predatory financial products.
“What you see here in particular is a consistent record of lining up to do the bidding of an industry that regularly rips off ordinary Americans saving for retirement,” says Carter Dougherty of Americans for Financial Reform about Wagner.
Wagner became the chair of the Financial Services Committee’s oversight subcommittee in 2017 (complete with a bizarre introductory video), and set to work trying to oust the then-director of the Consumer Financial Protection Bureau, Richard Cordray. In a 2017 hearing, Wagner tried to get Cordray to read a binder of documents regarding Wells Fargo’s fake accounts scandal. At the time, House Republicans were trying to paint Cordray and CFPB as late to investigate Wells Fargo, as a pretext to get Trump to fire him for cause. House Democrats did not receive copies of the documents that Wagner was using to badger Cordray.
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Wagner is supported generously by the industries she protects. According to the Center for Responsive Politics, the top industries donating to Wagner, through their employees and corporate PAC donations, all have business before the Financial Services Committee. The securities and investment industry has given $1.28 million to Wagner since 2011, and the insurance industry has chipped in another $1.1 million. Automotive companies—Congress barred the CFPB from jurisdiction over auto dealers, and House Republicans like Wagner have worked hard to keep things that way—have given $756,000, real estate firms have ponied up $623,000, and commercial banks, another $549,000.
Some of these financial industry participants are Wagner’s constituents. St. Louis houses significant operations for investment bank Stifel, financial advisor Jones Financial Companies, and the aforementioned Wells Fargo. The only political candidate receiving more money from Stifel employees in 2020 than Wagner is Donald Trump; Jones Financial Companies is Wagner’s biggest contributor this election cycle. Other major contributors, in terms of individual and PAC donations, include financial companies Charles Schwab, Northwestern Mutual, and Wells Fargo.
“Everyone gets onto the banking committee to raise money,” says Naylor. “She’s been so unembarrassed by it.”
The race has seemingly not turned on Wagner’s fervid support for Wall Street. Debates between Wagner and Schupp have focused more on high-profile issues like health care, policing, and of course the pandemic. But even if Wall Street isn’t a topic in this House race, it’s been a significant source of one candidate’s funding. The whole point of joining the Financial Services Committee is to raise enough of a big money war chest as to make yourself impregnable, immune to any re-election stumble.
That has not happened for Wagner, as ideological sentiment in her district has obviously put her at risk. Schupp actually outraised Wagner in the second quarter of 2020, and has been competitive with Wagner throughout the race, despite the Wall Street money cannon. Outside groups on both sides have spent over $10 million on the contest, with the National Republican Congressional Committee adding another $700,000 for the final week. Polling has been essentially dead even.
If Wagner can build up the kind of war chest she has built by catering to Wall Street’s wishes and still lose, it could signal that the big-money strategy is no longer sufficient to assure victory. “That would be nice if that was the lesson,” says Naylor. “If would be wonderful if members of Congress could wean themselves from banking money.”
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